Financial Performance - Profit attributable to owners of the Company for the six months ended 30 June 2022 was HK$108,322,000, representing a 64% decrease year-on-year [6]. - Revenue for the same period was HK$7,716,739,000, reflecting a 9% decline compared to the previous year [6]. - Earnings per share decreased to HK 19.1 cents, down 65% from the prior year [6]. - The Group's sales volume for the first half of 2022 was 718,000 metric tons, a decrease of 6% year-on-year [9]. - The Group recorded a notable non-recurring fair value increase of over HK$88 million in the previous year, which was not repeated in the current period [9]. - Profit attributable to owners of the Company amounted to HK$108 million, a decrease of 64% compared to the same period last year, primarily due to non-recurring fair value increases recorded in the previous year [22]. - The overall sales volume and revenue of the Group decreased by 6% and 9% respectively compared to the same period last year [22]. - The coatings business reported sales revenue of HK$880 million, a year-on-year decline of 10% due to pandemic impacts and unstable supply from the Shanghai plant [24]. - The inks business achieved sales revenue of approximately HK$680 million, representing a slight decrease of 1% year-on-year, with operating profit improving to approximately HK$17.8 million [25]. - The lubricants business reported sales of HK$170 million, with an operating loss of HK$2.9 million due to decreased demand and rising raw material costs [28]. Dividends and Share Capital - The interim dividend declared was HK 10 cents per share [6]. - The Group declared an interim dividend of HK10 cents per share, a slight decline of HK2 cents compared to the previous year's interim dividend [1]. - An interim dividend of HK10 cents per share was declared for the six months ended June 30, 2022, compared to HK12 cents per share for the same period in 2021 [96]. - The interim dividend declared for the six months ended June 30, 2022, was lower than the interim dividend of HK12 cents per share and a special dividend of HK10 cents per share declared for the same period in 2021 [186]. - As of June 30, 2022, Mr. Ip Chi Shing holds 161,304,532 shares personally, representing approximately 34.65% of the issued share capital of the Company [57]. - The total number of shares held by directors and chief executives amounts to 197,000,532, which is approximately 34.65% of the issued share capital [57]. - The issued share capital of the Company as of June 30, 2022, is 568,484,096 shares [64]. Financial Position and Gearing - The gearing ratio as of 30 June 2022 was 46.6%, an improvement from 51.7% as of the end of the previous year [9]. - The gearing ratio slightly decreased to 46.6%, down from 51.7% in June 2021, indicating improved financial stability [19]. - The Group's gearing ratio decreased to 46.6%, down 5.1 percentage points from the previous year, indicating improved financial stability [45]. - The Group recorded a net cash outflow of HK$31.3 million during the period, a significant improvement compared to a net cash outflow of HK$394.2 million in the same period last year [45]. - As of June 30, 2022, the Group's gross bank borrowings amounted to HK$2,351,734,000, an increase from HK$2,149,875,000 as of December 31, 2021 [47]. - The net bank borrowings after deducting short-term deposits and cash were HK$1,664,870,000, compared to HK$1,391,558,000 at the end of 2021 [47]. - The Group's short-term loans repayable within one year totaled HK$1,725,734,000, up from HK$1,247,042,000 in the previous year [47]. Challenges and Market Conditions - The Group faced significant challenges due to geopolitical conflicts and COVID-19 outbreaks, impacting overall performance [9]. - Cost reduction efforts were made by management, but could not fully offset the decline in sales revenue [9]. - The Group is cautiously optimistic about the domestic economic recovery as pandemic controls ease, but remains wary of international uncertainties, including inflation and geopolitical tensions [15]. - The management team remains cautiously optimistic about the business outlook for the second half of 2022, despite challenges in demand and raw material prices [24]. Strategic Initiatives and Future Plans - The Group continues to focus on "reducing costs and expenses" to enhance competitiveness and maximize shareholder value [15]. - The Group plans to sell a 51% effective interest in its solvents business to PAG to enhance value creation and financial resources for future development [1]. - The new solvents plant in Zhuhai has completed payment, and the Group expects its financial position to improve in the second half of 2022 [22]. - The Group plans to build a new acetic acid plant in Jingmen, Hubei Province, with an annual production capacity of 600,000 metric tons [24]. - The logistics costs are anticipated to drop in the second half of the year, which is expected to help increase profits [24]. Governance and Compliance - The Company has complied with the Corporate Governance Code as set out in Appendix 14 to the Listing Rules for the six months ended 30 June 2022 [100]. - The Audit Committee reviewed the unaudited interim financial statements for the six months ended 30 June 2022, prepared in accordance with Hong Kong Accounting Standard 34 [101]. - The Company has adopted the Model Code for Securities Transactions by Directors, confirming all Directors complied with the required standards during the reporting period [103]. - The Group is committed to sustainable development, aiming to become a respected century-old corporation, focusing on five key aspects: environment, communities, employees, supply chains, and customers [106]. - The Company has issued its Environmental, Social and Governance (ESG) Report annually since 2016, with the 2021 report available on its official website [107]. Segment Performance - Segment revenue breakdown includes: Solvents at HK$6,014,496,000, Coatings at HK$880,960,000, Inks at HK$675,687,000, Lubricants at HK$172,665,000, and Properties at HK$5,374,000 [150]. - Segment results showed a profit of HK$295,808,000 for Solvents, a loss of HK$26,549,000 for Coatings, a profit of HK$17,771,000 for Inks, a loss of HK$2,897,000 for Lubricants, and a profit of HK$2,186,000 for Properties, totaling HK$286,319,000 [150]. - The Group's segment results showed a total of HK$512,758, reflecting a decrease from the previous year's results [159]. Cash Flow and Investments - For the six months ended June 30, 2022, the net cash used in operating activities was HK$31,337, compared to HK$394,198 for the same period in 2021, indicating a significant improvement [137]. - The net cash used in investing activities was HK$122,336, a decrease from HK$327,295 in the prior year, showing a reduction in cash outflow for investments [137]. - The company raised borrowings of HK$1,130,245 during the period, compared to HK$1,346,522 in the same period last year, indicating a decrease in new debt issuance [137]. - The cash received from the disposal of property, plant, and equipment was HK$15,412, significantly higher than HK$1,035 in the previous year, showing effective asset management [137]. Taxation and Regulatory Matters - Current tax for the PRC amounted to HK$75,002,000, with a total current tax expense of HK$84,291,000 for the period [182]. - The Group's subsidiaries in the PRC are entitled to a reduced income tax rate of 15% due to their qualification as High and New Technology Enterprises [184]. - The withholding tax on interest income from loans to PRC subsidiaries is recognized at a rate of 7% [184].
叶氏化工集团(00408) - 2022 - 中期财报