进智公共交通(00077) - 2020 - 中期财报

Condensed Consolidated Interim Financial Information Condensed Consolidated Statement of Profit or Loss The Group's revenue slightly increased to HKD 195.07 million for the six months ended September 30, 2019, with net loss significantly narrowing to HKD 9.42 million due to reduced non-cash revaluation loss on public light bus licenses Condensed Consolidated Statement of Profit or Loss | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 195,073 | 194,482 | | Gross Profit | 33,791 | 31,568 | | Operating Profit | 18,904 | 15,140 | | Loss Before Income Tax | (6,914) | (25,576) | | Loss for the Period | (9,422) | (27,643) | | Basic Loss Per Share | (3.47) HK cents | (10.17) HK cents | Condensed Consolidated Statement of Comprehensive Income Total comprehensive expense for the period significantly decreased to HKD 9.78 million from HKD 31.55 million in the prior period, primarily due to a reduction in public light bus license revaluation loss Condensed Consolidated Statement of Comprehensive Income | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Loss for the Period | (9,422) | (27,643) | | Revaluation Deficit on Public Light Bus Licenses | (360) | (3,907) | | Total Comprehensive Expense for the Period | (9,782) | (31,550) | Condensed Consolidated Statement of Financial Position As of September 30, 2019, the Group's net assets decreased to HKD 96.59 million from HKD 128 million, with the adoption of HKFRS 16 leading to new right-of-use assets of HKD 66.48 million and lease liabilities of HKD 66.59 million, and net current liabilities expanding to HKD 95.76 million Condensed Consolidated Statement of Financial Position | Metric | September 30, 2019 (Unaudited) (Thousand HKD) | March 31, 2019 (Audited) (Thousand HKD) | | :--- | :--- | :--- | | Non-current Assets | 319,912 | 268,798 | | Of which: Right-of-use Assets | 66,479 | – | | Of which: Public Light Bus Licenses | 174,240 | 198,000 | | Current Assets | 39,254 | 45,910 | | Current Liabilities | 135,016 | 64,524 | | Of which: Lease Liabilities | 66,585 | – | | Net Current Liabilities | (95,762) | (18,614) | | Net Assets | 96,585 | 128,120 | Condensed Consolidated Statement of Changes in Equity As of September 30, 2019, total equity decreased from HKD 128 million to HKD 96.59 million, primarily due to a HKD 9.42 million loss for the period, a HKD 0.36 million revaluation loss on public light bus licenses, and a HKD 21.75 million special dividend paid - The primary reasons for the decrease in total equity during the period include a HKD 9.42 million loss for the period, a HKD 0.36 million reduction in public light bus license revaluation reserve, and the payment of a HKD 21.75 million special dividend[17] Condensed Consolidated Statement of Cash Flows Net cash inflow from operating activities for the period was HKD 56.85 million, significantly higher than the prior period, while net cash outflow from financing activities substantially increased to HKD 53.99 million due to dividend payments and new lease liability repayments, resulting in a HKD 3.74 million decrease in cash and cash equivalents to HKD 29.09 million at period-end Condensed Consolidated Statement of Cash Flows | Metric | Six Months Ended September 30 (2019) (Thousand HKD) | Six Months Ended September 30 (2018) (Thousand HKD) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 56,854 | 17,365 | | Net Cash Outflow from Investing Activities | (6,610) | (7,261) | | Net Cash Outflow from Financing Activities | (53,988) | (20,197) | | Net Decrease in Cash and Cash Equivalents | (3,744) | (10,093) | | Cash and Cash Equivalents at End of Period | 29,085 | 28,137 | Notes to the Financial Statements Basis of Preparation and Principal Accounting Policies These interim financial statements are prepared in accordance with HKAS 34, and despite HKD 95.76 million in net current liabilities, directors deem the going concern basis appropriate due to strong operating cash flows and expected renewal of bank facilities - The financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[24] - Despite HKD 95.76 million in net current liabilities, directors consider the company a going concern based on strong operating cash flows and the renewability of bank facilities[25] Changes in Accounting Policies Effective April 1, 2019, the Group first adopted HKFRS 16 'Leases' using the modified retrospective approach, recognizing HKD 94.63 million in right-of-use assets and corresponding lease liabilities, adjusting opening equity without restating comparative figures - The Group first applied HKFRS 16 'Leases' during this interim period, opting for the modified retrospective approach without restating comparative information[28][29] Impact of HKFRS 16 Adoption | Impact Item | Amount (Thousand HKD) | | :--- | :--- | | Increase in Right-of-use Assets | 94,633 | | Increase in Current Lease Liabilities | 62,941 | | Increase in Non-current Lease Liabilities | 31,692 | - Adoption of HKFRS 16 resulted in a HKD 34.45 million increase in operating cash flow and an equivalent decrease in financing cash flow due to lease liability payments[38] Capital Expenditure and Public Light Bus Licenses During the period, the fair value of each public light bus license decreased from HKD 3 million to HKD 2.64 million, resulting in a HKD 23.76 million revaluation loss, with HKD 23.40 million recognized in profit or loss and HKD 0.36 million in revaluation reserve, classified as Level 2 fair value measurement - As of September 30, 2019, the fair value of each public light bus license decreased to HKD 2,640,000 (from HKD 3,000,000 at the beginning of the period)[64] - The decline in license value resulted in a total revaluation loss of HKD 23.76 million, with HKD 23.40 million deducted in the statement of profit or loss and HKD 0.36 million treated in the revaluation reserve[61] - The fair value measurement of public light bus licenses is classified as Level 2 in the valuation hierarchy, based on market observable data[64][67] Related Party Transactions The Group engaged in various transactions with companies controlled by Director Mr. Wong Ling Sun and his associates, primarily involving public light bus lease payments and administrative fees, with total lease payments to related companies amounting to HKD 33.48 million during the period, all conducted on mutually agreed terms in the ordinary course of business Related Party Transactions | Related Company | Nature of Transaction | Amount (Thousand HKD) | | :--- | :--- | :--- | | Chung Kong Transport Consultants Limited | Public Light Bus Lease Payments | 10,447 | | Man Shing Transport Company Limited | Public Light Bus Lease Payments | 11,980 | | Tai Sum Company Limited | Public Light Bus Lease Payments | 11,052 | - The related companies involved in the above transactions are controlled by Directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man, who hold directorships and beneficial interests[86] Management Discussion and Analysis Results and Dividends Excluding the non-cash revaluation loss on public light bus licenses, the Group recorded a net profit of HKD 13.98 million, a 23.2% year-on-year increase, primarily due to government subsidies, while the reported net loss was HKD 9.42 million after including the revaluation loss, and the Board did not recommend an interim dividend - Excluding the non-cash revaluation deficit on public light bus licenses, the Group's net profit was HKD 13.98 million, representing a 23.2% year-on-year increase[90] - The Board did not recommend the payment of an interim dividend[91] Business and Financial Review The Group continued upgrading its fleet to 19-seater minibuses, increasing average seating capacity, but social events since June 2019 led to a 1.5% drop in passenger volume and a 3.1% decrease in mileage, prompting successful fare increases for 14 routes, while fuel and maintenance costs declined, labor costs rose due to salary adjustments - The Group continued replacing 16-seater minibuses with 19-seater models, with 19-seater minibuses accounting for 52.7% of the fleet by period-end, increasing the average seating capacity by 4.2%[91] - Affected by social events since June 2019, service disruptions and reduced passenger flow led to a 1.5% decrease in passenger volume and a 3.1% decline in total mileage[93] - During the period, 14 routes received approved fare increases ranging from 2.9% to 9.7%, offsetting the impact of declining passenger volume and resulting in a 0.3% slight increase in revenue[95] - Direct cost components include a 4.3% decrease in fuel costs due to lower prices and consumption, a 3.1% increase in labor costs due to salary adjustments, and a 9.6% decrease in maintenance costs due to a younger fleet[99][100] Capital Structure and Liquidity Adoption of HKFRS 16 significantly increased current liabilities, reducing the current ratio to 0.29x, while the debt-to-equity ratio (net debt/equity) substantially rose from 91.2% to 129.0% due to reduced shareholders' equity from dividend payments and license value decline, with the Group's working capital primarily sourced from operations and sufficient bank facilities available - Following the adoption of HKFRS 16, net current liabilities increased to HKD 95.76 million, and the current ratio decreased to 0.29x[112] - The debt-to-equity ratio increased from 91.2% at the beginning of the period to 129.0%, primarily due to a 24.6% reduction in shareholders' equity from dividend payments and license revaluation losses[119] - At period-end, the Group had total bank facilities of HKD 163 million, with HKD 154 million utilized, and certain assets pledged as collateral[114][119] Outlook Looking ahead, the US-China trade war, economic weakness, and Hong Kong social unrest create operational uncertainties, expected to impact passenger volume, prompting the Group to continue route restructuring, fleet optimization, and fare increase applications, while government fuel subsidies will help mitigate cost pressures, though public light bus license market values may further decline, continuously impacting reported results - Management anticipates that social events will continue to impact passenger volume, leading to an uncertain operating outlook[129] - Response strategies include ongoing route restructuring, upgrading the fleet to 19-seater minibuses (targeting an additional 49 replacements by end of 2020), collaborating with other transport operators for interchange discounts, and applying for fare increases when appropriate[129] - The government's six-month fuel subsidy will help alleviate some cost pressures[130] - Management warns that the market value of public light bus licenses may further depreciate, and their accounting revaluation losses could continue to adversely affect financial year results[130] Other Disclosures Directors' and Chief Executives' Interests in Shares The report details the shareholdings of directors and major shareholders, with directors Mr. Wong Ling Sun, Ms. Ng Shui Chun, Ms. Wong Wai Sum, and Ms. Wong Wai Man holding significant company shares indirectly through The JetSun Trust, for which HSBC International Trustee Limited acts as trustee and a major shareholder - Several directors indirectly hold 43.27% of the company's shares through The JetSun Trust, managed by HSBC International Trustee[132][145] Share Options As of September 30, 2019, the company had 7,497,000 outstanding share options granted under the 2004 and 2013 schemes, with no options granted, exercised, cancelled, or lapsed during the reporting period Outstanding Share Options | Grantee | Number of Outstanding Share Options | | :--- | :--- | | Directors | 1,158,000 | | Other Eligible Employees | 6,339,000 | | Total | 7,497,000 | - For the six months ended September 30, 2019, no share options were granted, cancelled, lapsed, or exercised[144] Corporate Governance The company complied with the Listing Rules' Corporate Governance Code during the reporting period, and the Audit Committee, comprising three independent non-executive directors, reviewed the interim financial information and results, providing recommendations to the Board - The company has consistently complied with the code provisions set out in Appendix 14 of the Listing Rules, 'Corporate Governance Code and Corporate Governance Report'[149] - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial information and interim results announcement[149]