Financial Performance - Revenue decreased by approximately HKD 86.0 million or 56.0% to about HKD 67.7 million for the year ended December 31, 2024, compared to approximately HKD 153.7 million in the previous year[13]. - Gross profit fell from HKD 55.5 million to HKD 23.5 million, with the gross margin slightly declining from 36.1% to 34.7%[14]. - The group reported a loss of HKD 13.0 million for the year, compared to a profit of HKD 7.3 million in the previous year, mainly due to a decline in gross profit of HKD 32.0 million[22]. - Basic and diluted loss per share for 2024 was HKD (2.14), compared to earnings of HKD 1.15 per share in 2023[124]. - Total revenue for 2024 was HKD 67,711,000, a decrease of 56.0% compared to HKD 153,748,000 in 2023[124]. - Gross profit for 2024 was HKD 23,466,000, down 57.8% from HKD 55,457,000 in 2023[124]. - Operating loss for 2024 was HKD 11,528,000, compared to an operating profit of HKD 12,151,000 in 2023[124]. - The company reported a foreign exchange loss of HKD 4,662,000 in 2024, compared to a loss of HKD 1,909,000 in 2023[124]. Cost Management - The sales cost decreased by about HKD 54.0 million or 55.0%, aligning closely with the revenue decline[14]. - Sales expenses decreased by approximately HKD 9.7 million to HKD 4.0 million due to a decline in sales in overseas markets, leading to lower freight and transportation costs[16]. - The total employee costs for the year amounted to approximately HKD 15.0 million, slightly down from HKD 15.1 million in the previous year, with a stable workforce of 41 employees[34]. Market and Business Strategy - The foundation business segment's performance remained relatively weak due to the uncertain real estate market, contributing to the overall revenue decline[10]. - The company is focusing on expanding its tunnel business segment by developing engineering solutions for tunnel boring machines in collaboration with major suppliers in Europe and China[6]. - The company anticipates improved performance in overseas markets, particularly in Australia and continental Europe, in the coming year[12]. - The company is adopting a cautious approach in the Chinese market, focusing on managing receivables and operational capital[11]. - The company plans to closely monitor potential opportunities related to the "Railway Development Strategy" and "Northern Metropolis" development in Hong Kong[10]. - The company expects overall performance in 2025 to improve compared to the current year, driven by new projects and overseas demand[6]. Risk Management - The company faces several risks, including competition for new contracts and reliance on a limited number of suppliers[37]. - Demand for the company's services may be adversely affected by a slowdown in the tunneling and foundation industries in Hong Kong, China, Singapore, and Australia[38]. - The company is actively monitoring credit risks associated with its customers[38]. - The management is committed to risk assessment and control, ensuring that acceptable risks are identified and managed effectively[37]. - The company has established emergency plans to address potential loss situations[37]. Corporate Governance - The company has adopted the Corporate Governance Code as per the GEM Listing Rules and has complied with it throughout the year ending December 31, 2024, with some exceptions noted[50]. - The board consists of seven members, including three executive directors and four independent non-executive directors, responsible for overall strategy and policy formulation[54]. - The company has implemented a board diversity policy to enhance gender balance, aiming to gradually improve gender diversity among board members[52]. - The company encourages continuous professional development for all directors to ensure informed decision-making[55]. - The company has established a director liability insurance policy for its board members[105]. Financial Position - As of December 31, 2024, the current ratio improved to 2.46 from 2.05 in the previous year, with current assets amounting to HKD 147.9 million and current liabilities at HKD 60.2 million[24]. - The net capital debt ratio as of December 31, 2024, was 1.7%, down from 4.7% in the previous year, with total debts of HKD 1.6 million against equity of HKD 99.0 million[27]. - The group generated cash flow from operating activities of approximately HKD 6.2 million, resulting in a decrease in financial expenses to approximately HKD 2.1 million, a reduction of HKD 0.9 million from the previous year[20]. - The company reported a reserve of approximately HKD 81.8 million available for distribution as of December 31, 2024[84]. - The board does not recommend the payment of a final dividend for the year ending December 31, 2024[79]. Audit and Compliance - The independent auditor, BDO Limited, has audited the financial statements for the year ending December 31, 2024, confirming they present a true and fair view[110]. - The audit committee reviewed the financial statements and reports for the year ending December 31, 2024, ensuring their completeness and compliance with accounting standards[61]. - The company incurred an audit fee of HKD 650,000 for audit services and HKD 83,000 for non-audit services, totaling HKD 733,000 for the year ending December 31, 2024[68]. - The board believes that the risk management and internal control systems are effective and sufficient, although they are designed to manage rather than eliminate risks[67]. Accounting Policies - The company is currently evaluating the impact of new accounting standards that will take effect in future periods, which may affect financial reporting[140]. - The company adopted accounting policies in accordance with Hong Kong Financial Reporting Standards No. 9 and No. 7 (revised), clarifying the derecognition of financial assets and liabilities, which is not expected to have a significant impact on the financial statements[141]. - The group recognizes expected credit losses for trade receivables and other financial assets based on a simplified approach, calculating expected credit losses over the entire period[154]. - The group measures inventory at the lower of cost and net realizable value, using the FIFO method for cost determination[166]. - The group recognizes deferred tax liabilities based on taxable temporary differences arising from investments in subsidiaries, with a focus on controlling the timing of reversals[173].
明梁控股(08152) - 2024 - 年度财报