CDT Environmental Technology Investment Holdings Limited (Nasdaq: CDTG) reported a significant decline in financial performance for fiscal year 2025, with total revenues decreasing by 38.8% to approximately $18.2 million compared to $29.7 million in 2024. The company, a leading provider of waste treatment systems and services in China, filed its annual report on Form 20-F with the U.S. Securities and Exchange Commission on May 15, 2026, which can be accessed through the SEC's website at www.sec.gov or CDT's website at https://www.cdthb.cn.
The revenue decline was primarily driven by a $11.1 million decrease in sewage treatment system installations, which fell to $17.3 million from $28.4 million. CDT attributed this to prolonged local government review and approval processes that delayed projects initiated between 2021 and 2024, as well as a reduction in new projects secured in 2025. Revenues from sewage treatment services also dropped by 29.8% to $0.9 million, reflecting reduced demand amid the ongoing economic downturn in the People's Republic of China.
Gross profit decreased by 32.8% to $7.6 million, though gross profit margin improved to 41.5% from 37.8% due to a higher proportion of profitable projects completed. Operating expenses surged 107.7% to $19.2 million, driven by a $1.7 million increase in stock-based compensation and a $14.7 million provision for credit losses, net of recoveries, compared to a net recovery of $6.5 million in 2024. The provision was made in response to increased credit risk and collectability concerns, particularly as customers are primarily state-owned companies backed by local governments. The company's net loss amounted to $10.3 million, a stark contrast to net income of $1.4 million in 2024.
Despite the challenging year, CDT highlighted a $26.8 million project backlog as of March 31, 2026, comprising three key projects: Phase VI of the Jimei Guankou Project (RMB 30 million), the Xiamen Xinglin Pipeline Network Renovation Project (RMB 87 million), and the Hubei Wuxue Project (RMB 70 million). The company is also bidding on two new wastewater treatment system projects, with results expected by the third quarter of 2026. However, there is no guarantee of being awarded these contracts.
In a strategic move to diversify revenue streams, CDT is exploring new energy opportunities by converting organic solid waste into renewable energy, aligning with China's 'Dual Carbon' goals. CEO Li Yunwu stated, 'Decarbonization aligns with CDT's new energy development strategy designed to diversify our revenue streams while we continue to drive organic growth opportunities in our core business.' The company is in the planning stages, and uncertainties remain regarding the successful launch of this initiative.
CDT's working capital stood at $26.4 million as of December 31, 2025, providing some liquidity buffer, though the company's operations heavily depend on timely payments from major customers. The annual report underscores the impact of macroeconomic headwinds and project delays on CDT's financial health, while the backlog and new energy ventures offer potential avenues for recovery.
