Financial Performance - For the six months ended September 30, 2021, the group's revenue decreased by 13% to HKD 416,564,000 compared to HKD 477,277,000 for the same period in 2020[11]. - The group's net profit fell by 51% to HKD 10,993,000, down from HKD 22,425,000 in the previous year[11]. - The timber supply chain operations generated revenue of HKD 399,703,000, a 13% decrease from HKD 459,108,000 in the same period last year[12]. - The profit from timber supply chain operations decreased by 27% to HKD 11,487,000, down from HKD 15,758,000 in the previous year[12]. - The traditional business model within the timber supply chain generated revenue of HKD 290,965,000, down from HKD 366,902,000, with hardwood log trading volume exceeding 132,000 cubic meters compared to 178,000 cubic meters in the previous year[13]. - The overall decline in revenue and profit was attributed to increased transportation and freight costs, as well as higher impairment losses on receivables[11]. - Operating profit for the same period was HKD 16,477,000, down 41.8% from HKD 28,329,000 in 2020[76]. - Total comprehensive income for the period was HKD 10,599,000, down 53.3% from HKD 22,673,000 in 2020[78]. - Basic earnings per share for the company were HKD 0.098, down from HKD 0.232 in the same period of 2020[48]. - For the six months ended September 30, 2021, the profit attributable to shareholders was HKD 8,938,000, a decrease of 57.6% compared to HKD 21,085,000 for the same period in 2020[137]. Business Operations - The group continues to establish a global supply sourcing network primarily serving clients in China and other Asian countries[12]. - The management team is focused on maintaining a strong recurring business flow through established supplier and customer relationships[12]. - The optimized business model in the European timber supply chain generated revenue of HKD 108,738,000 in the first half of 2021, up from HKD 92,206,000 in the same period of 2020, representing a growth of approximately 17.9%[14]. - The company established distribution centers in Slovenia, Romania, and Croatia, enhancing its competitive advantage and diversifying its customer base and revenue sources[29]. - The company signed a four-year logging rights agreement in Romania, allowing for timber harvesting in its forest interests[28]. - New business projects are being launched in Europe to diversify and strengthen the timber supply chain business, including distribution centers and processing projects in Croatia[67]. - The company aims to meet customer orders by potentially purchasing additional timber from local suppliers if production capacity is exceeded[29]. Financial Position - Current assets rose to HKD 544,198,000 as of September 30, 2021, up from HKD 482,030,000 on March 31, 2021, with cash and cash equivalents increasing to HKD 120,041,000 from HKD 109,198,000[54]. - The company's current ratio improved to approximately 2.1 as of September 30, 2021, compared to 1.9 on March 31, 2021, reflecting stronger liquidity[54]. - Total borrowings increased to HKD 236,999,000 as of September 30, 2021, up from HKD 112,396,000 on March 31, 2021, with a capital debt ratio rising to 99% from 49%[55]. - Total assets slightly increased by HKD 15,970,000 or 3% to HKD 552,384,000 as of September 30, 2021, compared to HKD 536,414,000 on March 31, 2021[57]. - Equity attributable to owners rose by 4% or HKD 8,806,000 to HKD 239,818,000 as of September 30, 2021, driven by profits from the timber supply chain and lending businesses[57]. Lending Business - The lending business generated revenue of HKD 16,449,000 in the first half of 2021, a decrease of 7% compared to HKD 17,722,000 in the same period of 2020[34]. - Operating profit for the lending business was HKD 10,381,000, down 30% from HKD 14,900,000 year-on-year, primarily due to a 3.3 times increase in impairment losses on receivables to HKD 3,730,000[34]. - The total principal amount of new loans granted during the review period was HKD 22,000,000, with an annual interest rate of 12% and a term of 12 to 18 months[38]. - The cumulative expected credit loss recorded as of September 30, 2021, was HKD 8,738,000, an increase from HKD 5,141,000 as of March 31, 2021[45]. - The weighted average interest rate of the loan and finance lease portfolio reached approximately 11%, with 93% of the portfolio secured by collateral[39]. Costs and Expenses - The increase in administrative expenses and financing costs contributed to the decline in overall profitability[11]. - The company's administrative expenses increased by 33% to HKD 15,124,000, primarily due to rising employee costs and legal fees related to the resumption of trading of the company's shares[48]. - The financing costs increased to HKD 4,338,000 for the period, a rise of 55% from HKD 2,798,000 on September 30, 2020, primarily due to increased interest on discounted receivables[53]. - The group recorded a total employee compensation increase of 33% to HKD 7,264,000 for the first half of 2021, compared to HKD 5,448,000 in the same period of 2020[65]. Foreign Currency and Risk Management - The group has maintained a prudent strategy for foreign currency risk management, balancing foreign currency assets with corresponding liabilities to minimize exchange rate risks[63]. - The group has not experienced significant risks from the appreciation of the Euro due to matching Euro-denominated income and expenses[64]. - The group will continue to monitor foreign currency risks closely and will take appropriate hedging measures when significant risks arise[64]. - The total proportion of Romanian Leu, Croatian Kuna, Brazilian Real, and Renminbi in the group's total transactions, assets, and liabilities is relatively low, resulting in no significant exchange rate risk[64]. Legal and Compliance - The company faces a claim of approximately HKD 1,952,000 related to ongoing litigation, which has been accounted for in other payables[60]. - The company regularly monitors compliance with bank financing covenants, with no breaches reported as of September 30, 2021[165]. Shareholder Information - The total issued and fully paid ordinary shares as of September 30, 2021, amounted to 30,000,000 shares, with a total capital of HKD 575,340,000[181]. - Director Wang Jingyu holds 2,444,359,944 shares, representing approximately 26.84% of the company's issued shares[197]. - No interim dividend was declared for the six months ended September 30, 2021, consistent with the previous year[196].
信保环球控股(00723) - 2022 - 中期财报