Financial Performance - The food segment's revenue decreased by 18% to HK$2,295 million, while operating profit declined by 86% to HK$25 million[19]. - The Group's revenue declined by 16% to HK$2,715 million compared to the same period last year, primarily due to a downturn in sales volume in the Flour business[39]. - The Group's profit for the period decreased by 76% to HK$42 million[39]. - Revenue for the six months ended December 31, 2022, was HK$2,715,046, a decrease of 15.8% compared to HK$3,226,931 for the same period in 2021[88]. - Gross profit for the same period was HK$449,056, down 28.4% from HK$626,225 in 2021[88]. - Profit before taxation for the period was HK$42,207,000, compared to HK$173,034,000 in the same period last year, reflecting a significant decline[149]. - Total comprehensive income for the period was a loss of HK$47,029, compared to a gain of HK$208,624 in the prior year[89]. - Basic and diluted earnings per share decreased to HK$0.18 from HK$0.73, reflecting a 75.7% drop[88]. - The company reported a consolidated profit before taxation of HK$50,698, significantly lower than HK$188,157 in the previous year, representing a decline of about 73.0%[111]. Market Conditions - The Edible Oil business encountered a tough environment with historically high oil costs and reduced market demand due to COVID-19 disruptions[25]. - The adverse conditions from COVID-19 outbreaks and inflation pressures significantly impacted revenue growth and profitability during the review period[12]. - The revenue decline was primarily driven by unfavorable foreign currency translation impacts on Mainland China revenues, which constitute the bulk of the business[29]. - The company faced challenges due to significant fluctuations in palm oil prices, impacting profitability and inventory valuation[76]. Operational Strategies - The Group implemented a competitive pricing strategy to maintain market share and inventory turns amid intense price drops[24]. - Operational efficiencies were enhanced by streamlining production and logistics networks in Mainland China to better position the Group for future opportunities[29]. - The Group is focused on enhancing business resilience by adapting to changing consumer behaviors and market dynamics, aiming for sustainable growth in the future[56]. - The Group plans to gradually roll out the proprietary adjustable cap design across the full product range in Hong Kong and Mainland China post-Chinese New Year[25]. Cash Flow and Liquidity - As of December 31, 2022, the Group's cash balance was HK$1,387 million, a decrease from HK$1,541 million as of June 30, 2022[33]. - Cash and cash equivalents at December 31, 2022, were HK$659,949, down from HK$1,124,076 at the end of the previous year, indicating a decrease of approximately 41.2%[118]. - Net cash used in operating activities was HK$14,907, a stark contrast to the net cash generated of HK$157,268 in the previous year[118]. - Net current assets were HK$1,910,657, down from HK$1,997,999, reflecting tighter liquidity[91]. Dividends and Shareholder Returns - The Group declared an interim dividend of HK$0.10 per share, totaling approximately HK$24 million for the six months ended December 31, 2022[44]. - The interim dividend declared was HK$0.10 per share, down from HK$0.15 per share in the previous year[147]. Employee and Workforce Management - As of December 31, 2022, the Group had 1,661 employees, with annual increment and year-end performance bonus mechanisms incorporated in the remuneration policy to retain and motivate individuals[61]. - Staff costs totaled HK$227,650,000, a decrease of 2.3% from HK$233,739,000 in 2021[137]. - The Group's total salaries, wages, and other benefits amounted to HK$209,175,000, a decrease of 2.5% from HK$214,775,000 in 2021[137]. Investment and Capital Expenditure - The Group invested a total of HK$34 million in capital expenditure for the acquisition of plant equipment during the six months ended December 31, 2022, compared to HK$62 million in the same period of 2021, representing a decrease of 45.16%[61]. - The Group acquired property, plant, and equipment at a cost of HK$30,851,000, significantly lower than HK$67,065,000 in the previous year[170]. Currency and Foreign Exchange - The Group faces currency risk primarily through sales and purchases, which are monitored to ensure foreign exchange exposure remains at an acceptable level[61]. - The Group's operations are primarily denominated in Renminbi, Hong Kong dollars, and Macau Patacas, indicating a diverse currency exposure[59].
南顺(香港)(00411) - 2023 - 中期财报