Company Information Company Information (No summary provided for this top-level section) Management Discussion and Analysis Company Overview The Group is a leading civil engineering and high-voltage substation construction enterprise in Macau, with a broad business scope covering four core areas: construction and decoration, high-voltage substation construction, E&M engineering services, and facility management, while also expanding into EV-related services and steel structure business - The Group's core businesses include construction and decoration, high-voltage substation construction, E&M engineering, and facility management services14 - The Group also engages in electric vehicle-related services, including charging services, EV distribution, system design and production, and battery pack manufacturing15 - The steel structure business, as an upstream industry extension, primarily supplies steel materials such as rebar and sheet piles15 Business Review In H1 2024, despite Macau's tourism recovery, total revenue decreased by 6.7% to MOP 746 million due to fewer large construction projects, while steel structure business grew to MOP 555 million, becoming the primary revenue source, though overall gross profit margin declined from 13.3% to 6.4% - As of June 30, 2024, the Group's outstanding construction and decoration engineering contracts were valued at MOP 710 million, and steel trading contracts at MOP 530 million17 Steel Structure Business During the period, the Group's Jiangmen production plant commenced operations, focusing on steel structure components and new building materials, securing 116,187 tons of orders and delivering 108,842 tons of steel materials, contributing MOP 555 million in revenue - The Jiangmen production plant officially commenced operations in early 2024, focusing on developing new materials and equipment for new energy businesses18 - During the period, approximately 116,187 tons of order contracts were secured, and approximately 108,842 tons of steel materials were delivered, contributing MOP 555 million in revenue18 Construction Business The Group secured new construction, E&M, and facility management projects totaling approximately MOP 250 million in new contracts and renewed several facility management agreements, anticipating growth opportunities from Macau's gaming operators' increased investment in non-gaming projects - New project contracts totaling approximately MOP 250 million were secured during the period, and multiple facility management service agreements were successfully renewed19 - The six major gaming operators are expected to increase investment in non-gaming projects, benefiting the Group's construction business19 Electric Vehicle Business The Group's EV business has completed charging system installations and commenced fee collection at multiple gaming operators' hotels and residential commercial buildings, generating stable revenue and diversifying the EV business income - Charging systems at multiple gaming operator hotels and residential commercial buildings, including City of Dreams, Venetian, and Grand Lisboa Palace, have commenced fee collection, generating stable revenue20 Financial Review In H1 2024, total revenue decreased by 6.7% to MOP 746 million, and gross profit fell 55.3% to MOP 47.5 million, with gross margin dropping from 13.3% to 6.4%, primarily due to declines in construction and steel structure margins, increased administrative expenses, and higher finance costs, resulting in a 79.1% profit reduction to MOP 7.98 million Revenue Total revenue in H1 2024 decreased by 6.7% to MOP 746 million, with construction business revenue declining 27.8% to MOP 190 million due to fewer large projects, while steel structure business revenue grew 3.5% to MOP 555 million, increasing its share of total revenue to 74.4% Revenue Breakdown by Business Segment (For the six months ended June 30) | Business Segment | 2024 Revenue (MOP Thousands) | Share (%) | 2023 Revenue (MOP Thousands) | Share (%) | | :--- | :--- | :--- | :--- | :--- | | Construction Business | 189,846 | 25.4 | 262,921 | 32.9 | | Electric Vehicle Business | 1,452 | 0.2 | 1,186 | 0.1 | | Steel Structure Business | 554,866 | 74.4 | 536,036 | 67.0 | | Total | 746,164 | 100.0 | 800,143 | 100.0 | Gross Profit The Group's overall gross profit significantly decreased by 55.3% to MOP 47.5 million, with gross margin falling from 13.3% to 6.4%, driven by a 68.9% decline in construction business gross profit, including a gross loss in construction and decoration, and a drop in steel structure business gross margin from 9.1% to 5.4% due to lower rebar prices Gross Profit and Gross Margin Breakdown by Business Segment (For the six months ended June 30) | Business Segment | 2024 Gross Profit/(Loss) (MOP Thousands) | Gross Margin (%) | 2023 Gross Profit/(Loss) (MOP Thousands) | Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Construction Business | 18,342 | 9.7 | 58,950 | 22.4 | | Electric Vehicle Business | (1,008) | (69.4) | (1,396) | (117.7) | | Steel Structure Business | 30,143 | 5.4 | 48,677 | 9.1 | | Total | 47,477 | 6.4 | 106,231 | 13.3 | - The decline in construction business gross margin was primarily due to pricing strategy adjustments, increased competition, and higher costs from inflation24 Changes in Other Financial Indicators During the period, other income and losses increased by MOP 4.5 million due to exchange gains, administrative expenses rose 40.0% to MOP 35.1 million due to new production facilities, finance costs also increased, and income tax expense significantly decreased by 84.9% due to lower gross profit - Administrative expenses increased by MOP 10 million (+40.0%), primarily due to additional salaries and promotion costs from the commencement of operations at the China production facility29 - Finance costs increased to MOP 5.4 million, mainly due to an increase in bank borrowings during the period30 - Profit for the period decreased by MOP 30.2 million (-79.1%), with net profit margin falling from 4.8% to 1.1%31 Liquidity and Financial Resources The Group maintains prudent cash management, with net current assets of MOP 285 million and a current ratio of 1.5 times at period-end, both improved from end-2023, while cash and bank balances increased to MOP 94.4 million, and the debt-to-equity ratio slightly rose to 57.6% Key Liquidity Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net Current Assets | MOP 285 million | MOP 255 million | | Current Ratio | 1.5 times | 1.4 times | | Cash and Bank Balances | MOP 94.4 million | MOP 57.6 million | | Bank Borrowings | MOP 277 million | MOP 267 million | | Capital Gearing Ratio | 57.6% | 55.7% | Use of Net Proceeds from Global Offering The company listed in 2018, raising approximately HKD 262 million in net proceeds from its global offering, with most funds utilized as planned by June 30, 2024, for performance bonds, storage facilities, staff recruitment, machinery purchases, new project pre-costs, and general working capital, leaving only HKD 1.1 million unutilized Use of Net Proceeds and Utilization (As of June 30, 2024) | Purpose | Revised Use (HKD Millions) | Actual Utilization (HKD Millions) | Unutilized Amount (HKD Millions) | | :--- | :--- | :--- | :--- | | Funding performance bonds | 112.4 | 112.4 | 1.1 | | Establishing storage facilities | 44.3 | 44.3 | – | | Recruiting additional staff | 45.2 | 45.2 | – | | Purchasing additional machinery | 16.8 | 16.8 | – | | Funding pre-costs for new projects | 16.7 | 16.7 | – | | General working capital | 26.2 | 26.2 | – | | Total | 261.6 | 261.6 | 1.1 | Outlook For H2 2024, the Group is optimistic, anticipating increased demand for facility renovation from Macau's gaming operators and continued government investment in infrastructure and public housing to drive stable growth in the construction business, while the steel structure business will expand into Hong Kong and Southeast Asia, and the EV business will focus on charging station operations at gaming and resort properties to enhance gross profit - Construction Business: Anticipated growth drivers include gaming operators' facility renovations and government infrastructure projects42 - Steel Structure Business: Accelerated expansion into Hong Kong and Southeast Asian markets, alongside the growth of prefabrication processing business42 - Electric Vehicle Business: Expansion of hourly charging pile fee-based operations at gaming and resort properties to enhance gross profit42 Review Report on Condensed Consolidated Financial Statements Review Report on Condensed Consolidated Financial Statements (No summary provided for this top-level section) Conclusion of Review Report Deloitte Touche Tohmatsu, the auditor, reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2024, in accordance with Hong Kong Standard on Review Engagements, concluding that nothing came to their attention to suggest the statements were not prepared in all material respects in accordance with International Accounting Standard 34, Interim Financial Reporting - Auditor's Conclusion: Nothing came to attention to suggest the condensed consolidated financial statements were not prepared in all material respects in accordance with International Accounting Standard 3445 Condensed Consolidated Financial Statements Condensed Consolidated Financial Statements (No summary provided for this top-level section) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group reported revenue of MOP 746 million, a 6.7% decrease year-on-year, with gross profit at MOP 47.48 million, down 55.3%, and profit for the period significantly reduced by 79.1% to MOP 7.98 million, resulting in basic earnings per share of MOP 0.17 cents Key Profit or Loss Data for H1 2024 (For the six months ended June 30) | Indicator | 2024 (MOP Thousands) | 2023 (MOP Thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 746,164 | 800,143 | -6.7% | | Gross Profit | 47,477 | 106,231 | -55.3% | | Profit before tax | 9,598 | 48,904 | -80.4% | | Profit for the period | 7,982 | 38,181 | -79.1% | | Profit attributable to owners of the Company | 6,949 | 32,242 | -78.4% | | Basic earnings per share (MOP Cents) | 0.17 | 0.81 | -79.0% | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were MOP 1.141 billion, total liabilities were MOP 660 million, and net assets were MOP 482 million, a slight increase from MOP 480 million at end-2023, with net current assets rising from MOP 255 million to MOP 285 million Key Financial Position Data | Indicator | June 30, 2024 (MOP Thousands) | December 31, 2023 (MOP Thousands) | | :--- | :--- | :--- | | Non-current assets | 282,632 | 256,915 | | Current assets | 858,726 | 831,377 | | Total assets | 1,141,358 | 1,088,292 | | Current liabilities | 573,365 | 576,106 | | Non-current liabilities | 86,433 | 32,221 | | Total liabilities | 659,798 | 608,327 | | Net assets | 481,560 | 479,965 | | Total equity | 481,560 | 479,965 | Condensed Consolidated Statement of Cash Flows In H1 2024, the Group generated a net cash inflow from operating activities of MOP 71.29 million, a significant improvement from a net outflow of MOP 129 million in the prior period, with net cash outflow from investing activities at MOP 33.73 million, net cash inflow from financing activities at MOP 2.85 million, and period-end cash and cash equivalents increasing to MOP 94.44 million Cash Flow Summary (For the six months ended June 30) | Indicator | 2024 (MOP Thousands) | 2023 (MOP Thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 71,289 | (128,954) | | Net cash used in investing activities | (33,729) | (50,777) | | Net cash generated from financing activities | 2,845 | 135,779 | | Net increase (decrease) in cash and cash equivalents | 40,405 | (43,952) | | Cash and cash equivalents at end of period | 94,443 | 31,732 | Notes to the Condensed Consolidated Financial Statements Notes to the Condensed Consolidated Financial Statements (No summary provided for this top-level section) 3. Revenue and Segment Information The Group's operations are divided into three segments: construction, electric vehicles, and steel structures, with the steel structure business contributing 74.4% of total revenue in H1 2024, while Macau remains the primary market, contributing 78.8% of revenue, and both China and Hong Kong markets saw increased revenue Revenue from External Customers by Geographical Location (For the six months ended June 30) | Region | 2024 Revenue (MOP Thousands) | 2023 Revenue (MOP Thousands) | | :--- | :--- | :--- | | Macau | 587,798 | 748,864 | | China | 60,692 | 44,944 | | Hong Kong | 81,187 | – | | Singapore | 1,986 | – | | Cyprus | 14,501 | 6,335 | | Total | 746,164 | 800,143 | 10. Earnings Per Share For the six months ended June 30, 2024, profit attributable to owners of the Company was MOP 6.95 million, resulting in basic and diluted earnings per share of MOP 0.17 cents, a significant decrease from MOP 0.81 cents in the prior period Earnings Per Share Calculation | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (MOP Thousands) | 6,949 | 32,242 | | Weighted average number of ordinary shares (Thousands) | 3,986,007 | 3,996,126 | | Basic and diluted earnings per share (MOP Cents) | 0.17 | 0.81 | 18. Bank Borrowings As of June 30, 2024, the Group's total bank borrowings increased to MOP 277 million from MOP 267 million at end-2023, with MOP 191 million due within one year as current liabilities, MOP 86.37 million as non-current liabilities, and secured borrowings totaling MOP 113 million Bank Borrowings Structure | Item | June 30, 2024 (MOP Thousands) | December 31, 2023 (MOP Thousands) | | :--- | :--- | :--- | | Repayable within one year | 190,854 | 235,146 | | Repayable after one year | 86,366 | 32,052 | | Total | 277,220 | 267,198 | | Secured | 113,432 | 72,614 | | Unsecured | 163,788 | 194,584 | 23. Dividends The Board did not declare an interim dividend for the six months ended June 30, 2024, consistent with the policy for the same period last year - The Board did not declare an interim dividend for the six months ended June 30, 202493 Other Information Other Information (No summary provided for this top-level section) Directors' and Chief Executives' Interests As of June 30, 2024, Executive Directors Mr. Kwok Lam Sik and Mr. Sou Kun Tou jointly held approximately 51.20% of the company's equity through their jointly controlled corporation, MECOM Holding Limited, while major shareholder Macau Rui Ying Investment Limited held approximately 13.56% - Mr. Kwok Lam Sik and Mr. Sou Kun Tou jointly held 2,040,800,000 shares, representing 51.20% of the issued share capital, through their controlled corporation, MECOM Holding Limited101102 - Major shareholder Macau Rui Ying Investment Limited held 540,617,500 shares, representing 13.56% of the issued share capital105106 Disclosure Requirements under Rule 13.21 of the Listing Rules Several financing agreements between the Group and Tai Fung Bank include a specific clause stating that if Mr. Kwok Lam Sik and Mr. Sou Kun Tou cease to be key management of the company, it constitutes an event of default, potentially triggering immediate repayment of all or part of the loans - Under financing agreements with Tai Fung Bank, the cessation of Mr. Kwok Lam Sik as Chairman and Mr. Sou Kun Tou as CEO from key management positions constitutes an event of default, potentially leading to immediate loan repayment demands111
澳能建设(01183) - 2024 - 中期财报