Financial Performance - For the six months ended September 30, 2024, the company reported a net loss attributable to owners of approximately HKD 24.4 million, compared to a net loss of approximately HKD 3.8 million for the same period in 2023[12]. - Revenue decreased by approximately HKD 107.2 million or 34.3% to about HKD 205.7 million, down from approximately HKD 312.9 million for the six months ended September 30, 2023[12]. - The company recorded a loss before tax of approximately HKD 25,500,000, an increase of about HKD 23,000,000 compared to the same period last year, attributed to a significant decrease in revenue from the concrete business and rising raw material costs[21]. - The company reported a total comprehensive loss attributable to owners of approximately HKD 6,500,000 for the interim period, compared to a total comprehensive loss of about HKD 23,000,000 for the same period last year[23]. - The company reported a total comprehensive loss of HKD 22,987,000 for the six months ended September 30, 2023, which included foreign exchange differences of HKD 19,211,000[77]. Revenue Breakdown - Revenue from the concrete business accounted for approximately 97.2% of total revenue, with a decline of about 33.8% from approximately HKD 302.2 million to about HKD 200 million due to weak demand in China[12]. - The lending business revenue decreased by approximately HKD 5 million or 46.8% to about HKD 5.7 million, attributed to a reduction in the average total loan portfolio from approximately HKD 212.8 million to about HKD 149.7 million[14]. - Revenue from concrete business decreased to HKD 199,962 thousand for the six months ended September 30, 2024, down 33.8% from HKD 302,187 thousand in the same period of 2023[93]. - Total revenue for the group was HKD 205,654 thousand, a decline of 34.3% compared to HKD 312,883 thousand in the previous year[93]. Cost and Expenses - Cost of sales decreased by approximately HKD 58.2 million or 26.4% to about HKD 162.5 million, primarily due to reduced demand for concrete products[14]. - Gross profit fell by approximately HKD 49 million or 53.2% to about HKD 43.2 million, with the gross profit margin for the concrete business dropping from approximately 27.0% to about 18.7%[15]. - The overall gross profit margin decreased from 29.5% to 21.0% due to lower sales volumes and increased material costs[15]. - Selling and distribution expenses decreased significantly by approximately HKD 6,600,000 or 24.1%, mainly due to a decline in sales leading to lower transportation costs[19]. - Administrative expenses decreased by approximately HKD 4,200,000 or 15.6% to about HKD 22,800,000, primarily due to a reduction in employee costs and headcount[20]. Financial Position - As of September 30, 2024, the company had total debt of approximately HKD 325,500,000 and cash and cash equivalents of about HKD 140,500,000[24]. - The current ratio as of September 30, 2024, was 2.7, indicating sufficient financial resources[24]. - The company's equity amounted to approximately HKD 953,900,000 as of September 30, 2024, showing a slight decrease from HKD 960,400,000 as of March 31, 2024[25]. - The company’s total assets decreased to HKD 1,103,403,000 from HKD 1,171,255,000, indicating a reduction in overall asset base[68]. - The company’s equity attributable to owners was HKD 953,927,000, down from HKD 960,397,000 as of March 31, 2024[68]. Operational Challenges - The company is facing challenges due to a sluggish real estate market in China, impacting construction progress and concrete demand[12]. - The company has implemented measures to reduce operating expenses, but these have only partially mitigated the negative impact of weak demand[16]. - The lending business is expected to continue shrinking due to strict regulatory oversight and declining credit quality, with a cautious approach to credit control being maintained[49]. Employee and Management - As of September 30, 2024, the group employed a total of 173 staff, down from 190 as of September 30, 2023, with employee costs around HKD 13,700,000[41]. - The company’s management compensation for the six months ending September 30, 2024, totaled 1,077,000 HKD, a decrease of approximately 78.7% compared to 5,067,000 HKD for the same period in 2023[180]. Investments and Acquisitions - The acquisition of Wisdom Moon (BVI) Limited was completed on November 19, 2024, for a total consideration of HKD 45,000,000, representing 4.52% of the issued A shares[45][46]. - After the acquisition, the company will hold an indirect interest of 17.92% in Wisdom Moon's issued A shares, as it already owned 13.40% prior to the acquisition[45]. - The group has recognized a right-of-use asset addition of approximately HKD 1,184,000 for the lease renewal of the Hong Kong office during the interim period, compared to HKD 2,777,000 for the six months ended September 30, 2023[125]. Debt and Financing - The group’s total borrowings amount to HKD 148,534,000 as of September 30, 2024, a decrease from HKD 153,117,000 as of March 31, 2024[166]. - The group issued bonds totaling HKD 176,983,000 as of September 30, 2024, compared to HKD 175,508,000 as of March 31, 2024[169]. - The company has issued a total of 63,000,000 HKD in six-year corporate bonds with an interest rate of 3.5% for the first two years, 7.0% for the next two years, and 10.5% until maturity[173]. Impairment and Asset Quality - The group experienced a total impairment loss of HKD 14,444,000 for the six months ended September 30, 2024, down from HKD 31,862,000 in 2023, indicating an improvement in asset quality[110]. - The group has determined that there was no impairment for the other intangible assets and goodwill related to the concrete business cash-generating unit during the interim period[137]. Future Outlook - The concrete business remains the main revenue driver for the company, despite challenges in the real estate market, with a focus on opportunities in Hainan Province[48]. - The company plans to strictly adhere to cost control policies to maintain profitability and market competitiveness amid rising raw material and labor costs[46]. - The company will regularly review its business strategies to adapt to economic uncertainties and challenges[46].
华盛国际控股(01323) - 2025 - 中期财报