Revenue and Profitability - During the six months ended June 30, 2022, the Group did not generate any revenue from sales of materials, compared to HK$226.5 million in the previous period[13]. - The Group did not record any revenue or gross profit during the Period, compared to HK$226.5 million and HK$8.0 million in the previous period[38]. - Revenue for the six months ended June 30, 2022, was HK$0, compared to HK$226,516,000 in the same period of 2021, representing a decline of 100%[100]. - Gross profit for the period was HK$0, down from HK$7,978,000 in the previous year, indicating a significant decrease[100]. - The loss for the Period attributable to the owners of the Company was approximately HK$7.4 million, compared to a profit of HK$4.0 million in the previous period[47]. - The company reported a loss attributable to owners of approximately HK$7.4 million for the period, compared to a profit of HK$4 million in the same period last year[52]. - Total comprehensive loss for the period attributable to owners was HK$13,437,000, down from a comprehensive income of HK$8,109,000 in 2021[103]. - The operating loss for the period was HK$7,247,000, compared to an operating profit of HK$4,938,000 in 2021, reflecting a negative shift in operational performance[100]. Financial Position - As of June 30, 2022, the Group's equity attributable to owners decreased to approximately HK$207.7 million from HK$222.1 million as of December 31, 2021, primarily due to operating losses during the period[57]. - The Group's current assets and current liabilities were approximately HK$361.5 million and HK$111.8 million respectively, compared to HK$381.9 million and HK$117.4 million as of December 31, 2021[59]. - The Group's gearing ratio was 116.9% as of June 30, 2022, up from 107.6% as of December 31, 2021[55]. - The debt to equity ratio and net debt to equity ratio were 117.4% and 116.9% respectively as of June 30, 2022, compared to 111.6% and 107.6% as of December 31, 2021[56]. - The Group had bank and cash balances of approximately HK$1.1 million as of June 30, 2022, down from HK$8.9 million as of December 31, 2021[61]. - The current ratio, calculated as current assets over current liabilities, was 3.2 as of June 30, 2022, compared to 3.3 as of December 31, 2021[61]. - As of June 30, 2022, the Group's bank and cash balance was approximately HK$1.1 million, insufficient to cover current liabilities of approximately HK$111.8 million, raising significant doubts about the group's ability to continue as a going concern[129]. Operational Challenges - The Group experienced significant price fluctuations in aluminum-related products, nearly 100%, due to factors such as COVID-19 and the Russian-Ukrainian War[14]. - The Group temporarily ceased the supply of aluminum and related products while exploring other business opportunities[18]. - Due to COVID-19 and the Russian-Ukrainian War, the Group faced significant price fluctuations in aluminum and related products, leading to a temporary suspension of supply[29]. - The Group's sales of materials business faced a downturn in 2019 and 2020, prompting a strategic refinement of operations[12]. - The Group has been negotiating with customers to resume supplying aluminum-related products as prices appear to be stabilizing[19]. - The Group has resumed negotiations with customers to supply building materials and aluminum-related products as aluminum prices stabilized in the second half of 2022[30]. Strategic Initiatives - The establishment of warehouses in the PRC in early 2021 enhanced the Group's capability to respond to customer demand and act as a one-stop supplier[21]. - The Group aims to leverage its experience in the aluminum industry to attract international manufacturers interested in competitive pricing from the PRC[22]. - The Group aims to transform into a comprehensive supplier of aluminum-related products and building materials, enhancing its value-added services[28]. - The Group continues to explore other business opportunities based on its existing supply network in building materials[31]. - In June 2022, the Group entered into a sale and purchase agreement to acquire Hangzhou Zhongji, which provides construction and renovation services in China[31]. - The Proposed Acquisition of Hangzhou Zhongji is expected to improve the profitability of both Hangzhou Zhongji and the Group as a whole[36]. Compliance and Governance - The company has been notified by the Stock Exchange that it failed to maintain a sufficient level of operations as required under Rule 13.24, which jeopardizes its continued listing[81]. - The company is required to demonstrate compliance with Rule 13.24 and announce all material information for shareholders and investors to assess its position[84]. - The company is actively working on a resumption plan to address the issues causing its trading suspension and is in discussions with professional advisers[85]. - The recoverability of outstanding receivables is under investigation, with measures being taken to explore legal actions and debt restructuring proposals[90]. - The company is committed to addressing the outstanding receivables and is evaluating the feasibility of litigation against counterparties[90]. Taxation and Regulatory Matters - The applicable Hong Kong Profits Tax rate for the qualifying group entity is 8.25% on the first HK$2.0 million of assessable profits and 16.5% on profits above that threshold[165]. - The Corporate Income Tax (CIT) rate applicable to entities in Mainland China is 25% for the six months ended June 30, 2022, consistent with the previous year[166]. - There were no material unrecognized deferred tax assets and liabilities as of June 30, 2022, remaining consistent with December 31, 2021[167]. Staff and Management - Administrative and operating expenses increased by HK$3.2 million from HK$4.1 million in the previous period to HK$7.3 million in the current period, primarily due to a rise in legal and professional fees[46]. - The total staff costs for the period amounted to approximately HK$2.2 million, down from HK$3.2 million in the previous period[71]. - Key management personnel compensation for the six months ended June 30, 2022, was approximately HK$1,710,000, slightly up from HK$1,687,000 for the same period in 2021, indicating an increase of about 1.4%[197]. Asset Management - The Group's trade receivables as of June 30, 2022, amounted to HK$22,665,000, down from HK$24,099,000 as of December 31, 2021, indicating a decrease of approximately 5.93%[183]. - The net trade receivables after impairment provisions were HK$2,418,000 as of June 30, 2022, compared to HK$3,179,000 as of December 31, 2021, reflecting a decline of about 24.05%[183]. - The provision for impairment of trade receivables was HK$20,247,000 as of June 30, 2022, slightly down from HK$20,920,000 as of December 31, 2021[183]. - The company's deposits for the purchase of building materials amounted to HK$311,079,000 as of June 30, 2022, down from HK$321,208,000 as of December 31, 2021, reflecting a decrease of about 3.5%[187]. - Total trade payables decreased to HK$73,761,000 as of June 30, 2022, from HK$83,313,000 as of December 31, 2021, representing a decline of approximately 11.5%[190]. - The non-current other borrowings secured by the company's investment properties were HK$209,164,000 as of June 30, 2022, compared to HK$216,324,000 as of December 31, 2021, showing a reduction of about 3.3%[195].
环能国际(01102) - 2022 - 中期财报