互太纺织(01382) - 2024 - 中期业绩

Interim Financial Information This section presents the condensed consolidated financial statements, including profit or loss, balance sheet, and detailed notes, for the interim period Condensed Consolidated Statement of Profit or Loss For the six months ended September 30, 2023, the Group reported a 16.9% revenue decline to HKD 2.29 billion and a 49.8% decrease in profit attributable to owners of the Company to HKD 124 million Performance Summary for the Six Months Ended September 30, 2023 | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 2,294,749 | 2,761,191 | -16.9% | | Gross Profit | 213,945 | 329,239 | -35.0% | | Operating Profit | 165,124 | 257,583 | -35.9% | | Profit for the Period | 128,248 | 248,901 | -48.5% | | Profit Attributable to Owners of the Company | 124,463 | 248,179 | -49.8% | | Basic Earnings Per Share (HKD) | 0.09 | 0.18 | -50.0% | Condensed Consolidated Balance Sheet As of September 30, 2023, the Group's total assets slightly decreased by 2.8% to HKD 5.38 billion, with total equity at HKD 3.00 billion and total liabilities at HKD 2.37 billion Balance Sheet Summary (September 30, 2023 vs March 31, 2023) | Metric | September 30, 2023 (HKD thousands) | March 31, 2023 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 2,653,838 | 2,296,109 | +15.6% | | Current Assets | 2,721,353 | 3,233,208 | -15.8% | | Total Assets | 5,375,191 | 5,529,317 | -2.8% | | Current Liabilities | 2,150,187 | 2,190,965 | -1.9% | | Non-current Liabilities | 221,749 | 249,775 | -11.2% | | Total Liabilities | 2,371,936 | 2,440,740 | -2.8% | | Total Equity | 3,003,255 | 3,088,577 | -2.8% | Notes to the Condensed Consolidated Interim Financial Information These notes detail the basis of preparation, accounting policies, segment information, revenue and expense breakdown, EPS calculation, dividend policy, and balance sheet items, highlighting the Group's single operating segment, regional revenue distribution, an HKD 10 million impairment loss, and an interim dividend of HKD 0.07 per share - All of the Group's business operations are related to the manufacturing and trading of textile products, managed and reviewed as a single operating segment[17] - The Board declared an interim dividend of HKD 0.07 per share, a significant decrease from HKD 0.15 per share in the prior period[26][49] - An impairment loss of HKD 10 million was recognized on the investment in associate Teejay Lanka PLC, as its recoverable amount was below carrying value[51][27] Revenue by Geographical Region (For the Six Months Ended September 30) | Region | 2023 (HKD thousands) | 2022 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Southeast Asia | 1,255,195 | 1,508,351 | -16.8% | | China | 607,578 | 659,558 | -7.9% | | Bangladesh | 141,583 | 180,343 | -21.5% | | Sri Lanka | 81,153 | 130,575 | -37.9% | | Hong Kong | 86,440 | 105,935 | -18.4% | | Others | 122,800 | 176,429 | -30.4% | | Total | 2,294,749 | 2,761,191 | -16.9% | Management Discussion and Analysis This section provides an overview of the Group's business and financial performance, liquidity, financial resources, capital structure, and future outlook Business and Financial Review During the review period, the Group faced challenging financial performance with revenue declining by 16.9% due to lower sales volume and average selling prices, and profit attributable to owners of the Company significantly decreasing by 49.8% to HKD 124.5 million - Revenue decreased by 16.9% to HKD 2.295 billion, resulting from a 7.4% decline in sales volume and a 10.3% decrease in average selling price[32] - Profit attributable to owners of the Company decreased by 49.8% to HKD 124.5 million; excluding the HKD 10 million impairment loss, profit still declined by 45.8%[33][34] Key Financial Ratios (For the Six Months Ended September 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Gross Profit Margin | 9.3% | 11.9% | | Return on Equity | 4.3% | 7.8% | | Interest Coverage Ratio | 5.5 times | 19.5 times | Liquidity, Financial Resources and Capital Structure The Group maintained prudent financial management, with net debt increasing to HKD 466 million due to higher capital expenditure of HKD 625 million for new factory construction, while the debt-to-equity ratio remained at 79.0% - Total capital expenditure significantly increased by 667.4% year-over-year to HKD 625 million, primarily for the construction of the second factory in Vietnam[87] - Net debt increased from HKD 99.4 million to HKD 465.5 million, mainly due to advance payments for the new factory construction in Vietnam[86] Key Liquidity Ratios | Metric | September 30, 2023 | March 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 1.3 | 1.5 | | Quick Ratio | 0.8 | 1.0 | | Gearing Ratio | 42.8% | 47.0% | | Debt-to-equity Ratio | 79.0% | 79.0% | Prospects and Outlook Management anticipates an uncertain short-term economic outlook but remains optimistic about medium-term growth, implementing strategies like sales team enhancement and production optimization, with the new Vietnam plant expected to boost capacity and profitability upon full operation in Q2 2024 - Construction of the new Vietnam plant is progressing well, with trial production scheduled for January 2024 and full operation by Q2 2024, reaching a maximum annual production capacity of 34 million pounds in its first phase[98] - Despite short-term economic uncertainties influenced by geopolitics, interest rates, and slowing growth in key markets, management remains optimistic about the Group's medium-term growth and expects profitability to rebound in the 2024/25 fiscal year[124] - To enhance competitiveness, the Group is implementing several measures, including strengthening the sales team, developing new product lines to expand into the China market, and optimizing production processes and cost management[122][97] Corporate Governance and Other Information This section covers the Group's dividend policy, share repurchase activities, and adherence to corporate governance principles Dividends and Share Repurchase The Board declared an interim dividend of HKD 0.07 per share payable on December 20, 2023, and the company repurchased 5,513,000 shares for approximately HKD 10.45 million to enhance net asset value and earnings per share - An interim dividend of HKD 0.07 per share was declared for the six months ended September 30, 2023[99] Share Repurchase Details (For the Six Months Ended September 30, 2023) | Month of Repurchase | Number of Shares Repurchased | Highest Price Per Share (HKD) | Lowest Price Per Share (HKD) | Total Consideration (HKD) | | :--- | :--- | :--- | :--- | :--- | | June 2023 | 800,000 | 1.94 | 1.85 | 1,505,500 | | July 2023 | 4,713,000 | 1.97 | 1.78 | 8,942,700 | Corporate Governance The company largely complied with the Corporate Governance Code, with the only deviation being the combined roles of Chairman and CEO, a structure the Board believes maintains adequate checks and balances, and the Audit Committee has reviewed the interim results - The company complied with the Corporate Governance Code under the Listing Rules, with a deviation where the roles of Chairman and Chief Executive Officer are combined[128][101] - The company has established an Audit Committee, comprising four independent non-executive directors, responsible for overseeing financial reporting and internal control systems, and has reviewed these interim results[104][130]