进智公共交通(00077) - 2022 - 中期财报

Financial Statements Independent Auditor's Review Report Grant Thornton Hong Kong Limited, the auditor, reviewed the Group's condensed consolidated interim financial statements for the six months ended September 30, 2021, concluding that nothing indicated the statements were not prepared in all material respects in accordance with HKAS 34 "Interim Financial Reporting" - The auditor issued an unmodified review conclusion on these interim financial statements, deeming them compliant with HKAS 34 in all material respects[2][3] Condensed Consolidated Income Statement For the six months ended September 30, 2021, Group revenue increased by 23.4% to HKD 179 million, driven by passenger volume recovery, while operating profit decreased by 47.6% to HKD 12.14 million due to reduced government subsidies and rising costs, resulting in a profit for the period of HKD 3.7 million after revaluation loss, and basic earnings per share of HKD 1.36 cents Condensed Consolidated Income Statement Summary (For the six months ended September 30) | Metric | 2021 (HKD thousands) | 2020 (HKD thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 178,828 | 144,930 | +23.4% | | Gross Profit | 25,142 | 6,845 | +267.3% | | Operating Profit | 12,142 | 23,149 | -47.6% | | Profit Before Income Tax | 4,520 | 462 | +878.4% | | Profit for the Period | 3,695 | 2,696 | +37.1% | | Basic Earnings Per Share (HK cents) | 1.36 | 0.99 | +37.4% | - A revaluation loss on public light bus licenses of HKD 4.29 million was recorded during the period, significantly lower than HKD 18.48 million in the prior year, contributing to the substantial increase in profit before tax[6] Condensed Consolidated Statement of Comprehensive Income For the six months ended September 30, 2021, the Group recorded no other comprehensive income, thus total comprehensive income for the period equaled profit for the period at HKD 3,695,000 Total Comprehensive Income (For the six months ended September 30) | Metric | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Profit for the Period | 3,695 | 2,696 | | Other Comprehensive Income | – | – | | Total Comprehensive Income for the Period | 3,695 | 2,696 | Condensed Consolidated Statement of Financial Position As of September 30, 2021, total assets were HKD 373 million, a 10.9% decrease from March 2021, with net assets falling 18.4% to HKD 67.92 million primarily due to dividends and reduced reserves, and net current liabilities expanding from HKD 42.43 million to HKD 59.81 million, indicating increased short-term liquidity pressure Condensed Consolidated Statement of Financial Position Summary | Metric | September 30, 2021 (HKD thousands) | March 31, 2021 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 324,220 | 357,010 | -9.2% | | Current Assets | 49,274 | 61,985 | -20.5% | | Total Assets | 373,494 | 418,995 | -10.9% | | Current Liabilities | 109,081 | 104,416 | +4.5% | | Non-current Liabilities | 196,494 | 231,321 | -15.1% | | Total Liabilities | 305,575 | 335,737 | -9.0% | | Net Assets | 67,919 | 83,258 | -18.4% | - The Group's net current liabilities increased to HKD 59.81 million at period-end from HKD 42.43 million at the beginning of the period; however, directors believe the Group has sufficient working capital for continued operation, supported by strong operating cash flows and undrawn bank facilities[23] Condensed Consolidated Statement of Changes in Equity For the six months ended September 30, 2021, total equity decreased from HKD 83.26 million to HKD 67.92 million, primarily due to the distribution of a HKD 19.03 million final dividend for 2021, partially offset by the current period's profit of HKD 3.7 million - Total equity decreased by HKD 15.34 million during the period, primarily due to the distribution of a HKD 19.03 million final dividend[14] Condensed Consolidated Statement of Cash Flows During the period, net cash inflow from operating activities was HKD 52.91 million, largely consistent with the prior year, while net cash outflow from investing activities was HKD 4.83 million for capital expenditure, and net cash outflow from financing activities was HKD 57.31 million for dividends and debt repayment, resulting in a net decrease of HKD 9.23 million in cash and cash equivalents Condensed Consolidated Cash Flow Statement Summary (For the six months ended September 30) | Metric | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Net Cash Inflow from Operating Activities | 52,914 | 55,832 | | Net Cash (Outflow)/Inflow from Investing Activities | (4,834) | 2,559 | | Net Cash Outflow from Financing Activities | (57,305) | (48,317) | | Net (Decrease)/Increase in Cash and Cash Equivalents | (9,225) | 10,074 | | Cash and Cash Equivalents at Beginning of Period | 47,602 | 21,263 | | Cash and Cash Equivalents at End of Period | 38,377 | 31,337 | Notes to the Unaudited Condensed Consolidated Interim Financial Information Company Information, Basis of Preparation and Principal Accounting Policies The Group primarily provides scheduled public light bus and resident bus passenger transport services in Hong Kong, with interim financial information prepared under HKAS 34 using consistent accounting policies, and despite net current liabilities at period-end, directors deem the going concern basis appropriate given operating cash flows and available credit facilities - The Group's principal activities are providing public light bus and resident bus services in Hong Kong[21] - Directors confirm that despite net current liabilities of HKD 59.81 million, the Group possesses sufficient working capital for continued operation[23] Revenue and Segment Information All Group revenue is derived from passenger transport services in Hong Kong and is considered a single operating segment, with total revenue of HKD 179 million for the six months ended September 30, 2021, predominantly from scheduled public light bus services Revenue Composition (For the six months ended September 30) | Service Type | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Scheduled Public Light Bus Services | 175,640 | 142,137 | | Resident Bus Services | 3,188 | 2,793 | | Total | 178,828 | 144,930 | - The Group treats all its operations as a single operating segment, with all revenue and non-current assets originating from Hong Kong[36][37] Other Income and Net Income Total other income and net income for the period was HKD 7.15 million, an 81.0% decrease from HKD 37.53 million in the prior year, primarily due to a sharp reduction in subsidies from the Hong Kong Government's Anti-epidemic Fund from HKD 33.92 million to HKD 3.35 million Other Income and Net Income (For the six months ended September 30) | Item | 2021 (HKD thousands) | 2020 (HKD thousands) | | :--- | :--- | :--- | | Other Income | 3,779 | 3,527 | | Other Net Income (Primarily Government Subsidies) | 3,367 | 34,000 | | Total | 7,146 | 37,527 | - A significant reduction in subsidies from the Hong Kong Government's Anti-epidemic Fund was the primary reason for the year-on-year decrease in other net income[34][35] Assets and Liabilities Analysis At period-end, the Group recorded a revaluation loss of HKD 4.29 million due to a decline in the fair value of public light bus licenses, while accounts receivable and payable maintained healthy aging profiles with most within 30 days, and total lease liabilities decreased to HKD 124 million from the beginning of the period - Due to market changes, the fair value of each public light bus license decreased from HKD 1.965 million to HKD 1.90 million, resulting in a revaluation loss of HKD 4.29 million recognized in the condensed consolidated income statement[49] - As of September 30, 2021, net accounts receivable amounted to HKD 1.93 million, with approximately 75% aged within 30 days[55][57] - As of September 30, 2021, the present value of lease liabilities was HKD 124 million, of which HKD 61.05 million were current liabilities due within one year[61] Dividends and Earnings Per Share The Board did not recommend an interim dividend, while the company paid a final dividend of HKD 0.07 per share for the year ended March 31, 2021, totaling HKD 19.03 million, with basic and diluted earnings per share both at HKD 1.36 cents - The Board did not recommend an interim dividend for the six months ended September 30, 2021[44] - A final dividend for the 2021 fiscal year, totaling HKD 19.034 million, was paid during the period[45] - Basic earnings per share were HKD 1.36 cents, an increase compared to HKD 0.99 cents in the prior year[46] Management Discussion and Analysis Business and Financial Review Following the end of Hong Kong's fourth COVID-19 wave, Group passenger volume rebounded by 22.5%, driving a 23.4% revenue increase; however, soaring fuel costs and significantly reduced government subsidies led to a 66.5% year-on-year profit decline to HKD 7.99 million excluding license revaluation impact, with profit for the period at HKD 3.7 million after revaluation loss, and no interim dividend recommended - Passenger volume rebounded by 22.5% year-on-year, with total mileage increasing by 9.2%, contributing to a HKD 33.9 million increase in revenue[79][83] - Other income and net income significantly decreased by 81.0% from HKD 37.53 million to HKD 7.15 million due to reduced government subsidies[84] - Direct costs increased by 11.3%, primarily driven by a 48.3% surge in fuel costs and an 11.4% rise in driver labor costs[86] Capital Structure, Liquidity, and Financial Resources The Group's working capital primarily stems from operations; at period-end, net current liabilities increased to HKD 59.81 million, current ratio decreased to 0.45x, and gearing ratio rose to 152.3% due to reduced cash and equity, yet the Group retains HKD 38.38 million in cash and undrawn bank facilities despite weakening liquidity metrics Liquidity and Gearing Ratios | Metric | September 30, 2021 | March 31, 2021 | | :--- | :--- | :--- | | Net Current Liabilities | HKD 59.81 million | HKD 42.43 million | | Current Ratio | 0.45x | 0.59x | | Gearing Ratio | 152.3% | 118.3% | - As of September 30, 2021, total bank borrowings amounted to HKD 142 million, with bank balances and cash at HKD 38.38 million[95][96] Risk Management The Group faces significant fuel price risk, with volatility potentially impacting operations, yet no hedging policy is in place; interest rate risk from floating-rate bank borrowings is deemed immaterial by management, while credit and foreign currency risks remain low - The Group faces significant fuel price risk but does not use hedging derivatives for management[104] - Interest rate risk primarily stems from floating-rate bank borrowings, though management believes market interest rate changes will not have a significant impact[104] - The Group's credit and foreign currency risks are very low, as most revenue is cash-based or settled next day, and all operations are denominated in HKD[101][102] Employees and Remuneration Policy As a labor-intensive industry, staff costs represent the Group's largest operating expense, accounting for 52.8% of total costs; employee benefit expenses increased by 6.8% year-on-year to HKD 93.98 million during the period, with 1,198 employees at period-end Employee Data | Metric | September 30, 2021 | Prior Year Period | | :--- | :--- | :--- | | Employee Benefit Expenses | HKD 93.98 million | HKD 88.04 million | | Percentage of Total Costs | 52.8% | 55.4% | | Number of Employees | 1,198 | N/A | Outlook Management anticipates difficulties in fully restoring passenger volume to pre-pandemic levels, with rising international fuel prices and the cessation of government fuel subsidies posing significant adverse impacts on near-term profitability; in response, the Group will optimize operating costs and continue submitting fare increase applications to the Transport Department, hoping for a return to normal approval processes - Key challenges include difficulties in passenger volume recovery, rising international fuel prices, and the termination of government fuel subsidy schemes in June 2021[110] - Response strategies involve optimizing internal operating costs, such as adjusting fleet size and routes, and actively seeking government support for fare increase approvals[111] Other Disclosures Directors' and Substantial Shareholders' Interests The report discloses directors' and substantial shareholders' interests in the company's shares as of September 30, 2021, with Chairman Mr. Wong Ling Sun and his associates collectively holding approximately 60.07% through trusts and personal holdings, and HSBC International Trustee also holding significant shares as trustee - Chairman Mr. Wong Ling Sun is deemed to be interested in 163,345,100 shares of the Company, representing 60.07% of the total issued ordinary shares[113] - Substantial shareholders include HSBC International Trustee, JETSUN, Metro Success, and Skyblue, all related to family trusts of directors such as Mr. Wong Ling Sun[124][125] Share Option Scheme As of September 30, 2021, the company had 6,939,000 outstanding share options; no new options were granted or exercised during the period, but 558,000 options lapsed, and the company adopted a new share option scheme in 2013 to replace the 2004 scheme - As of period-end, there were 6,939,000 outstanding share options with a weighted average exercise price of HKD 1.48[64] - No share options were granted, cancelled, or exercised during the period, while 558,000 share options lapsed[119] Corporate Governance The company consistently complied with the Code Provisions of Appendix 14 of the Listing Rules on Corporate Governance throughout the reporting period; the Audit Committee, comprising three independent non-executive directors, reviewed the interim financial information, and neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - The company confirmed compliance with all applicable code provisions of the Corporate Governance Code during the reporting period[128] - The Audit Committee reviewed these interim results and provided recommendations to the Board[128]