永旺(00984) - 2024 - 中期财报

Financial Statements Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group's revenue decreased by 10.4% year-on-year to HK$4.05 billion, primarily due to weak performance in Hong Kong and mainland China, while the loss for the period significantly expanded to HK$174 million from HK$76.55 million in the prior year, with loss per share increasing from 30.07 HK cents to 65.84 HK cents Key Data from Consolidated Statement of Profit or Loss | Metric | 2024 H1 (Unaudited) HK$ Thousand | 2023 H1 (Unaudited) HK$ Thousand | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 4,052,133 | 4,521,844 | -10.4% | | Loss Before Tax | (173,440) | (75,520) | +129.7% | | Loss for the Period | (174,188) | (76,553) | +127.5% | | Loss Attributable to Owners of the Company | (171,176) | (78,194) | +119.0% | | Loss Per Share (Basic and Diluted) HK Cents | (65.84) | (30.07) | +118.9% | Consolidated Statement of Profit or Loss and Other Comprehensive Income Total comprehensive expenses for the period significantly increased to HK$182 million from HK$75.65 million in the prior year, primarily due to the expanded loss for the period and fair value losses on equity securities - Total comprehensive expenses for the period were HK$182 million, compared to HK$75.65 million in the prior year, primarily due to the expanded loss for the period and changes in the fair value of equity securities[5] Consolidated Statement of Financial Position As of June 30, 2024, the Group's financial position showed net liabilities expanding to HK$267 million from HK$94.43 million at the end of 2023, with net current liabilities also increasing from HK$684 million to HK$1.025 billion, primarily due to increased lease liabilities Summary of Consolidated Statement of Financial Position | Metric | June 30, 2024 (Unaudited) HK$ Thousand | December 31, 2023 (Audited) HK$ Thousand | | :--- | :--- | :--- | | Non-current Assets | 3,779,755 | 3,213,060 | | Current Assets | 1,956,933 | 2,365,946 | | Current Liabilities | 2,981,644 | 3,049,656 | | Net Current Liabilities | (1,024,711) | (683,710) | | Non-current Liabilities | 3,022,535 | 2,623,777 | | Net Liabilities | (267,491) | (94,427) | Consolidated Statement of Changes in Equity As of June 30, 2024, equity attributable to owners of the Company further decreased to -HK$368 million from -HK$198 million at the end of 2023, primarily due to a loss of HK$171 million for the period, with total equity (total deficit) also expanding from -HK$94 million to -HK$267 million - Equity attributable to owners of the Company decreased from -HK$198 million at the end of 2023 to -HK$368 million, primarily due to a loss of HK$171 million recorded for the period[10] Condensed Consolidated Statement of Cash Flows In the first half of 2024, net cash generated from operating activities significantly decreased to HK$276 million from HK$521 million in the prior year, with cash outflow from financing activities of HK$469 million primarily for lease liability repayments, and cash and cash equivalents at period-end decreasing to HK$612 million Summary of Cash Flow Statement | Metric | 2024 H1 (Unaudited) HK$ Thousand | 2023 H1 (Unaudited) HK$ Thousand | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 276,058 | 520,970 | | Net Cash Used in Investing Activities | 17,043 | (185,344) | | Cash Used in Financing Activities | (469,373) | (520,574) | | Net Decrease in Cash and Cash Equivalents | (176,272) | (184,949) | | Cash and Cash Equivalents at End of Period | 611,541 | 952,160 | Notes to the Financial Report Basis of Preparation and Going Concern This interim financial report is prepared in accordance with HKAS 34, and despite net current liabilities of HK$1.025 billion as of June 30, 2024, the directors deem the going concern basis appropriate due to the financial support commitment from the ultimate holding company, AEON Co., Ltd - The Group's ability to continue as a going concern, with current liabilities exceeding current assets by HK$1.025 billion as of June 30, 2024, relies on the financial support from its ultimate holding company, AEON Co., Ltd[17] Revenue and Segment Information The Group's total revenue by region showed declines in both Hong Kong and mainland China, with segment losses expanding to HK$144 million from HK$71.62 million in Hong Kong and to HK$36.97 million from HK$15.44 million in mainland China, reflecting challenges in both markets Revenue and Results by Geographical Segment | Region | Revenue (2024 H1) HK$ Thousand | Revenue (2023 H1) HK$ Thousand | Segment Loss (2024 H1) HK$ Thousand | Segment Loss (2023 H1) HK$ Thousand | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 1,897,425 | 2,102,228 | (144,259) | (71,620) | | Mainland China | 2,154,708 | 2,419,616 | (36,971) | (15,437) | | Total | 4,052,133 | 4,521,844 | (181,230) | (87,057) | Dividends Given the Group's financial performance, the Board resolved not to declare an interim dividend for the six months ended June 30, 2024, compared to an interim dividend of 2.0 HK cents per share declared in the prior year - The Board resolved not to declare an interim dividend for 2024, whereas an interim dividend of 2.0 HK cents per share was declared for the corresponding period in 2023[37] Changes in Assets and Impairment Assessment During the period, the Group recognized HK$787 million in additional right-of-use assets and HK$827 million in lease liabilities due to new and revised store lease agreements, and management concluded no impairment losses were required for property, plant and equipment or right-of-use assets after assessment - New right-of-use assets of HK$787 million and lease liabilities of HK$827 million were added during the period[40] - Following impairment assessments, no impairment losses were recognized for property, plant and equipment or right-of-use assets during the period[41] Related Party Transactions During the interim period, the Group engaged in various related party transactions, primarily involving payments to fellow subsidiaries for commissions, trademark fees, and service fees, as well as patent expenditures to the ultimate holding company, all as part of the Group's ordinary course of business - Key related party transactions included payments to fellow subsidiaries of HK$55.21 million for service fees and HK$12.23 million for commissions, and patent expenditures of HK$11.18 million to the ultimate holding company[56] Management Discussion and Analysis Business Review In the first half of 2024, the Group's profitability was unsatisfactory due to slow economic recovery and weak consumer confidence in Hong Kong and mainland China, impacted by high interest rates and geopolitical risks, prompting the Group to actively adjust its operating strategies to address market challenges - Facing macroeconomic uncertainties and declining consumer sentiment, the Group's operations in both Hong Kong and mainland China encountered challenges, resulting in unsatisfactory financial performance[63] Hong Kong Operations Hong Kong operations were severely impacted by cross-border travel and outbound tourism, leading to a weak local retail market, with revenue declining 9.74% year-on-year to HK$1.90 billion and losses expanding to HK$144 million, prompting the Group to respond by increasing private labels, promoting events, expanding F&B, and advancing e-commerce, with AEON App-related revenue nearly tripling Hong Kong Operations Performance | Metric | 2024 H1 HK$ Million | 2023 H1 HK$ Million | | :--- | :--- | :--- | | Revenue | 1,897.4 | 2,102.2 | | Loss | (144.3) | (71.6) | - Response strategies include increasing the proportion of private labels, expanding the range of imported goods, developing F&B businesses (e.g., KOMEDA'S Coffee), upgrading the Tsuen Wan store, and advancing e-commerce development[64][65] Mainland China Operations Mainland China operations saw revenue decline 10.95% year-on-year to HK$2.15 billion and losses expand to HK$36.9 million, impacted by a sluggish property market and weak consumption, prompting the Group to strengthen product differentiation, optimize store layouts, and sign new stores to capitalize on Greater Bay Area opportunities and cross-border consumption trends Mainland China Operations Performance | Metric | 2024 H1 HK$ Million | 2023 H1 HK$ Million | | :--- | :--- | :--- | | Revenue | 2,154.7 | 2,419.6 | | Loss | (36.9) | (15.4) | - Strategic priorities include increasing private label sales, optimizing store layouts (e.g., Guangzhou Sun City store renovation), and signing new stores (Guangzhou Tower Plaza store, Guangzhou Baixin store) to expand presence in the Greater Bay Area[67] Outlook Looking ahead, the Group anticipates Hong Kong's retail sector to benefit from government-promoted 'mega event economy' despite short-term challenges, while mainland China's economy is expected to improve with government stimulus, and the Group will continue to adapt and expand through strategies like enhancing private labels, optimizing store networks, expanding F&B, and digital transformation Hong Kong Operations Outlook The Group plans to address Hong Kong's slow recovery with three key strategies: increasing private label sales for better gross margins, optimizing the store network to strengthen high-profit small specialty stores, and expanding its F&B business, while also continuing digital transformation to enhance customer experience and operational efficiency, with several new stores planned for the second half - Plans for the second half include opening one AEON STYLE, one Mono Mono, one KOMEDA'S Coffee, one JELYCO-do By KOMEDA, and several Daiso Japan stores[68] Mainland China Operations Outlook For the mainland China market, the Group will actively seize cross-border opportunities by accelerating product reform, expanding differentiation, and increasing private label sales to enhance appeal and profitability, while also strictly controlling costs and streamlining internal processes, with plans to open two AEON supermarkets in the Greater Bay Area in the second half - Plans for the second half include completing one store upgrade and opening two new AEON supermarkets in the Greater Bay Area[69] Group Outlook The Group anticipates total capital expenditure of approximately HK$95.7 million in the second half of 2024, primarily allocated to opening new stores, renovating existing stores, and upgrading information technology systems - Total capital expenditure for the second half is estimated to be approximately HK$95.7 million[70] Financial Review In the first half of 2024, the Group's revenue decreased by 10.4% year-on-year, with gross profit margin slightly declining to 28.4%, and loss attributable to owners of the Company expanding to HK$171 million due to lower revenue and increased expenses as a percentage of revenue, while adjusted EBITDA was a loss of HK$146 million, and the Group maintained a net cash position despite a decrease in cash levels Key Financial Metrics | Metric | 2024 H1 HK$ Million | 2023 H1 HK$ Million | | :--- | :--- | :--- | | Revenue | 4,052.1 | 4,521.8 | | Gross Profit Margin | 28.4% | 28.8% | | Loss Attributable to Owners | (171.1) | (78.2) | | Adjusted EBITDA | (145.8) | (55.2) | - The Group maintained a net cash position as of June 30, 2024, with cash and bank balances and short-term deposits totaling HK$931 million, a decrease from HK$1.15 billion at the end of 2023[73] Other Disclosures Human Resources As of June 30, 2024, the Group employed approximately 5,050 full-time and 3,920 part-time staff across Hong Kong and China, committed to providing education and career development opportunities to enhance service quality - As of June 30, 2024, the Group had approximately 5,050 full-time and 3,920 part-time employees[74] Directors' and Major Shareholders' Interests The report discloses directors' shareholdings in the Company and its ultimate holding company, AEON Co., Ltd., with AEON Co., Ltd. holding 60.59% of the Company's shares as the controlling shareholder - Major shareholder AEON Co., Ltd. holds 157,536,000 shares, representing 60.59% of the total issued shares of the Company[78] Corporate Governance The Company consistently complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the reporting period, and the Audit Committee has reviewed these interim results - The Company confirmed compliance with the Corporate Governance Code and the Model Code for Securities Transactions by Directors throughout the six months ended June 30, 2024[81]