Financial Performance - The company's revenue for the six months ended December 31, 2022, was HKD 709.4 million, down from HKD 1,084.6 million in the same period last year, reflecting a decline due to reduced foot traffic and overall business performance [10]. - The company reported a loss of HKD 166.1 million for the period, with a loss per share of HKD 0.10 [10]. - The group's operating loss for the first half of the 2023 fiscal year was HKD 46.2 million, compared to an operating profit of HKD 207.3 million in the same period of 2022 [25]. - The group's gross profit margin for the first half of the 2023 fiscal year was 12.0%, down from 13.1% in the same period of 2022 [44]. - The group reported a total loss of HKD 166,118,000 for the six months ended December 31, 2022, compared to a loss of HKD 146,540,000 before tax in the same period of the previous year [83]. - The group reported a net profit of HKD 41,002 thousand for the period, reflecting a decrease compared to previous earnings [105]. - The group reported a loss attributable to shareholders of HKD 166,118,000 for the six months ended December 31, 2022, compared to a profit of HKD 41,002,000 in 2021, resulting in a basic loss per share of HKD (0.10) versus HKD 0.02 in the previous year [162]. Revenue Sources - Rental income accounted for 42.6% of total revenue, followed by commission income from counter sales at 30.2% and self-operated merchandise sales at 25.9% [10]. - Total revenue from department store operations was HKD 1,649,789,000, down 41.3% from HKD 2,816,883,000 in the previous year [81]. - Revenue from department store sales decreased to HKD 398,122 thousand, down 41.6% from HKD 680,090 thousand in the previous period [103]. - Rental income declined to HKD 302,334 thousand, a decrease of 23.2% compared to HKD 393,373 thousand in the prior period [103]. - The group experienced a significant drop in commission income from counter sales, which fell to HKD 214,053 thousand, down 46.2% from HKD 398,311 thousand [103]. Membership and Customer Engagement - The number of members for the "New Flash Purchase Mini Program" increased by 26.1% year-on-year to over 1.3 million [14]. - Membership sales accounted for 67.7% of supermarket sales, an increase of 1.6% year-on-year [17]. - The company has introduced various marketing activities to attract customers, including themed events and collaborations with leasing merchants [12]. - The company is actively enhancing its digital marketing system and integrating online and offline sales strategies to improve customer experience [10]. Operational Metrics - Foot traffic in stores located in cities like Wuhan and Shanghai has recovered to over 80% of pre-pandemic levels, with Wuhan's Xudong store seeing an increase of over 18.0% year-on-year [10]. - The company operates 24 department stores and shopping centers across 13 major locations in mainland China, covering a total floor area of approximately 978,900 square meters [10]. - The group is focusing on enhancing online retail capabilities and diversifying online platforms to drive sales to physical stores [18]. Financial Position - The group's net debt as of December 31, 2022, was HKD 520.9 million, an increase from HKD 410.1 million as of June 30, 2022 [27]. - The group’s net current liabilities amounted to approximately HKD 2,792,887,000, which includes short-term bank borrowings of about HKD 774,093,000 [66]. - The cash and cash equivalents decreased by HKD 55,652,000, ending at HKD 530,564,000 as of December 31, 2022, compared to HKD 808,368,000 at the end of the previous period [63]. - The group recorded a decrease in cash flow from financing activities, with a net outflow of HKD 374,382,000 [63]. - The total cash and bank balances as of December 31, 2022, were HKD 27,022,000, indicating liquidity position [122]. Cost Management - The net amount of inventory purchases and changes decreased from HKD 261.5 million in the first half of 2022 to HKD 171.2 million in the first half of 2023, aligning with the decrease in self-operated product sales [47]. - Employee benefits expenses decreased to HKD 174,564,000 for the six months ended December 31, 2022, down from HKD 219,658,000 in the previous year, representing a reduction of about 20% [129]. - The company incurred a net loss of HKD 236,923,000 in other operating expenses for the six months ended December 31, 2022, compared to HKD 148,084,000 in the same period of 2021, indicating an increase of approximately 60% [135]. - Interest expenses on lease liabilities were HKD 86,616,000 for the six months ended December 31, 2022, down from HKD 120,757,000 in the previous year, a decrease of about 28% [136]. Asset Management - The group acquired investment properties amounting to approximately HKD 1,080,000 for the six months ended December 31, 2022, compared to HKD 4,526,000 in 2021 [153]. - The company reported a net impairment loss of HKD 3,515,000 for property, plant, and equipment during the period, reflecting management's assessment of market conditions [151]. - The inventory of finished goods increased to HKD 99,322,000 as of December 31, 2022, compared to HKD 94,606,000 as of June 30, 2022 [197]. - The group’s cash-generating units for goodwill allocation were approximately HKD 816,610,000 for the department store business and HKD 240,845,000 for the property investment business [172]. Future Outlook - The group expects to have sufficient resources to continue operations and meet financial obligations for the foreseeable future [68]. - The company plans to continue evaluating its asset impairment based on market conditions and management's future business outlook [151]. - If total revenue is 15% lower than management's estimate, the loss before tax for the period would increase by approximately HKD 489,338,000 [174].
新世界百货中国(00825) - 2023 - 中期财报