万华媒体(00426) - 2020 - 中期财报

Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss Revenue from continuing operations decreased and operating loss widened, but total loss narrowed due to the absence of prior period discontinued operations | Metric (HKD '000) | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :--- | :--- | :--- | | Continuing Operations | | | | Revenue | 37,790 | 44,692 | | Gross Profit | 8,551 | 15,868 | | Operating Loss | (8,631) | (6,537) | | Loss for the Period | (8,814) | (6,638) | | Loss for the Period from Discontinued Operations | – | (6,678) | | Total Loss for the Period | (8,814) | (13,316) | - Basic and diluted loss per share from continuing operations was 2.20 HK cents, an increase from 1.65 HK cents in the prior period. Including discontinued operations, total loss per share narrowed from 3.32 HK cents to 2.20 HK cents[2][56] Condensed Consolidated Statement of Comprehensive Income Total comprehensive loss for the period significantly narrowed, mainly due to a reduced loss from fair value changes of financial assets | Metric (HKD '000) | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :--- | :--- | :--- | | Loss for the Period | (8,814) | (13,316) | | Fair Value Changes of Financial Assets | (4,657) | (45,157) | | Total Comprehensive Loss for the Period | (13,467) | (57,454) | Condensed Consolidated Statement of Financial Position Total assets and equity decreased as of September 30, 2019, with initial recognition of right-of-use assets and lease liabilities due to new leasing standards | Metric (HKD '000) | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Total Assets | 62,048 | 70,943 | | Total Non-Current Assets | 31,175 | 30,416 | | Total Current Assets | 30,873 | 40,527 | | Total Equity | 40,585 | 54,052 | | Total Liabilities | 21,463 | 16,891 | | Total Current Liabilities | 18,012 | 16,837 | - Cash and cash equivalents decreased from HK$22,843 thousand at the beginning of the period to HK$16,457 thousand at period-end[5] Condensed Consolidated Statement of Changes in Equity Total shareholders' equity decreased from the beginning to the end of the period, primarily due to the total comprehensive loss recorded - Total equity decreased by HK$13,467 thousand for the six months ended September 30, 2019, primarily comprising a loss for the period of HK$8,814 thousand and a loss from fair value changes of financial assets of HK$4,657 thousand[6] Condensed Consolidated Statement of Cash Flows Net cash used in operating and investing activities led to a decrease in cash and cash equivalents at period-end | Metric (HKD '000) | Six Months Ended September 30, 2019 | Six Months Ended September 30, 2018 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (5,864) | (11,006) | | Net Cash Used in Investing Activities | (281) | (98) | | Net Cash Used in Financing Activities | (245) | – | | Net Decrease in Cash and Cash Equivalents | (6,390) | (11,104) | | Cash and Cash Equivalents at Period-End | 16,457 | 17,994 | Notes to the Financial Statements General Information, Basis of Preparation and Accounting Policies The unaudited interim financial information is prepared under IAS 34, with IFRS 16 'Leases' adopted from April 1, 2019, recognizing right-of-use assets and lease liabilities - The Group primarily engages in media business, including magazine publishing and digital media, in Hong Kong and Taiwan[10] - The Group adopted IFRS 16 'Leases' from April 1, 2019, using the simplified transition approach without restating comparative period data, leading to the recognition of right-of-use assets and lease liabilities on the statement of financial position[19][23] Impact of IFRS 16 Adoption (HKD '000) | Metric (HKD '000) | April 1, 2019 | | :--- | :--- | | Right-of-Use Assets - Increase | 6,620 | | Lease Liabilities - Increase | 6,620 | Revenue and Segment Information The Group's business is segmented into 'Entertainment and Lifestyle' and 'Watches and Automobiles and Others', experiencing overall revenue decline and reduced profitability in its primary segment Business Segment Performance (HKD '000) | Business Segment (HKD '000) | Revenue (2019 H1) | Segment Loss (2019 H1) | Revenue (2018 H1) | Segment Loss (2018 H1) | | :--- | :--- | :--- | :--- | :--- | | Entertainment and Lifestyle Business | 30,139 | (4,819) | 36,675 | (2,075) | | Watches and Automobiles Business and Others | 7,651 | (1,674) | 8,017 | (1,186) | | Total | 37,790 | (6,493) | 44,692 | (3,261) | - The majority of the Group's revenue (HK$30,027 thousand) is recognized over time, while HK$7,763 thousand is recognized at a point in time[41] Discontinued Operations The Group discontinued its mainland China magazine business in the prior period by selling two subsidiaries, eliminating a loss present in the prior period - Due to the disposal of its mainland China business, the Group recognized a net loss on disposal of HK$1,641 thousand and recorded a total loss from discontinued operations of HK$6,678 thousand in the prior period[52][54] Loss Per Share and Dividends Basic and diluted loss per share from continuing operations was 2.20 HK cents, with no interim dividend recommended by the Board - The Directors do not recommend the payment of an interim dividend for the six months ended September 30, 2019[57] Details of Assets and Liabilities Intangible assets, financial assets at fair value through other comprehensive income, and trade receivables all decreased at period-end Selected Assets/Liabilities (HKD '000) | Asset/Liability Item (HKD '000) | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Intangible Assets | 4,765 | 4,894 | | Financial Assets at Fair Value Through Other Comprehensive Income | 19,238 | 23,895 | | Trade Receivables | 11,655 | 13,798 | | Trade Payables | 4,254 | 4,174 | - At period-end, the Group recognized a new unsecured short-term bank borrowing of HK$810 thousand with an annual interest rate of 3.44%[68] Related Party Transactions The Group engages in various transactions with fellow subsidiaries under its ultimate parent, primarily for support services on a cost reimbursement basis - The Company's ultimate parent company is World Chinese Media Limited[71] Related Party Transaction Expenses (HKD '000) | Related Party Transaction Expenses (HKD '000) | 2019 H1 | 2018 H1 | | :--- | :--- | :--- | | Administrative Support and Information System Services | 2,447 | 2,610 | | Office, Warehouse, and Car Park Leases | 1,396 | 1,288 | | Publishing Support Services | 479 | 445 | Management Discussion and Analysis Results Review Hong Kong's economic recession and trade war impacted the Group's business, yet loss attributable to owners narrowed due to discontinued operations and cost control - Hong Kong's GDP decreased by 2.9% year-on-year in Q3 2019, and total retail sales plummeted by 18.3% in September, posing challenges to the Group's economic environment[77] - The Group's improved performance is primarily attributable to two factors: the cessation of its mainland China operations and effective control over operating costs[77] Business Review The core 'Entertainment and Lifestyle' business faced significant revenue decline and loss expansion, while the Group consolidates digital business, controls costs, and explores new opportunities - The flagship publication, Ming Pao Weekly, was affected by weak demand from luxury brands, but its social media segment attracted more readers during the turbulent period[78] - To counter revenue decline, the Group has intensified cost optimization efforts, including saving on printing costs, retraining, and reorganizing manpower allocation[80] - The Group holds approximately 7.5% equity interest in Mao G Kee Kwai Chung Limited, a Hong Kong-listed company, as part of its media investments[82] Outlook The Group anticipates a challenging second half due to slow economic growth and market disruptions, focusing on enhancing readership and developing advertising production services amidst weak advertising expenditure - Facing a challenging market environment, the Group's strategic focus is to enhance its readership and continue developing its advertising production services[83] Other Information Directors' and Major Shareholders' Interests The report discloses directors' holdings and identifies Comwell Investment Limited, an indirect wholly-owned subsidiary of the ultimate parent, as the major controlling shareholder - Comwell Investment Limited holds 292,700,000 shares, representing 73.01% of the Company's issued ordinary shares, and is an indirect wholly-owned subsidiary of World Chinese Media Limited[91] Employee Information As of September 30, 2019, the Group had 153 employees, with compensation determined by performance, individual merit, and market levels - As of September 30, 2019, the Group had 153 employees[93] Corporate Governance The Company largely complied with the Corporate Governance Code, with a temporary shortfall in independent non-executive directors due to a resignation, subsequently rectified by new appointments - Due to Mr. Yeung Ngai Ming's resignation, the Company temporarily did not fully comply with Listing Rules regarding the number of independent non-executive directors (Rule 3.10(1)), Audit Committee members (Rule 3.21), and Nomination Committee Chairman (Code A.5.1)[94] - With the appointment of Mr. Chow Cheuk Wah on September 1, 2019, the Company has re-complied with the relevant Listing Rules requirements[95]