Revenue and Profitability - Revenue from continuing operations for the six months ended June 30, 2021, was HK$458,192,000, an increase from HK$455,709,000 in the same period of 2020[18] - Gross profit for the period was HK$225,427,000, compared to HK$243,265,000 in the prior year, reflecting a decrease of approximately 7.3%[18] - Loss for the period from continuing operations was HK$73,164,000, a significant decline from a profit of HK$4,297,000 in the same period last year[18] - Total comprehensive expense for the period amounted to HK$60,817,000, compared to HK$39,111,000 in the previous year, indicating an increase in losses[18] - The company reported a loss attributable to owners of the Company from continuing operations of HK$75,503,000 for the six months ended June 30, 2021, compared to a loss of HK$49,006,000 for the same period in 2020, representing an increase in loss of approximately 54%[20] - Total comprehensive loss for the period was HK$73,164,000, compared to a loss of HK$12,461,000 in the previous year, indicating a significant increase in comprehensive loss[20] - Basic and diluted loss per share from continuing operations was HK$1.35 for the six months ended June 30, 2021, compared to HK$0.88 for the same period in 2020, reflecting a deterioration in earnings per share[20] Expenses and Costs - Finance costs increased to HK$17,027,000 from HK$16,523,000, reflecting a rise of approximately 3.1%[18] - Distribution and selling expenses totaled HK$172,116,000, up from HK$156,005,000 in the previous year, representing an increase of approximately 10.3%[18] - Administrative expenses rose to HK$70,995,000 from HK$65,030,000, reflecting an increase of about 9.1%[18] - The company recognized impairment losses under the expected credit loss model amounting to HK$33,543,000 during the period[18] Assets and Liabilities - Non-current assets amounted to HK$1,707,809,000 as of June 30, 2021, a decrease from HK$1,759,484,000 at December 31, 2020[21] - Current assets increased to HK$746,340,000 as of June 30, 2021, compared to HK$782,800,000 at December 31, 2020, indicating a decline in liquidity[21] - Total equity attributable to owners of the Company was HK$1,125,828,000 as of June 30, 2021, down from HK$1,214,186,000 at December 31, 2020, showing a decrease of approximately 7.3%[23] - The company reported trade receivables of HK$155,532,000 as of June 30, 2021, down from HK$177,124,000 at December 31, 2020, indicating a reduction in receivables[21] - Inventories increased to HK$101,572,000 as of June 30, 2021, compared to HK$89,960,000 at December 31, 2020, reflecting a rise in stock levels[21] - The company had bank borrowings due within one year amounting to HK$214,964,000 as of June 30, 2021, compared to HK$167,627,000 at December 31, 2020, indicating an increase in short-term debt[23] Cash Flow and Financing Activities - The net cash generated from operating activities before movements in working capital was HK$56,724,000 for the six months ended June 30, 2021, compared to HK$24,534,000 for the same period in 2020, indicating a significant increase of 131.1%[30] - For the six months ended June 30, 2021, the net cash used in financing activities was HK$160,858,000, compared to HK$189,621,000 in the same period of 2020, representing a decrease of approximately 15.2%[32] - The cash and cash equivalents at the end of the period were HK$107,679,000, a decrease from HK$225,261,000 at the end of the same period in 2020, indicating a decline of approximately 52.2%[32] - The net (decrease) increase in cash and cash equivalents for the period was a decrease of HK$65,067,000, compared to an increase of HK$75,966,000 in the same period of 2020[32] Impact of COVID-19 - The Group's fitness centers in Singapore and Taiwan were suspended from operations due to COVID-19 measures, impacting financial performance significantly[39] - The Group negotiated rent forgiveness related to COVID-19 for its fitness centers, which contributed to mitigating some financial losses during the period[39] - The pharmaceutical business operations have gradually recovered to normal levels as the COVID-19 pandemic in Mainland China has been effectively controlled[38] - The Group's fitness business segment recorded significant losses due to the suspension of operations, with uncertainties regarding the long-term demand for fitness services[39] Government Grants and Support - The Group received approximately HK$12,927,000 from the Job Support Scheme in Singapore, which is included in profit or loss as "other income" during the reporting period[39] - The government grant related to employment for the six months ended June 30, 2021, amounted to approximately HK$12,927,000, an increase of 48.5% compared to HK$8,705,000 in 2020[77] Segment Performance - For the six months ended June 30, 2021, the pharmaceutical business generated revenue of HK$379,837,000, while the fitness business generated HK$29,818,000 from personal training classes and HK$26,465,000 from membership packages[53] - The total revenue for the six months ended June 30, 2021, was HK$436,120,000, compared to HK$430,250,000 for the same period in 2020, reflecting a slight increase[52] - The Group's fitness business segment required significant judgments and estimates to be made in calculating the recoverable amount due to indicators of impairment as at the period end[45] Discontinued Operations - The company has disposed of its interests in the cement business segment, which was presented as "discontinued operation" as of December 21, 2020[59] - The discontinued operation generated revenue of HK$255,465,000 and expenses of HK$243,562,000, resulting in a profit before taxation of HK$11,903,000[100] - The loss for the period from the discontinued operation amounted to HK$16,758,000[100] Impairment and Goodwill - The impairment assessment identified the suspension of the fitness business as an impairment indicator, leading to a review of goodwill related to Unit B[121] - An impairment loss on goodwill of approximately HK$46,358,000 has been recognized, representing 51% of the total impairment loss of HK$90,899,000[124] Financial Reporting and Compliance - The Group's accounting policies and methods of computation for the interim financial statements are consistent with those presented in the annual financial statements for the year ended December 31, 2020[45] - The application of amendments to HKFRSs in the current period had no material impact on the disclosures set out in the interim condensed consolidated financial statements[45] - The Group's financial results have been restated to reflect the discontinued operation in accordance with HKFRS 5[101]
华控康泰(01312) - 2021 - 中期财报