REGAL INT'L(HK:00078)2023-09-27 10:40Financial Performance - The company reported a significant increase in revenue for the first half of 2023, with total revenue reaching HKD 1.2 billion, representing a 15% year-over-year growth[4]. - Revenue for the six months ended June 30, 2023, was HKD 776.4 million, a decrease of 25.4% compared to HKD 1,039.9 million for the same period in 2022[55]. - Gross profit for the same period was HKD 234.9 million, down 62.2% from HKD 621.2 million year-over-year[55]. - The company reported a loss attributable to equity holders of HKD 762.6 million for the first half of 2023, compared to a profit of HKD 138.3 million in the same period of 2022[55]. - Total comprehensive loss for the six months ended June 30, 2023, was HKD 890.9 million, significantly higher than a loss of HKD 74.8 million in the prior year[56]. - Adjusted profit before tax for the group was a loss of HKD 833.2 million for the six months ended June 30, 2023, compared to a profit of HKD 136.6 million in the same period of 2022[68]. - The company reported a significant increase in financing costs, with interest-bearing bank borrowings rising to HKD 11,568.1 million from HKD 8,221.2 million[58]. - Interest expenses on bank loans surged to HKD 390.4 million for the six months ended June 30, 2023, compared to HKD 128.0 million in the same period of 2022, marking an increase of approximately 205%[77]. Market Outlook and Expansion - The company has provided an optimistic outlook for the second half of 2023, projecting a revenue growth of 10-12% driven by increased tourism and business travel[4]. - The company is actively pursuing market expansion in mainland China, targeting a 25% increase in hotel locations by the end of 2024[4]. - The company is focusing on market expansion, particularly in the Asia-Pacific region, aiming for a 20% increase in market share by the end of 2024[11]. - The company plans to continue exploring market expansion opportunities and new product development in the upcoming quarters[60]. - The Hong Kong Tourism Board forecasts that the total number of visitors to Hong Kong in 2023 will increase to 30 million, providing a positive impetus for the hotel industry[22]. Operational Efficiency and Technology - The company has invested HKD 50 million in technology upgrades to improve operational efficiency and customer experience across its properties[4]. - The management team emphasized a focus on sustainability initiatives, aiming to reduce operational costs by 15% through energy-efficient practices by 2025[4]. - The company is enhancing its operational efficiency, aiming for a 5% reduction in operational costs through process optimization[12]. Acquisitions and Investments - A strategic acquisition of a boutique hotel chain is in progress, which is anticipated to add approximately HKD 300 million in annual revenue once integrated[4]. - The company plans to pursue strategic acquisitions to enhance its portfolio, targeting a 10% increase in revenue from these acquisitions within the next fiscal year[10]. - The company is investing in new product development, with a budget allocation of $50 million for R&D in innovative technologies[12]. Shareholder Returns and Dividends - The board of directors remains committed to shareholder returns, with a proposed dividend increase of 5% for the upcoming fiscal year[4]. - The group has not declared an interim dividend for the fiscal year ending December 31, 2023[53]. - The company did not declare or pay any dividends during the six months ended June 30, 2023, consistent with the previous year[79]. Customer Engagement and User Data - User data showed a 20% increase in hotel occupancy rates compared to the same period last year, indicating strong demand recovery post-pandemic[4]. - The company reported a significant increase in user data, with a growth rate of 15% year-over-year in customer engagement metrics[10]. Financial Position and Assets - As of June 30, 2023, the group's cash and bank deposits amounted to HKD 1,653.1 million, a decrease from HKD 1,744.5 million as of December 31, 2022[50]. - The company's net asset value was HKD 12,434.9 million as of June 30, 2023, down from HKD 13,391.4 million at the end of 2022[58]. - The group's debt-to-asset ratio increased to 48.0% as of June 30, 2023, compared to 45.7% as of December 31, 2022[50]. - The company has maintained perpetual securities valued at HKD 1,732.9 million, unchanged from the previous period[60]. Real Estate and Development Projects - The group currently manages a total of four Regal Hotels in mainland China, with a new hotel in Chengdu under development[18]. - The new hotel project at Hong Kong International Airport covers an area of approximately 6,650 square meters and has a total floor area of 33,700 square meters, featuring 1,208 rooms and suites[25]. - The commercial/residential development project at 160 Queen's Road West has a total floor area of approximately 5,826 square meters and consists of 130 residential units[26]. - The group has integrated 100% ownership of a redevelopment property at 227-227C Hoi Tan Street, with a total site area of 431 square meters and a proposed total floor area of approximately 3,691 square meters[28]. Corporate Governance and Management - The company has undergone changes in its board of directors, with new appointments effective from September 1, 2023[120]. - The company has complied with the corporate governance code as per the listing rules, except for the roles of chairman and CEO not being separated[126]. - The independent auditor did not find any issues that would lead to a belief that the interim financial information was not prepared in accordance with HKAS 34[131].