Financial Performance - The company's revenue for 2020 was HKD 849 million, a decrease of 81.4% compared to HKD 4,561 million in 2019[5]. - Gross profit for 2020 was HKD 74 million, down 63.7% from HKD 204 million in 2019[5]. - The net loss for the year was HKD 2,433 million, significantly higher than the loss of HKD 1,116 million in 2019[5]. - The group's consolidated revenue decreased significantly by 81.4% to approximately HKD 848,900,000 compared to HKD 4,561,400,000 in 2019[37]. - Gross profit for the year fell by about 63.6% to approximately HKD 74,100,000, down from HKD 203,500,000 in 2019[37]. - The group recorded a net loss of approximately HKD 2,433,300,000 for the year, which includes a one-time loss of about HKD 728,200,000 related to convertible bonds[38]. - The upstream business revenue plummeted by approximately 90.5% to about HKD 248,600,000, down from HKD 2,626,300,000 in 2019[40]. - Amino acid segment revenue decreased sharply to approximately HKD 36.6 million, down 96.3% from HKD 991.6 million in 2019, with sales volume dropping to 7,000 tons from 186,000 tons[42]. - The gross profit for the amino acid segment was approximately HKD 1.4 million, a significant improvement from a gross loss of HKD 53.2 million in 2019, resulting in a gross margin of 3.8%[42]. - Corn sweetener segment revenue fell by 39.2% to approximately HKD 558.1 million, down from HKD 918.4 million in 2019, with sales volume decreasing by 41.8% to about 174,000 tons[45][46]. - The gross profit for the corn sweetener segment decreased by 54.3% to HKD 52 million, with a gross margin of approximately 9.3%, down from 12.4% in 2019[46]. - Bio-chemical alcohol segment revenue dropped 77.7% to approximately HKD 5.6 million, down from HKD 25.1 million in 2019, with a gross profit of HKD 2.4 million and a gross margin of 42.9%[47]. Debt and Financial Management - The company is actively restructuring its debt to alleviate financial pressure and improve cash flow[10]. - The company aims to resolve heavy debt issues and has entered into a repurchase agreement to settle outstanding loans, marking a significant milestone in improving its financial situation[18]. - The company plans to continue seeking additional funding sources to strengthen its overall financial position[12]. - Financial costs related to financial guarantee contracts were approximately HKD 153.5 million for the year, up from HKD 110.8 million in 2019[30]. - The group recorded a net loss of approximately HKD 2,433,300,000 for the year, up from HKD 1,116,300,000 in 2019, resulting in a net debt of approximately HKD 6,017,100,000[67]. - The capital debt ratio increased to 387.5% from 232.4% in 2019, attributed to the net loss and increased borrowings[67]. - As of December 31, 2020, total borrowings increased by approximately HKD 481.8 million to about HKD 8.1 billion, with net borrowings rising to approximately HKD 7.9 billion[59]. - The repayment ratio for interest-bearing and other borrowings within one year and from the second to the fifth year was 97.7% and 2.3%, respectively, compared to 73.2% and 26.8% in 2019[60]. - The group is actively negotiating with banks and creditors to advance debt restructuring plans[38]. - The company is actively negotiating with local governments and creditors to achieve a debt restructuring plan due to the transfer of most bank loans under a debt restructuring plan[173]. Market Conditions and Challenges - The company faced significant challenges due to the COVID-19 pandemic, impacting logistics and consumer demand[10]. - The anticipated corn deficit in China for 2021 is approximately 20 million tons, driven by increased consumption and reduced supply from major exporting countries[23]. - The outbreak of African swine fever has led to a reduction of at least 40% in China's pig population compared to pre-2018 levels, significantly impacting the feed market[25]. - The company anticipates continued challenges in 2021 due to high corn prices and the ongoing impact of COVID-19 on the global economy[29]. - The operational environment has been severely impacted by the COVID-19 pandemic, leading the company to streamline operations to ensure liquidity and closely monitor market changes[175]. Production and Operations - The company suspended all upstream product production starting from the second quarter of 2020 to reduce cash outflow due to high corn procurement costs and weak demand[14]. - The company has suspended production at several facilities to reduce cash outflows and ensure financial resources are sufficient until market conditions improve[22]. - The company will closely monitor market developments and assess the feasibility of resuming upstream corn processing and amino acid production in the third quarter of 2021[16]. - The company plans to upgrade production technology and product mix to address market changes due to aging production facilities[175]. - The company is focusing on research and development to diversify its product portfolio in response to the ongoing impact of African swine fever in China[175]. Corporate Governance - The management team emphasized the importance of maintaining high corporate governance standards to boost stakeholder confidence[92]. - The board of directors has adopted a diversity policy to ensure a balanced representation across various demographics[98]. - The company is committed to evaluating the independence of its non-executive directors annually to uphold governance standards[97]. - The board has established measurable diversity targets, including a specified percentage of female members and independent non-executive directors[102]. - The company has implemented measures to ensure the board receives all necessary information to effectively perform its duties[105]. - The audit committee's responsibilities include reviewing the company's annual and interim financial statements and ensuring compliance with accounting standards[136]. - The company has adopted a written policy for the nomination of new directors, considering factors such as time commitment and contribution to board diversity[139]. - The board has established various committees, including the audit committee, nomination committee, remuneration committee, and corporate governance committee, to ensure effective governance[132]. Employee Management - The company recognizes the importance of human resources management as a source of competitive advantage and emphasizes employee training and performance evaluation[79]. - As of December 31, 2020, the company employed approximately 4,000 full-time employees, a decrease from 4,300 in 2019[79]. Environmental and Risk Management - The company aims to provide stable and sustainable returns to shareholders through a progressive dividend policy[160]. - The company is committed to minimizing environmental impacts and ensuring public safety and health as part of its risk management strategy[171]. - The company has established a strong and independent review and inquiry process to enhance its strategic and operational effectiveness[171]. - The internal audit department reviewed the effectiveness of the company's risk management and internal control systems, identifying weaknesses and suggesting improvements[175].
大成生化科技(00809) - 2020 - 年度财报