Terminal Operations - The Group operates a liquid product terminal, Dongzhou Petrochemical Terminal, with a total storage capacity of approximately 260,000 cubic meters, including 180,000 cubic meters for gasoline and diesel [12]. - The Group is in the process of developing the second phase of the terminal, which includes the construction of liquefied natural gas (LNG) storage tanks on approximately 150,000 square meters of vacant land [13]. - The terminal is strategically located in the Greater Bay Area, attracting customers for the distribution of refined oils and providing storage for hazardous materials [16]. - Revenue from the terminal storage business is generated through leasing storage tanks and handling charges for cargo movement, along with ancillary services such as tank cleaning [17]. - The average leaseout rate for oil and petrochemical tanks was 97.5% in 2022, a slight decrease of 0.3 percentage points from the previous year [23]. - Terminal throughput dropped by 20.9% to 3,295,000 metric tons in 2022, with port jetty throughput down 14.2% and loading station throughput down 32.3% [23]. - Transshipment volume for oil increased by 117.6% to 54,557 metric tons, while petrochemicals increased by 84.1% to 91,663 metric tons [23]. Trading Business Performance - The number of sale contracts entered in the trading business fell by 37.6% to 58, and sales volume of oil and petrochemical products decreased by 74.1% to 116,000 metric tons [30]. - The Group's trading business has been impacted by external factors, including consumption tax on refined oil products and high volatility in crude oil prices [30]. - The decline in trading revenue was primarily due to the consumption tax imposed by the Chinese government on certain refined oil and petrochemical products since June 2021, which increased costs and dampened customer demand [40]. Financial Performance - The Group recorded total revenue of HK$694.9 million for the year ended December 31, 2022, a significant decrease of 64.8% compared to the previous year [40]. - Revenue from the sale of oil and petrochemical products was HK$543.6 million, accounting for 78.2% of total revenue, reflecting a decrease of 69.6% year-on-year [40]. - Terminal storage business generated revenue of HK$145.6 million, representing 21.0% of total revenue, with a decrease of 13.3% compared to the previous year [40]. - Rental income from a filling station was HK$5.6 million, down 64.4% from HK$15.7 million in the previous year [40]. - Gross profit for the year was approximately $93.6 million, down 12.4% from $106.8 million in 2021, but the gross profit margin increased to 13.5%, up by 8.1 percentage points year-on-year [54][56]. - EBIT increased by 18.3% to approximately $55.4 million from $46.8 million in 2021, driven by higher other income and reduced selling and administrative expenses [54][58]. - EBITDA for the year was approximately $112.3 million, a decrease of 8.7% from $123.0 million in 2021, reflecting the overall decline in trading activities [54][58]. - The Group's total cash and bank balances as of December 31, 2022, amounted to approximately $162.3 million, an increase from $118.2 million in 2021, mainly due to cash inflow from operating activities [67]. - As of December 31, 2022, total assets were approximately $1,976.7 million, down from $2,286.7 million in 2021, with net current assets decreasing to approximately $235.3 million [68]. - The gearing ratio as of December 31, 2022, was 38.9%, a slight improvement from 40.9% in 2021, indicating a reduction in leverage [69]. - The basic and diluted earnings per share for the year was $0.01, a turnaround from a loss of $0.41 per share in 2021, indicating improving earnings [66]. Strategic Initiatives - The Group aims to expand its customer base to end customers of filling stations by signing key fuel supply agreements and providing brand management services [27]. - The Group plans to actively expand its customer base and business scale as the pandemic situation stabilizes [31]. - The Group plans to attract customers engaged in new energy products, such as biodiesel, to support its transformation into the new energy industry [44]. - In 2023, the Group aims to increase the number of franchised filling stations under the "Hans Energy" brand to expand its market share [45]. - The second phase development of the DZIT project, including LNG tank construction, is expected to make substantial progress in 2023 [46]. Corporate Governance - The company has committed to high standards of corporate governance practices in compliance with the CG Code, with the Board stating compliance throughout the year except for certain deviations [141]. - The company has adopted many new requirements under the amended CG Code, which became applicable from January 1, 2022, reflecting its commitment to corporate governance [142]. - The Group's Anti-Bribery and Corruption Policy was introduced in November 2022, covering anti-corruption activities and reporting mechanisms for suspected corruption practices [146]. - The Group's Whistleblowing Policy was also introduced in November 2022, ensuring that any convicted cases will be reported to the chairman of the Audit Committee [146]. - The Board Diversity Policy was adopted in August 2013 and is subject to annual review, with a commitment to appoint at least one female Director by December 31, 2024 [151]. - The Group has no female Director currently but is actively seeking suitable candidates to meet gender diversity targets [152]. - The Group's practices align with new corporate governance requirements, emphasizing a healthy corporate culture to achieve sustainable growth [144]. Human Resources - The Group had approximately 172 employees as of December 31, 2022, a decrease from 230 employees in 2021 [105]. - The Group has adopted share option and share award plans to incentivize eligible employees [111]. - The Group aims to provide reasonable benefits to eligible employees through social insurance policies [111]. Investments and Financial Position - The Group's significant investments include unlisted equity securities in BTHL, with a total consideration for share subscriptions amounting to HKD 1.19 billion, HKD 12.58 billion, and HKD 8 million for respective shares [78]. - Following the completion of the BTHL acquisition, Glorify held 1,555.91 BTHL shares as of December 31, 2022, representing approximately 15.56% of the entire issued share capital in BTHL [85]. - The Group recorded a fair value loss of HK$140.0 million for the year ended December 31, 2022, compared to a gain of HK$309.3 million in 2021 [90]. - The total capital contribution into Templewater by the Group was approximately HK$78 million (equivalent to approximately US$10 million) as of December 31, 2022 [92]. - The Group had a maximum capital commitment of HK$156 million (equivalent to US$20 million) in Templewater, which had total committed capital of approximately US$187 million [92]. - The Group did not invest in Templewater during the year ended December 31, 2022, compared to an investment of HK$25.0 million in 2021 [97]. Risk Factors - The ongoing impact of the Russia-Ukraine war and global inflation presents uncertainties for the Company's development in 2023 [43]. - Management is confident that the Group has adequate financial resources to meet future debt repayments and support working capital and expansion needs [75]. - The Group will pay close attention to capital and debt market conditions to ensure efficient use of financial resources [79].
汉思能源(00554) - 2022 - 年度财报