新矿资源(01231) - 2024 - 中期业绩

Condensed Consolidated Interim Results This section presents the company's financial performance and position for the interim period, highlighting significant declines in revenue and profit Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The company experienced significant declines in revenue and profit, with revenue decreasing by 19% and profit for the period by 50.7% Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Revenue | 174,757 | 215,471 | -19.0% | | Cost of sales | (169,777) | (209,145) | -18.9% | | Gross profit | 4,980 | 6,326 | -21.3% | | Profit before tax | 1,736 | 3,193 | -45.6% | | Profit for the period | 1,407 | 2,856 | -50.7% | | Basic earnings per share | 0.04 (US Cents) | 0.07 (US Cents) | -42.9% | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets and liabilities decreased, while net current assets and total equity increased, indicating a stable financial structure Key Data from Condensed Consolidated Statement of Financial Position | Metric | As of June 30, 2024 (USD Thousand) | As of December 31, 2023 (USD Thousand) | Change (%) | | :------------------------ | :------------------------------- | :------------------------------------- | :--------- | | Total non-current assets | 8,250 | 9,886 | -16.6% | | Total current assets | 65,826 | 99,287 | -33.7% | | Total current liabilities | 42,334 | 78,834 | -46.3% | | Net current assets | 23,492 | 20,453 | +14.9% | | Total equity | 31,742 | 30,339 | +4.6% | Notes to Financial Statements This section details the accounting policies, revenue breakdown, profit components, and specific financial statement items Basis of Preparation Interim financial information is prepared in accordance with IAS 34 and Appendix D2 of the Listing Rules, to be read with the 2023 annual consolidated financial statements - Interim financial information is prepared in accordance with International Accounting Standard 34 and the disclosure requirements of Appendix D2 to the Listing Rules[5] - It should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2023[5] Changes in Accounting Policies Several revised IFRS standards were adopted during the period, but these changes had no significant impact on the Group's financial performance or position - Revisions to IFRS 16 (Lease Liability in a Sale and Leaseback), IAS 1 (Classification of Liabilities as Current or Non-current, Non-current Liabilities with Covenants), and IAS 7 and IFRS (Supplier Finance Arrangements) were adopted[6][7] - These revisions had no significant impact on the Group's financial performance and position during the reporting period[7] Revenue and Segment Information The Group's primary business is resource trading, with customer contract revenue decreasing by 18.8% due to iron ore price adjustments and futures contracts, all from Mainland China - The Group's principal business is the resources business, involving the procurement and supply of iron ore and other commodities, which is the sole reportable operating segment[8] - All revenue from contracts with customers was derived from Mainland China[8] Revenue Analysis | Revenue Source | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :---------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Revenue from contracts with customers | 176,824 | 217,698 | -18.8% | | Price adjustments during quotation period | (9,004) | 2,721 | -430.9% | | Net amount from futures/swap contracts | 6,937 | (4,948) | +240.2% | | Total | 174,757 | 215,471 | -19.0% | Customer Contract Revenue Breakdown | Type of Goods/Services | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Sales of iron ore | 157,966 | 201,457 | -21.5% | | Transportation services | 18,858 | 16,241 | +16.1% | | Total | 176,824 | 217,698 | -18.8% | Profit Before Tax Profit before tax decreased due to a significant increase in cost of inventories sold and net losses from iron ore futures/swap contracts Items Deducted From/(Credited To) Profit Before Tax | Item | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :---------------------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Cost of inventories sold | 137,895 | 198,925 | -30.6% | | Freight charges | 18,587 | 16,241 | +14.4% | | Net loss/(gain) from iron ore futures/swap contracts | 11,792 | (7,646) | +254.2% | Income Tax Expense Hong Kong profits tax rate remains 16.5%, with a two-tiered rate for eligible subsidiaries, and income tax expense slightly decreased - Hong Kong profits tax rate is 16.5%, with a two-tiered tax rate (8.25% for the first HKD 2 million) applicable to certain subsidiaries[10] Income Tax Expense | Metric | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Current - Hong Kong profits tax | 329 | 337 | -2.4% | Dividends The Board does not recommend an interim dividend for the reporting period, consistent with the prior corresponding period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (prior corresponding period: nil)[11] Earnings Per Share Attributable to Ordinary Equity Holders of the Company Basic earnings per share decreased to 0.04 US cents from 0.07 US cents, with diluted EPS being the same due to no potential dilutive ordinary shares Basic Earnings Per Share Calculation | Metric | 6 Months Ended June 30, 2024 | 6 Months Ended June 30, 2023 | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | | Profit (USD Thousand) | 1,421 | 2,844 | -50.1% | | Weighted average number of shares (Thousand shares) | 4,000,000 | 4,000,000 | 0.0% | | Basic earnings per share (US Cents) | 0.04 | 0.07 | -42.9% | - Diluted earnings per share is the same as basic earnings per share as there are no potential dilutive ordinary shares in issue[12] Trade and Bills Receivables As of June 30, 2024, total trade and bills receivables significantly decreased by 49.3% due to reduced iron ore shipments, with all receivables aged within 3 months Trade and Bills Receivables | Metric | As of June 30, 2024 (USD Thousand) | As of December 31, 2023 (USD Thousand) | Change (%) | | :------------------ | :------------------------------- | :------------------------------------- | :--------- | | Trade receivables | 11,747 | 27,525 | -57.3% | | Bills receivables | 19,502 | 34,086 | -42.8% | | Total | 31,249 | 61,611 | -49.3% | - The Group transferred certain bills receivables (USD 10,733 thousand) to banks on a recourse basis in exchange for cash, which are included in interest-bearing bank and other borrowings[13] - As at the end of the reporting period, all trade and bills receivables were aged within 3 months[14] Trade and Bills Payables As of June 30, 2024, total trade and bills payables significantly decreased by 67.8% due to reduced iron ore shipments, with most payables measured at fair value Trade and Bills Payables | Metric | As of June 30, 2024 (USD Thousand) | As of December 31, 2023 (USD Thousand) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------------- | :--------- | | Trade and bills payables | 19,017 | 59,107 | -67.8% | | Of which: measured at amortised cost | 38 | 660 | -94.2% | | Of which: measured at fair value | 18,979 | 58,447 | -67.5% | - As at the end of the reporting period, all trade and bills payables were aged within 3 months[15] - The Group's trade and bills payables include provisionally priced payables related to iron ore purchases, measured at fair value[16] Chairman's Statement The Chairman's Statement highlights decreased revenue, gross profit, and profit for the period due to weak demand for high-grade iron ore in Mainland China, with challenges expected in H2 2024 - Revenue for the reporting period was approximately USD 174.8 million (a year-on-year decrease of approximately 19%), gross profit was approximately USD 5.0 million (a year-on-year decrease of approximately 21.3%), and profit for the period was approximately USD 1.4 million (a year-on-year decrease of approximately 50.7%), primarily due to weak demand for high-grade iron ore from steel mills in Mainland China[17] - Looking ahead to the second half of 2024, the Group will continue to closely monitor business and market developments, take measures to accelerate iron ore sales, and prudently explore merger and acquisition and other cooperation or investment opportunities[17] Management Discussion and Analysis This section provides a comprehensive review of the Group's financial performance, operational highlights, and financial position, including liquidity and risk management Financial Summary The financial summary outlines key financial metrics for the period, showing year-on-year declines in revenue, gross profit, and profit for the period, but improved current and net gearing ratios Key Data from Statement of Profit or Loss | Metric | 6 Months Ended June 30, 2024 (USD Thousand) | 6 Months Ended June 30, 2023 (USD Thousand) | Change (%) | | :-------------------------- | :---------------------------------------- | :---------------------------------------- | :--------- | | Revenue | 174,757 | 215,471 | -19.0% | | Gross profit | 4,980 | 6,326 | -21.3% | | Profit for the period | 1,407 | 2,856 | -50.7% | | Basic earnings per share (US Cents) | 0.04 | 0.07 | -42.9% | Key Data from Statement of Financial Position | Metric | As of June 30, 2024 (USD Thousand) | As of December 31, 2023 (USD Thousand) | Change (%) | | :---------------- | :------------------------------- | :------------------------------------- | :--------- | | Total assets | 74,076 | 109,173 | -32.1% | | Total equity | 31,742 | 30,339 | +4.6% | | Net debt | 620 | 2,890 | -78.5% | Financial Ratios | Metric | As of June 30, 2024 | As of December 31, 2023 | Change (percentage points) | | :----------------- | :------------------ | :---------------------- | :------------------------- | | Current ratio | 1.6 | 1.3 | +0.3 | | Net gearing ratio | 2% | 10% | -8% | Business and Financial Review The Group's resource business, operating on a distribution model, saw decreased iron ore sales and revenue due to weak steel demand in Mainland China, while transportation services revenue grew and hedging turned profitable - The Group continues to operate its resources business under a distribution model for the procurement and supply of iron ore and other commodities, with the business development team responsible for commodity supply, customer development, and hedging strategies[19] - Affected by macroeconomic challenges in Mainland China and a slowdown in real estate development, demand for steel and iron ore decreased, with crude steel production falling by approximately 1.1% year-on-year[19] - During the reporting period, the Group procured and sold approximately 1.5 million tonnes of iron ore (a year-on-year decrease of approximately 17%), generating revenue of approximately USD 174.8 million (a year-on-year decrease of approximately 19%), gross profit of approximately USD 5.0 million, and profit of approximately USD 1.4 million[19] - Transportation services revenue was approximately USD 18.9 million (a year-on-year increase of approximately 16%), accounting for approximately 11% of total revenue, reflecting higher sea freight rates[20] - The Group recorded a net gain of approximately USD 6.9 million from hedging activities (prior corresponding period: net loss of approximately USD 4.9 million), but a net hedging loss of approximately USD 11.8 million was included in cost of sales[19] - As of June 30, 2024, total assets were approximately USD 74.1 million (a decrease of approximately 32.1%), and total liabilities were approximately USD 42.3 million (a decrease of approximately 46.3%), primarily due to reduced trade and bills receivables resulting from lower iron ore shipments[20] Interim Dividend The Board does not recommend an interim dividend for the reporting period, consistent with the prior corresponding period - The Board does not recommend the payment of an interim dividend for the reporting period (prior corresponding period: nil)[21] Segment Information The Group primarily engaged in the resources business during the reporting period and prior corresponding period, with all customer revenue originating from iron ore discharge ports in Mainland China - The Group is principally engaged in the resources business, with all customer revenue derived from Mainland China[22] Financial Resources, Capital Structure and Liquidity The Group maintains a sound financial position with increased total equity and cash, significantly reduced net debt and gearing, and improved current ratio, indicating ample liquidity - The Group finances its operations through internal financial resources, interest-bearing bank and other borrowings, and trade finance bank facilities[23] - As of June 30, 2024, total equity was approximately USD 31.7 million (a year-on-year increase of approximately 4.6%), and cash and cash equivalents were approximately USD 12.9 million (a year-on-year increase of approximately 9.3%), representing approximately 17% of total assets[23] - Interest-bearing bank and other borrowings were approximately USD 13.5 million (a year-on-year decrease of approximately 8.2%), with approximately 80% denominated in USD and approximately 20% in HKD[24] - Net debt was approximately USD 0.6 million (a year-on-year decrease of approximately 78.5%), net gearing ratio was approximately 2% (a year-on-year decrease of 8 percentage points), and current ratio was approximately 1.6 (a year-on-year increase of 0.3)[24] - The Group had unutilised committed loan facilities and trade finance bank facilities totaling approximately USD 330.6 million (a year-on-year increase of approximately 15.2%)[24] Pledge of Assets As of the reporting period end, the Group had no property, plant, and equipment or right-of-use assets pledged for bank borrowings, with utilized bank facilities secured by restricted bank deposits of approximately USD 10.9 million - As of June 30, 2024, no property, plant and equipment or right-of-use assets were pledged as collateral for bank borrowings or bank facilities[25] - Utilised bank facilities were secured by restricted bank deposits totaling approximately USD 10.9 million[25] Foreign Exchange Fluctuation Risk The Group's business is primarily denominated in USD, and with HKD pegged to USD, foreign exchange fluctuation risk is minimal, with no current foreign currency hedging policy - The Group's business activities are primarily conducted in Hong Kong, with most transactions denominated in USD, and HKD is pegged to USD, resulting in minimal foreign exchange fluctuation risk[26] - Currently, the Group has no foreign currency hedging policy[26] Commodity Price Fluctuation Risk The Group manages iron ore price fluctuation risk through futures or swap contracts, partially hedging quotation period differences, holding open contracts with a negative value of approximately USD 2.0 million - The Group manages iron ore market price fluctuation risk by entering into iron ore futures or swap contracts and executing approved hedging strategies[27] - As of June 30, 2024, the Group held open iron ore futures or swap contracts totaling 646,000 tonnes, with a negative contract value of approximately USD 2.0 million, recognized as financial liabilities measured at fair value through profit or loss[27] Other Information This section covers material investments, employee and remuneration policies, and contingent liabilities, providing additional context on the Group's operations Material Investments, Acquisitions and Disposals The Group made no material investments, acquisitions, or disposals during the reporting period and will continue to explore potential projects and investment opportunities - During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals[28] - The Group will continue to explore and evaluate potential projects and investment opportunities to create long-term value for shareholders[28] Employees and Remuneration Policy As of June 30, 2024, the Group had 23 employees with slightly decreased staff costs, and remuneration policy is based on job nature, market conditions, and performance, including year-end bonuses and share option schemes - As of June 30, 2024, the Group employed a total of 23 employees in Hong Kong and Mainland China (consistent with the prior corresponding period)[29] - Staff costs (including directors' emoluments) for the reporting period were approximately USD 1.8 million (prior corresponding period: approximately USD 1.9 million)[29] - Remuneration packages are determined with reference to job nature, market conditions, and employee performance, and include year-end bonuses and share option schemes[29] Contingent Liabilities As of June 30, 2024, the Group had no material contingent liabilities - As of June 30, 2024, the Group had no material contingent liabilities[30] Events After Reporting Period and Outlook This section addresses significant events post-reporting period and outlines the Group's future plans and market expectations Events After Reporting Period No significant events affecting the Group have occurred from June 30, 2024, up to the date of this announcement - No significant events affecting the Group have occurred from June 30, 2024, up to the date of this announcement[31] Outlook and Future Plans The Group anticipates a challenging H2 2024 with low steel demand and iron ore prices, potential temporary declines in hematite quality and shipment rates, and plans to accelerate sales, seek new supplies, and explore M&A opportunities - Steel demand in Mainland China is expected to remain sluggish in the second half of 2024, with iron ore market prices hovering at lower levels[32] - The relocation of major suppliers' operations and mining sites may lead to a temporary reduction in shipment rates and hematite quality (below 65% iron grade) in the third quarter of 2024[32] - The Group will focus on accelerating iron ore sales, identifying and exploring new supplies of iron ore and other commodities, and evaluating potential long-term business relationships to diversify product offerings[32] - The Group will continue to prudently explore and seize suitable merger and acquisition and other cooperation or investment opportunities[32] - Mainland China's manufacturing sector and related steel demand show positive signs supported by exports, which is expected to support steel production and iron ore demand growth in the second half of the year[32] Corporate Governance This section outlines the company's adherence to corporate governance practices, including director conduct and financial information review Corporate Governance Practices The company adopted all applicable code provisions of the Corporate Governance Code during the reporting period without material deviation, with CEO functions performed by executive directors other than the Chairman - The Company adopted all applicable code provisions in Part 2 of the Corporate Governance Code during the reporting period without material deviation[33] - The Company does not have a chief executive officer, and this function is performed by executive directors other than the Chairman of the Board[33] Model Code for Securities Transactions by Directors The company adopted the Model Code for Securities Transactions by Directors, and all directors confirmed compliance during the reporting period - The Company has adopted the Model Code as the code of conduct for directors' securities transactions[34] - All directors confirmed compliance with the required standards set out in the Model Code during the reporting period[34] Review of Interim Financial Information The Audit Committee reviewed the interim results, and Ernst & Young reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410 - The Audit Committee has reviewed the Company's unaudited interim results and interim report and has no disagreement with the accounting treatments[35] - Ernst & Young, the auditor, has reviewed the Group's unaudited interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[35] Purchase, Sale or Redemption of the Company’s Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[36] Publication of Interim Results and Interim Report The interim results announcement has been published on the Stock Exchange and the company website, with the interim report to be dispatched to shareholders and published online in due course - The interim results announcement has been published on the Stock Exchange and the Company's website[37] - The interim report will be dispatched to shareholders and published on the aforementioned websites in due course[37] Definitions This section provides definitions for key terms and abbreviations used in the report to ensure consistent understanding of its content - This section provides definitions for key terms and abbreviations used in the report, such as 'Audit Committee', 'Board', 'Corporate Governance Code', 'Company', and 'prior corresponding period'[38][39][40]