Financial Performance - Revenue for the six months ended June 30, 2025, was HK$452,723,000, a decrease of 1.7% from HK$458,517,000 in the same period of 2024[11]. - Gross profit for the same period was HK$254,621,000, down 8.1% from HK$277,146,000 year-on-year[11]. - Loss for the period attributable to owners of the company was HK$282,484,000, compared to a profit of HK$4,745,000 in the prior year[12]. - Total comprehensive expense for the period was HK$340,955,000, significantly higher than HK$1,215,000 in the previous year[12]. - Basic loss per share for the period was HK$5.06, compared to earnings of HK$0.09 per share in the prior year[12]. - The company reported a loss for the period of HK$282,484,000 for the six months ended June 30, 2025[17]. - The Group recorded a net loss of approximately HK$321.4 million for the six months ended June 30, 2025, a significant increase from a net loss of approximately HK$4.5 million in 2024[157]. Asset and Equity Changes - As of June 30, 2025, non-current assets decreased to HK$730,458,000 from HK$1,030,423,000 as of December 31, 2024, representing a decline of approximately 29.1%[14]. - Current assets totaled HK$422,582,000, down from HK$557,009,000 at the end of 2024, indicating a decrease of about 24.1%[15]. - Total equity attributable to owners decreased to HK$684,994,000 from HK$978,701,000, reflecting a decline of approximately 30.0%[15]. - Total segment assets as of June 30, 2025, were HK$1,133,923,000, a decrease from HK$1,524,600,000 as of December 31, 2024[44]. Impairment and Losses - Impairment losses recognized under the expected credit loss model amounted to HK$159,035,000, compared to HK$25,466,000 in the same period last year[11]. - Impairment loss on intangible assets increased to HK$123,873,000 in 2025 from HK$13,559,000 in 2024, reflecting a substantial rise[51]. - The Group recognized impairment losses of HK$161,282,000 on amounts due from an associate in 2025, compared to HK$22,565,000 in 2024, indicating a significant increase in credit risk[53]. - The impairment loss on goodwill was recorded at HK$88,417,000, reflecting a significant reduction from the carrying amount of HK$253,418,000 at the beginning of the year[75]. Cash Flow and Financing Activities - Net cash generated from operating activities for the six months ended June 30, 2025, was HK$53,014,000, compared to HK$50,434,000 for the same period in 2024, reflecting an increase of 3.1%[18]. - Net cash used in financing activities totaled HK$46,693,000, slightly down from HK$47,628,000 in the previous year, indicating a decrease of 2.0%[20]. - Cash and cash equivalents at the end of the period increased to HK$78,328,000 from HK$68,663,000, representing a growth of 14.4%[20]. - The Group's bank borrowings stood at HK$82,081,000 as of 30 June 2025, a decrease from HK$85,524,000 as of 31 December 2024[104]. Segment Performance - Pharmaceutical business revenue was HK$344,769,000, slightly down from HK$345,390,000, while fitness business revenue decreased to HK$107,954,000 from HK$113,127,000[37]. - The segment results for the pharmaceutical business showed a profit of HK$20,420,000, down from HK$60,478,000, while the fitness business reported a loss of HK$338,711,000 compared to a loss of HK$38,544,000 in the previous year[37]. - The decline in the fitness business was attributed to slower-than-expected recovery and operational difficulties faced by franchise operators in Taiwan[167]. Marketing and Strategic Initiatives - Increased marketing investment in the pharmaceutical segment led to higher distribution and selling expenses, impacting profitability[163]. - The Group plans to enhance marketing efficiency and intensify product research and development efforts in response to market competition[165]. - The Group's fitness business will strengthen digital marketing efforts to enhance brand image and customer acquisition[197]. - A series of initiatives will be launched, including more diverse membership packages and expanded private training courses, to enhance customer acquisition capabilities[197]. Legal Proceedings and Contingent Liabilities - As of June 30, 2025, the Group has contingent liabilities related to the 2019 Legal Proceedings and 2021 Legal Proceedings, with no material progress made during the interim period[128]. - The Group has been defending claims from Active Gains and Mr. PJW regarding a profit guarantee shortfall for the financial years 2017 and 2018, with 10,000 shares in True Cayman transferred to settle part of the amounts due[129]. - The 2019 Legal Proceedings involve a writ of summons regarding the acquisition of a 51% equity interest in TFKT True Holdings, with no trial date set as of the report date[130]. Employee and Compensation Information - Key management personnel compensation totaled HK$1,884,000 for the six months ended June 30, 2025, compared to HK$2,395,000 in the previous year[112]. - The Group had 655 employees, a decrease from 688 employees as of 31 December 2024[190]. - The share incentive plan aims to motivate selected employees and attract talent for the Group's growth and development[200].
华控康泰(01312) - 2025 - 中期财报