百勤油服(02178) - 2024 - 中期业绩

Performance Summary Overall Performance Overview In H1 2024, the Group's performance significantly improved, with total revenue surging by 60.8% year-on-year to HKD 166 million, and loss attributable to owners of the Company narrowing by 97.7% to approximately HKD 0.4 million, nearing breakeven Performance Metrics | Metric | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 165.9 million HKD | 103.2 million HKD | +60.8% | | Net Loss | 0.4 million HKD | 18.0 million HKD | -97.8% | | Loss Attributable to Owners of the Company | 0.4 million HKD | 17.1 million HKD | -97.7% | | Basic Loss Per Share | 0.02 HK cents | 1.0 HK cents | -98.0% | | Interim Dividend | None | None | - | - Performance improvement primarily attributed to two factors: (1) increased revenue from production enhancement services in the Chinese market; and (2) increased net reversal of impairment losses on financial assets[2] Business Review and Outlook Geographical Market Analysis The Group's growth was entirely driven by the Chinese market, where revenue increased by 80.4% year-on-year, while overseas market revenue declined by 15.1% due to the expiration of a Middle East contract Geographical Market Revenue | Geographical Market | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | % of Total Revenue (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | China Market | 147.9 | 82.0 | +80.4% | 89.2% | | Overseas Market | 18.0 | 21.2 | -15.1% | 10.8% | | Total | 165.9 | 103.2 | +60.8% | 100% | China Market Strong growth in the Chinese market was primarily contributed by the Southwest region, where revenue surged by 193.0% year-on-year to HKD 114 million, mainly due to increased production enhancement services China Regional Revenue | China Region | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Southwest | 113.7 | 38.8 | +193.0% | | North | 21.9 | 37.8 | -42.1% | | Northwest | 9.4 | 4.4 | +113.6% | | Other Regions | 2.9 | 1.0 | +190.0% | - Growth in the Southwest region was mainly due to increased production enhancement services; the decline in the Northern region was due to reduced production enhancement and drilling services[5][6] Overseas Market The decline in overseas market revenue was primarily affected by the Middle East region, where a supervision service contract expired in Q1 2024, leading to a 32.7% year-on-year decrease in revenue - Middle East market revenue decreased from HKD 21.1 million to HKD 14.2 million, a 32.7% year-on-year reduction, mainly due to the expiration of a supervision service contract[7] - Other overseas regions' revenue increased from HKD 0.1 million to HKD 3.8 million, a 3700.0% year-on-year growth, mainly due to increased supervision and drilling services[8] Business Segment Analysis From a business segment perspective, 'Oilfield Project Tools and Services' is the Group's core and growth engine, with revenue increasing by 81.9% year-on-year, accounting for 89% of total revenue Business Segment Revenue | Business Segment | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | % of Total Revenue (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | Oilfield Project Tools and Services | 147.7 | 81.2 | +81.9% | 89.0% | | Consulting Services | 18.2 | 22.0 | -17.3% | 11.0% | | Total | 165.9 | 103.2 | +60.8% | 100% | Oilfield Project Tools and Services Within the 'Oilfield Project Tools and Services' segment, production enhancement services were the absolute dominant force, contributing HKD 137 million in revenue, a 90.3% year-on-year increase, accounting for 92.5% of the segment's revenue Service Type Revenue | Service Type | H1 2024 Revenue (million HKD) | H1 2023 Revenue (million HKD) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Production Enhancement | 136.6 | 71.8 | +90.3% | | Drilling | 8.1 | 7.4 | +9.5% | | Completion | 3.0 | 2.0 | +50.0% | - Growth in production enhancement services primarily came from the Southwest region of China, partially offset by reductions in Northern China[12] Consulting Services Consulting services revenue decreased by 17.3% year-on-year to HKD 18.2 million, primarily due to the expiration of a supervision service contract in the Middle East market in Q1 2024 - The decrease in consulting services revenue was mainly due to the expiration of a supervision service contract in the Middle East market, partially offset by increased integrated project management services in the Middle East and supervision services in other overseas markets[10] Client Analysis The Group's client concentration is very high, with the top three clients contributing 96.1% of revenue, and the largest client (Client 1) showing particularly strong growth - The top five clients accounted for 98.7% of total revenue[15] Top Clients Revenue | Client | H1 2024 Revenue (million HKD) | % of Total Revenue (%) | | :--- | :--- | :--- | | Client 1 | 115.0 | 69.3% | | Client 2 | 30.3 | 18.3% | | Client 3 | 14.1 | 8.5% | Human Resources and R&D To adapt to industry trends, the Group streamlined its organizational structure, reducing total employees by 23.0%, while continuing to invest in R&D to maintain technological leadership - As of June 30, 2024, the Group had 197 employees, a 23.0% decrease from the end of 2023[16] - The Group emphasizes intellectual property protection, holding 28 utility model patents and 10 invention patents, with another 5 invention patents pending[17] Future Outlook Management maintains a cautiously optimistic outlook for the Group, expecting strong demand for oilfield services in H2 2024, and plans to expand existing businesses while exploring diversified investment opportunities - Market demand for oilfield services is expected to remain strong in H2 2024, primarily benefiting from stable international oil prices and China's shale gas consumption policies[18] - The Group plans to expand existing businesses and seek diversified development, including exploring profitable investment opportunities such as surface geothermal projects[18] Financial Review Consolidated Statement of Profit or Loss Analysis In H1 2024, the Group achieved an operating profit of HKD 7.6 million, reversing a prior-period loss, primarily due to significant revenue growth and increased net reversal of impairment losses on financial assets - Material costs as a percentage of revenue increased from 12.6% to 14.3%, and technical service fees as a percentage of revenue increased from 31.6% to 42.5%, both due to the higher proportion of revenue from high-cost production enhancement services[52][55] - Net reversal of impairment losses on financial assets was approximately HKD 3.7 million, compared to only HKD 0.2 million in the prior period, mainly due to overall improvement in financial asset quality[56] - Final net loss significantly narrowed to HKD 0.4 million, compared to HKD 18.0 million in the prior period[61] Statement of Financial Position Analysis As of June 30, 2024, the Group's total assets were approximately HKD 694 million, with trade receivables turnover days significantly shortening, while contract assets increased due to higher unbilled work - Net trade receivables decreased by 17.6% to HKD 169 million, with average turnover days decreasing from 365 days to 206 days[66] - Contract assets increased by 31.5% to HKD 158 million, mainly due to increased unbilled work for production enhancement services[67] - Trade payables turnover days decreased from 889 days to 426 days, due to increased material and technical service fees and faster payments[69] Liquidity and Capital Resources The Group's liquidity remains tight, with cash and cash equivalents of approximately HKD 29.8 million against total borrowings of HKD 179 million, though the gearing ratio has improved to 42.2% Liquidity Metrics | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 29.8 million HKD | 26.3 million HKD | | Bank and Other Borrowings | 179.2 million HKD | 187.1 million HKD | | Gearing Ratio | 42.2% | 45.3% | Financial Statements and Notes Interim Condensed Consolidated Statement of Comprehensive Income The financial report shows the Group achieved revenue of HKD 166 million in H1 2024, a 60.8% year-on-year increase, with operating activities turning profitable and total loss for the period significantly narrowing Interim Condensed Consolidated Statement of Comprehensive Income | Item (HKD '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 165,908 | 103,215 | | Operating Profit / (Loss) | 7,636 | (10,747) | | Profit / (Loss) Before Income Tax | 594 | (18,444) | | Loss for the Period | (412) | (17,973) | | Loss Attributable to Owners of the Company | (395) | (17,113) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HKD 694 million, total liabilities HKD 501 million, and net assets HKD 193 million, with a current ratio of approximately 1.03 indicating tight liquidity Interim Condensed Consolidated Statement of Financial Position | Item (HKD '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Assets | 694,056 | 712,011 | | Non-current Assets | 244,989 | 256,384 | | Current Assets | 449,067 | 455,627 | | Total Liabilities | 500,948 | 520,856 | | Current Liabilities | 434,524 | 433,123 | | Non-current Liabilities | 66,424 | 87,733 | | Net Assets | 193,108 | 191,155 | Notes to the Financial Statements The notes disclose key accounting information, including significant uncertainties regarding going concern, detailed segment information, and a significant post-balance sheet litigation matter Basis of Preparation and Going Concern Although the financial statements are prepared on a going concern basis, the notes explicitly state significant uncertainties due to liquidity risk, with management's plan relying on securing new loans and collecting receivables - As of June 30, 2024, the Group's total current bank and other borrowings were approximately HKD 115 million, while cash and cash equivalents were only approximately HKD 29.79 million[26] - Management's response plan includes: (a) securing a RMB 19.75 million loan in July 2024; (b) having an unutilized shareholder loan facility of RMB 30 million; and (c) associate Star Petrotech repaying approximately HKD 6.5 million in loans[27] - The notes explicitly state that the above circumstances indicate a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[27] Events After the Reporting Period Subsequent to the reporting period, a Group subsidiary was involved in a technical service fee lawsuit, with a first-instance judgment ordering payment of approximately RMB 12.6 million, and the plaintiff has appealed - A subsidiary was sued by a service provider for approximately RMB 28.9 million in technical service fees[50] - The first-instance judgment ordered the defendant to pay approximately RMB 12.6 million, but the plaintiff has appealed[50] - As of the announcement date, approximately RMB 14.9 million (approximately HKD 16.3 million) across three bank accounts of the defendant has been frozen by the court[50] Corporate Governance and Other Matters Dividends and Audit The Board resolved not to declare an interim dividend for H1 2024, and the unaudited interim condensed consolidated financial information has been reviewed by the Company's Audit Committee - The Board resolved not to declare an interim dividend for H1 2024 (H1 2023: None)[78] - The unaudited interim financial information for the period has been reviewed by the Audit Committee, comprising three independent non-executive directors[78]