Revenue Performance - In the first half of 2022, the company's revenue from fresh meat sales was HKD 644 million, a decrease from HKD 5.276 billion in the same period of 2021, accounting for approximately 66% of total revenue before internal sales offset[16]. - The revenue from frozen meat products was HKD 145 million, down from HKD 1.091 billion in the first half of 2021, representing about 15% of total revenue before internal sales offset[16]. - The group's revenue for the first half of 2022 was HKD 979 million, a significant decrease from HKD 7.179 billion in the same period of 2021[20]. - Overall sales revenue from upstream operations decreased to HKD 722 million, down from HKD 5.856 billion in the previous year, with fresh meat accounting for approximately 66% of total revenue[22]. - Sales of deep-processed meat products were HKD 258 million, a decline from HKD 1.441 billion in the first half of 2021, with low-temperature meat products generating HKD 145 million[23]. - The group reported external revenue of HKD 721,459,000 for fresh and frozen meat, a significant decrease from HKD 5,765,205,000 in the previous year, representing a decline of approximately 87.5%[109]. - Processed meat products generated external revenue of HKD 258,007,000, down from HKD 1,413,427,000, indicating a decrease of about 81.8%[109]. - Total reported segment revenue for the group was HKD 979,630,000, compared to HKD 7,297,447,000 in the previous year, reflecting a decline of approximately 86.6%[111]. Financial Performance - The overall gross profit decreased from HKD 387 million in the first half of 2021 to HKD 66 million, while the overall gross margin improved to 6.8% from 5.4% year-on-year[24]. - Operating expenses for the period were HKD 62 million, down from HKD 638 million in the previous year, representing 6.4% of total revenue[29]. - The group's operating profit was approximately HKD 9 million, a significant drop from HKD 3.308 billion in the same period of 2021[30]. - The loss attributable to equity holders was approximately HKD 11 million, compared to a profit of HKD 3.288 billion in the first half of 2021[33]. - The group reported a net loss attributable to equity holders of approximately HKD 540 million as of June 30, 2022[42]. - The group recorded a reported segment loss of HKD 16,391,000, a significant improvement from a loss of HKD 166,725,000 in the previous year[109]. - The net loss attributable to equity holders for the period was HKD 16,135,000, compared to a profit of HKD 3,286,680,000 in the prior year[83]. - Total comprehensive loss for the period was HKD 22,313,000, compared to a comprehensive income of HKD 2,967,742,000 in the same period last year[83]. Operational Challenges - The average price of live pigs in China dropped by approximately 44% in the first half of 2022 due to increased supply, with pig production rising by 8.4% year-on-year to 366 million heads[7]. - The average procurement price of live pigs dropped by approximately 43.6% compared to the first half of 2021, with the slaughter volume decreasing to about 360,000 heads from 1.29 million heads[21]. - The company aims to improve its financial performance and profitability through a series of measures implemented since last year, despite ongoing impacts from African swine fever and COVID-19, resulting in a continuous reduction in losses[58]. - The company anticipates that the expected effects of its measures may be delayed by at least three to six months due to the stringent pandemic control policies affecting production and business activities[58]. - The group has acknowledged significant uncertainties regarding its ability to continue as a going concern if planned measures do not yield expected results[104]. Corporate Governance and Compliance - The company has maintained a high standard of corporate governance, with a board consisting of five directors and various committees overseeing financial and business strategies[74]. - The company has established a risk management and internal control system to safeguard its assets and manage business risks effectively[74]. - The board believes that having the chairman and CEO roles combined enhances business strategy formulation and execution[75]. - The company has confirmed compliance with the standard code of conduct for securities trading by all directors during the review period[77]. Shareholder Information - Major shareholders hold significant stakes, with Willie Holdings Limited and associated individuals collectively owning approximately 25.82% of the issued shares, totaling 470,699,900 shares[65]. - Willie Holdings Limited is primarily owned by Willie Holdings, with 93.41% held by former executive director and chairman Mr. Zhu and 6.59% by his spouse Ms. Wu[66]. - As of June 30, 2022, a total of 16,275,000 share options were granted under the old scheme, with 14,350,000 remaining unexercised[69]. - The new share option scheme was adopted on August 7, 2015, and no options have been granted under this scheme since its adoption[67]. Cash Flow and Liquidity - As of June 30, 2022, the group's cash and cash equivalents amounted to HKD 60 million, a decrease of HKD 20 million from HKD 80 million as of December 31, 2021[36]. - The group had outstanding bank borrowings of HKD 509 million as of June 30, 2022, down from HKD 544 million as of December 31, 2021[37]. - The company experienced a cash inflow from operating activities of HKD 11,990,000 for the six months ended June 30, 2022, compared to a cash outflow of HKD 13,006,000 in the same period of 2021[98]. - The company incurred a cash outflow of HKD 5,085,000 from investing activities for the six months ended June 30, 2022, compared to HKD 223,663,000 in the previous year[98]. - The company recorded a cash outflow of HKD 12,034,000 for the repayment of bank loans during the financing activities[98]. Employee and Personnel Information - The group employed approximately 1,100 staff as of June 30, 2022, down from approximately 1,500 staff as of December 31, 2021[49]. - Personnel expenses for the six months ended June 30, 2022, amounted to HKD 54,998,000, a decrease of 84.4% from HKD 352,280,000 in the same period of 2021[120]. - The total remuneration for key management personnel was HKD 1,649,000 for the first half of 2022, up from HKD 1,271,000 in the same period of 2021, representing a growth of 29.7%[157]. Legal and Regulatory Matters - The group is currently involved in litigation with domestic banks in China, seeking immediate repayment of HKD 508,544,000 in bank loans[118]. - The group has not recorded any litigation losses for the current period, contrasting with HKD 3,000,000 in litigation losses recorded in the previous year[114]. - The company has no significant pending litigation or claims that could materially affect its financial position or performance as of June 30, 2022[152]. - The company has not recognized any significant contingent liabilities related to ongoing legal proceedings as of the reporting date[152].
雨润食品(01068) - 2022 - 中期财报