万华媒体(00426) - 2022 - 中期财报

Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss Turnover slightly increased by 5.2% YoY to HK$21.85 million, and with effective cost control, operating loss narrowed significantly from HK$9.47 million to HK$3.73 million, improving loss per share | Indicator | For the six months ended 30 Sep 2021 (HK$ thousands) | For the six months ended 30 Sep 2020 (HK$ thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Turnover | 21,853 | 20,777 | +5.2% | | Gross Profit/(Loss) | 3,651 | (2,146) | Turned from loss to profit | | Operating Loss | (3,730) | (9,465) | Loss narrowed 60.6% | | Loss for the period | (4,133) | (9,586) | Loss narrowed 56.9% | | Basic loss per share (HK cents) | (1.03) | (2.39) | Loss narrowed 56.9% | Condensed Consolidated Statement of Comprehensive Income Despite a narrower loss for the period, total comprehensive loss expanded to HK$4.74 million from HK$0.56 million last year due to a fair value loss on financial assets | Indicator | For the six months ended 30 Sep 2021 (HK$ thousands) | For the six months ended 30 Sep 2020 (HK$ thousands) | | :--- | :--- | :--- | | Loss for the period | (4,133) | (9,586) | | Fair value change of financial assets | (600) | 9,102 | | Total comprehensive loss for the period | (4,740) | (556) | Condensed Consolidated Statement of Financial Position Total assets slightly decreased to HK$128.77 million, while total equity shrank to HK$0.77 million, with operations heavily reliant on a HK$115 million loan from a fellow subsidiary | Indicator | 30 Sep 2021 (HK$ thousands) | 31 Mar 2021 (HK$ thousands) | | :--- | :--- | :--- | | Total Assets | 128,768 | 133,942 | | Total Liabilities | 127,995 | 128,429 | | Total Equity | 773 | 5,513 | | Cash and cash equivalents | 111,029 | 115,082 | | Loan from a fellow subsidiary | 115,000 | 115,000 | Condensed Consolidated Statement of Changes in Equity Total equity decreased by 86% from HK$5.51 million to HK$0.77 million, primarily driven by the net loss and other comprehensive loss recorded during the period - Total comprehensive loss for the period was HK$4.74 million, comprising a loss for the period of HK$4.13 million and other comprehensive loss of HK$0.61 million, leading to a significant drop in total equity[6] Condensed Consolidated Statement of Cash Flows Net cash used in operating activities improved significantly to HK$3.33 million, reflecting enhanced operational efficiency, with period-end cash at HK$111.03 million | Indicator | For the six months ended 30 Sep 2021 (HK$ thousands) | For the six months ended 30 Sep 2020 (HK$ thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,328) | (10,600) | | Net cash (used in)/from investing activities | (31) | 12,037 | | Net cash (used in)/from financing activities | (701) | 10,828 | | Net decrease in cash and cash equivalents | (4,060) | 12,265 | | Cash and cash equivalents at end of period | 111,029 | 22,169 | Notes to the Condensed Consolidated Interim Financial Information Note 1-4 General Information, Basis of Preparation, and Accounting Policies These unaudited interim financial statements were prepared under IAS 34, with the Group's primary media operations in Hong Kong and Taiwan and consistent accounting policies - The Company is an investment holding company, and its subsidiaries are principally engaged in the media business in Hong Kong and Taiwan[10] - This interim financial information is unaudited and has been prepared in accordance with International Accounting Standard 34[11][12] Note 5 Financial Risk Management The Group manages credit, liquidity, and interest risks with unchanged policies, utilizing a HK$125 million facility from a fellow subsidiary to mitigate liquidity risk - The Group obtained a total financing facility of HK$125 million from a fellow subsidiary, of which HK$115 million has been utilized, to manage liquidity risk[18] - The Group's listed securities (valued at HK$6.72 million) measured at FVTOCI are classified as Level 1 of the fair value hierarchy, based on quoted market prices[19][20] Note 6 Turnover and Segment Information Total turnover grew 5.2% to HK$21.85 million, driven by the Entertainment & Lifestyle segment, with losses narrowing in both segments due to effective cost controls | Segment (For the six months ended 30 Sep 2021) | Turnover (HK$ thousands) | Segment Loss (HK$ thousands) | | :--- | :--- | :--- | | Entertainment and Lifestyle Business | 16,920 | (783) | | Watches and Auto Business and Others | 4,933 | (872) | | Total | 21,853 | (1,655) | | Segment (For the six months ended 30 Sep 2020) | Turnover (HK$ thousands) | Segment Loss (HK$ thousands) | | :--- | :--- | :--- | | Entertainment and Lifestyle Business | 15,997 | (5,431) | | Watches and Auto Business and Others | 4,780 | (1,686) | | Total | 20,777 | (7,117) | - The majority of revenue (HK$16.50 million, or 75.5% of total) is recognized over time, while HK$5.35 million is recognized at a point in time[28] Note 7-10 Other Income, Operating Loss and Finance Costs Other income was HK$5.82 million, mainly from a one-off termination fee, while a significant reduction in employee benefit expenses helped narrow the operating loss - Other income included HK$5 million received by a subsidiary from an independent third party for the early termination of a management agreement[33] | Expense Item | For the six months ended 30 Sep 2021 (HK$ thousands) | For the six months ended 30 Sep 2020 (HK$ thousands) | | :--- | :--- | :--- | | Employee benefit expense | 19,853 | 24,232 | | Finance costs | 325 | 81 | Note 12-13 Loss Per Share and Dividends Basic and diluted loss per share improved to 1.03 HK cents from 2.39 HK cents in the prior year, and the Board does not recommend an interim dividend - Basic and diluted loss per share was 1.03 HK cents[40] - The Directors do not recommend the payment of an interim dividend for the six months ended 30 September 2021[41] Note 14-17 Significant Assets and Investments The Group's intangible assets have a net book value of zero, its main financial asset is a stake in Most Kwai Chung Limited, and it holds a 50% interest in an e-commerce JV - The Group's intangible assets (computer software, goodwill, trademarks) have a net book value of zero after accumulated amortization and impairment[43] - The Group holds ordinary shares in Most Kwai Chung Limited as a strategic investment, with a fair value of HK$6.72 million at period-end, recording a fair value loss of HK$0.60 million[46] - The Group holds a 50% equity interest in a joint venture, Searching B Company Limited, which operates an e-commerce platform focused on beauty products[47][49] Note 20-21 Related Party Transactions The Group engages in various transactions with its ultimate parent, Media Chinese, with a critical HK$115 million loan from a fellow subsidiary supporting its operations - The Company's ultimate parent company is Media Chinese International Limited[61] - The Group has a drawn-down loan of HK$115 million from a fellow subsidiary, which is a non-current liability and a key financial resource for the Group[60][66] - During the period, the Group conducted several transactions with related parties, including payments for various support services and incurring HK$0.31 million in loan interest expense[62] Management Discussion and Analysis Results Summary and Business Review Turnover grew 5% to HK$21.85 million amid economic recovery, and loss attributable to owners narrowed significantly to HK$4.13 million due to effective cost controls | Indicator | For the six months ended 30 Sep 2021 | For the six months ended 30 Sep 2020 | | :--- | :--- | :--- | | Turnover | HK$21.85 million | HK$20.78 million | | Loss attributable to owners of the Company | HK$4.13 million | HK$9.59 million | | Loss excluding one-off income | HK$9.22 million | HK$16.32 million | Entertainment and Lifestyle Business This core segment's turnover grew 6% to HK$16.92 million while its loss narrowed significantly to HK$0.78 million, driven by cost savings and strategic business expansion - Segment turnover grew by 6% and loss narrowed significantly, mainly due to increased turnover and cost savings[71] - Strategic priorities include diversifying beyond luxury brands, developing e-commerce platforms like 'searchingb.com', and growing the artist management business[71] Watches and Auto Business and Others This segment's turnover rose 3% to HK$4.93 million and its loss narrowed by 48% to HK$0.87 million, driven by higher turnover and cost control measures - Segment turnover grew by 3% and loss narrowed by 48%, primarily due to increased turnover and further cost savings[72] Significant Investments, Outlook, and Financial Position The Group holds a strategic investment in Most Kwai Chung, anticipates a challenging market ahead, and maintains a high gearing ratio of 84% due to a large related-party loan - Holds a 4.4% stake in Most Kwai Chung as a strategic investment, accounting for approximately 5% of the Group's total assets[73] - Outlook: The second half of the year is expected to remain challenging due to cautious advertiser spending; the Group will focus on sales efficiency and digital content[74] | Financial Indicator | 30 Sep 2021 | | :--- | :--- | | Net current assets | HK$108.51 million | | Cash and cash equivalents | HK$111.03 million | | Gearing ratio | 84% | Other Disclosures Directors' and Substantial Shareholders' Interests This section details director and substantial shareholder interests, with Comwell Investment Limited being the controlling shareholder holding 73.01% of the shares | Substantial Shareholder | Number of Shares | Capacity | Shareholding Percentage | | :--- | :--- | :--- | :--- | | Comwell Investment Limited | 292,700,000 | Beneficial owner | 73.01% | | Tan Sri Datuk Sir Tiong Hiew King | 292,700,000 | Interest of controlled corporation | 73.01% | | Dato' Sri Dr Tiong Ik King | 292,700,000 | Interest of controlled corporation | 73.01% | Corporate Governance and Compliance The Company has adopted and complied with the Corporate Governance Code, with established committees and confirmation of compliance with the Model Code for securities trading - For the six months ended 30 September 2021, the Company has adopted and complied with the code provisions of the Corporate Governance Code[87] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial information for the six months ended 30 September 2021[90] - The Directors confirmed their compliance with the required standard set out in the Model Code for securities transactions by directors throughout the period[89]