Financial Performance - The Group's revenue decreased by approximately 16.2% to approximately HK$269.6 million from approximately HK$321.8 million in the previous year[11]. - The loss attributable to the owners of the Company was approximately HK$257.0 million, a reduction from HK$357.8 million in the previous year, primarily due to an impairment loss on loan and interest receivables of HK$215.3 million and a fair value loss on investment properties of HK$35.8 million[12]. - For the year ended December 31, 2022, the sales of materials contributed approximately HK$268.7 million, representing 99.7% of the total revenue of the Group[29]. - The Group recorded a revenue of approximately HK$269.6 million for the Year, a decrease of 16.2% compared to HK$321.8 million in the Previous Year, primarily due to the temporary cessation of aluminum supply caused by COVID-19 and the Russian-Ukrainian War[51][55]. - The gross profit increased by HK$0.8 million to approximately HK$16.7 million, with the overall gross profit margin rising from 4.9% to 6.2%, attributed to higher margins from sales of aluminum-related products and scrap copper[53][56]. - Administrative and operating expenses decreased significantly by HK$4.9 million or 32.9%, from HK$14.9 million in the Previous Year to HK$10.0 million, mainly due to reduced staff costs and legal fees[61][65]. - The Group's rental income from properties investment amounted to approximately HK$0.9 million during the year, an increase from HK$0.8 million in the previous year[36]. Business Strategy and Operations - The Group is exploring opportunities to expand its supply of building materials in the PRC due to significant fluctuations in aluminum product prices since late 2021[13]. - In October 2022, the Group established a joint company with Hangzhou Zhongji to supply building materials for construction and renovation projects in the PRC[18]. - The Group aims to transform into a comprehensive supplier of aluminum-related products and building materials, including value-added services[43]. - The Group established warehouses in the PRC in early 2021 to enhance inventory management and respond quickly to customer demands[37]. - The management identified significant demand for building materials in Hangzhou, leveraging existing supply networks[45]. - The Group has shifted its focus to recurring domestic customers to maintain sustainable business amidst uncertainties in global aluminum prices[51][55]. - The joint venture is expected to expand the Group's sales channels and customer base in the Chinese construction industry, presenting a positive outlook[49]. Risk Management - The Group will continue to monitor risks related to COVID-19 and the political environment, implementing stringent cost and risk management measures[20]. - The Group has maintained relationships with customers and suppliers to explore collaboration opportunities for future business resumption[44]. - The Group has temporarily ceased the supply of aluminum and related products to overseas customers due to price instability, while exploring other business opportunities[34]. Financial Position and Liabilities - As of December 31, 2022, the Group reported a total deficit attributable to the owners of approximately HK$44.7 million, a significant decline from total equity of HK$221.1 million as of December 31, 2021, primarily due to operating losses during the year[95]. - The Group's net debts amounted to HK$232.3 million as of December 31, 2022, compared to HK$237.8 million in the previous year, while total capital decreased from HK$458.9 million to HK$159.5 million[95]. - The gearing ratio increased to 128.0% as of December 31, 2022, up from 51.8% in 2021, indicating a higher level of financial leverage[95]. - The current ratio fell to 0.6 as of December 31, 2022, down from 3.3 in the previous year, reflecting a decline in liquidity[99]. - The Group's bank and cash balances were approximately HK$8.1 million as of December 31, 2022, a slight decrease from HK$8.9 million in 2021, with 95% of these balances denominated in Renminbi[98]. - Total current assets and current liabilities were approximately HK$267.7 million and HK$434.3 million, respectively, as of December 31, 2022[96]. Legal and Compliance Issues - The auditor issued a qualified opinion on the recoverability of loan receivables and interest receivables, indicating potential issues with collection[74]. - The Group filed a court application to seize properties from Shenzhen Aquatic to recover loan and interest receivables, but the court ruled against the Group due to insufficient evidence[78]. - The Company has faced challenges regarding its listing status, with the Stock Exchange indicating insufficient operational levels to warrant continued listing[128][129]. - The Company received a letter from the Stock Exchange on 19 October 2021 regarding its trading suspension and the need to demonstrate compliance with Rule 13.24 of the Listing Rules[130]. - Trading in the Shares has been suspended since 9:00 a.m. on 15 September 2021, pending fulfillment of the Resumption Guidance[133]. - The Company must remedy issues causing its trading suspension and fully comply with the Listing Rules before trading can resume[132]. Impairment and Receivables - The Group recognized a fair value loss on investment properties amounting to HK$35.8 million for the Year, compared to HK$13.9 million in the Previous Year[62][66]. - The Group recognized a loss allowance of HK$0.5 million for trade receivables during the Year, reflecting management's assessment of expected credit losses[63][67]. - The Group recognized an impairment loss of HK$316.6 million on prepayments and HK$19.7 million on trade receivables during the previous year due to uncertainty in recovering outstanding balances[73]. - The Group's management expressed a lack of optimism regarding the recovery of outstanding balances from certain parties[73]. - The financial situation of Shenzhen Aquatic may have deteriorated due to its association with a former director facing criminal charges[82]. - The Group's ability to recover loan and interest receivables remains uncertain, impacting financial stability[85]. - The Group's proactive actions to recover outstanding balances have not yielded positive results, leading to significant impairment losses[73]. Employee and Operational Changes - Staff costs for the year amounted to approximately HK$5.1 million, a decrease from HK$5.9 million in the previous year, with an increase in total employees from 19 to 27[108]. - As of December 31, 2022, the Group employed a total of 27 employees in Hong Kong and China, an increase from 19 employees in the previous year[112]. - The employee costs for the year amounted to approximately HK$5.1 million, down from HK$5.9 million in the previous year[112]. Disposals and Joint Ventures - On October 31, 2022, the Company entered into agreements to sell its wholly-owned subsidiaries Sincere Venture Limited and Heryd International Trade Co., Limited for a consideration of HK$1 each[114][117]. - The Group is entitled to receive contingent consideration equivalent to 40% of the recovered balances of various receivables from the disposed subsidiaries within three years[115][118]. - A joint venture was established on October 20, 2022, with Hangzhou Zhongji, where the Group holds a 60% interest, focusing on the supply of building materials[120][125]. - The joint venture commenced operations in October 2022 and has secured multiple sales contracts for construction and renovation projects in China[121]. - The Company aims to enhance its sales networks and customer base in the construction industry in China through the joint venture[122]. - The Disposals were completed in December 2022, and the relevant subsidiaries have ceased to be part of the Company[187].
环能国际(01102) - 2022 - 年度财报