Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 13,969 million, a decrease of 4.6% compared to RMB 14,644 million in the same period of 2022[16]. - Gross profit for the same period was RMB 22,059 million, down from RMB 24,999 million in 2022, reflecting a decline of 11.7%[16]. - Profit for the period attributable to owners of the Company was RMB 282 million, a significant decrease from RMB 1,199 million in 2022, representing a decline of 76.5%[16]. - Basic earnings per share for the six months ended June 30, 2023, was RMB 0.08, compared to RMB 0.32 in the same period of 2022, a decrease of 75%[16]. - The Company reported an EBITDA of RMB 1,050 million for the six months ended June 30, 2023, down from RMB 2,273 million in 2022, a decline of 53.8%[16]. - The Group's net profit for the six months ended June 30, 2023, decreased by approximately 72.9% to around RMB 1.02 billion compared to RMB 3.74 billion for the same period in 2022[38]. - Revenue for the same period was approximately RMB 22.06 billion, representing a decrease of approximately 11.8% compared to the corresponding period last year[38]. - Gross profit decreased by approximately 58.5% to approximately RMB 562 million compared to the same period in 2022[38]. - Interim net profit was approximately RMB 276 million, a decrease of approximately 77.6% from RMB 1.23 billion in the previous year[38]. - EBITDA decreased from approximately RMB 2.27 billion for the corresponding period last year to approximately RMB 1.05 billion[38]. Sales and Production - Sales volume of self-manufactured steel products increased to 3,881,000 tonnes in 2023, up from 3,323,000 tonnes in 2022, an increase of 16.7%[25]. - The average selling price per tonne of self-manufactured steel products decreased to RMB 3,599 in 2023 from RMB 4,406 in 2022, a decline of 18.3%[21]. - The sales volume of H-section steel products was 1,945,000 tonnes, representing 50.1% of total sales volume, with a 6.5% increase compared to the previous year[50]. - The sales volume of strips and strip products increased by 20.8% to 1,442,000 tonnes, accounting for 37.2% of total sales volume[50]. - For the six months ended June 30, 2023, the Group's total sales volume was approximately 3.88 million tonnes, representing an increase of approximately 16.8% compared to 3.32 million tonnes in the same period of 2022[49]. Assets and Liabilities - Total assets as of June 30, 2023, were RMB 49,459 million, an increase from RMB 48,024 million in 2022[17]. - The net assets value per share increased slightly to RMB 6.12 in 2023 from RMB 6.07 in 2022[17]. - As of June 30, 2023, the Group had unutilized banking facilities of approximately RMB 15.2 billion, an increase from RMB 13.6 billion as of December 31, 2022[72]. - The current ratio as of June 30, 2023, was 1.3 times, up from 1.2 times on December 31, 2022, while the gearing ratio was 48.5%, compared to 47.3% at the end of 2022[72]. - Cash and cash equivalents amounted to approximately RMB 4,666 million as of June 30, 2023, significantly higher than RMB 2,125 million as of December 31, 2022[72]. - The debt-to-capital ratio was 57.6% as of June 30, 2023, compared to 56.7% on December 31, 2022[74]. - Capital commitments as of June 30, 2023, were approximately RMB 1,558 million, down from RMB 1,925 million as of December 31, 2022[75]. - Contingent liabilities amounted to approximately RMB 15 million as of June 30, 2023, a decrease from RMB 88 million at the end of 2022[78]. Market and Economic Conditions - National production volumes of pig iron, crude steel, and steel products in the first half of 2023 were 452 million tonnes, 536 million tonnes, and 677 million tonnes, representing increases of 2.7%, 1.3%, and 4.4% respectively compared to the same period in 2022[33]. - Infrastructure investment in China increased by 7.2% year-on-year, while the new construction area in the real estate sector saw a decline of 24.9%[33]. - The international environment remains complex and volatile, with economic growth slowing down and uncertainties affecting the global economy[66]. - The Group expects the business environment of the iron and steel industry to face various uncertainties in the second half of 2023, with fluctuations at a low level but an overall gradual improvement trend[66]. Strategic Initiatives - The Group continues to focus on cost reduction, efficiency improvement, and investment in marketing and environmental protection[37]. - The Group aims to achieve better cost efficiency and reduce emissions through investments in projects such as a 150MW mountainous centralized photovoltaic power station and comprehensive utilization of solid waste as new materials in the second half of 2023[67]. - The Group continues to explore horizontal and vertical merger and acquisition opportunities to broaden revenue sources and enhance profitability[68]. - The Group plans to strengthen upstream and downstream integration with its power transmission equipment business in the second half of 2023[67]. - The Group is committed to green and sustainable development, closely following policy developments and exploring carbon reduction technology solutions[67]. Investment and Financial Management - The Group's financial strategy includes a review and reallocation of its currency assets to reduce the impact of exchange rate changes[83]. - The Group utilized a combination of derivatives to manage the volatility of steel products and iron ore prices during the reporting period[84]. - The total amount of purchases made in money market funds during the six months ended June 30, 2023, was RMB 45,063 thousand, while total disposals amounted to RMB 59,878 thousand[87]. - The investment strategy for money market funds focuses on high liquidity and low risk, primarily investing in short-term money market instruments[91]. - The Group's financial assets at fair value through profit or loss include various money market funds, with specific funds showing different levels of investment performance[87]. Dividend and Shareholder Returns - The Group did not recommend the distribution of an interim dividend for 2023, considering the current challenges in the iron and steel industry[39]. - The Board proposed a special dividend of approximately HK$112 million, equivalent to approximately RMB102 million, which was approved by shareholders and paid on August 18, 2023[84]. - The Group will evaluate the possibility of increasing dividend distributions to reward shareholders under appropriate circumstances[68].
中国东方集团(00581) - 2023 - 中期财报