Economic Outlook - The company is navigating the ongoing COVID-19 pandemic, with Hong Kong experiencing its fifth wave, but experts do not foresee a long-term impact on economic activity [13]. - Global inflation is rising due to a focus on goods consumption rather than services, with financial markets predicting 5 to 7 rate hikes by the US Federal Reserve in 2022 [13]. - Chinese economic data has been muted in 2021, but the government has shifted towards economic stability and monetary easing, which includes lowering policy rates and increasing government bond issuance [13]. - The company expresses cautious optimism regarding the outlook for the Chinese economy following a challenging year in 2021 [13]. - Geopolitical tensions, particularly between Russia and Ukraine, pose risks to commodity markets, especially for oil, gas, coal, aluminum, and wheat [13]. - The company is cautious on the outlook for equities in 2022 due to the US Federal Reserve lifting rates, but China's easing cycle may support commodity demand [99]. Financial Performance - APAC Resources reported a net loss attributable to shareholders of HK$275,329,000 for the six months ended 31 December 2021, compared to a net profit of HK$1,177,467,000 for the same period in 2020 [19]. - The loss included a significant impairment of HK$752,976,000 related to Mount Gibson Iron Limited, partially offset by gains of HK$342,584,000 from the change in fair value of Metals X Limited [19]. - Excluding non-cash items, the underlying segment profit was HK$287,865,000, driven by a strong performance in the Resource Investment division, which generated a segment profit of HK$212,830,000 [19]. - The net attributable loss from primary strategic investments for 1H FY2022 was HK$105,467,000, compared to a net profit of HK$151,048,000 in 1H FY2021 [20]. - Total revenue for the six months ended December 31, 2021, was HK$82,917,000, a decrease of 72.9% compared to HK$306,598,000 for the same period in 2020 [107]. - Gross profit for the same period was HK$57,114,000, representing an increase of 6.3% from HK$53,421,000 in the previous year [107]. - The company reported a loss attributable to owners of the company of HK$275,329,000 for the six months ended December 31, 2021, compared to a profit of HK$1,177,467,000 in the same period of 2020 [109]. - The company reported a significant increase in other gains and losses, totaling HK$557,791,000 for the period, compared to HK$415,621,000 in the previous year [107]. Investment Strategy - APAC Resources is cautious heading into 2022 due to weakness in financial markets related to tightening monetary policy, despite a tight supply-demand balance for several commodities [17]. - The company is focusing on low carbon industries, including electric vehicles, battery metals, and renewable energy, while also selectively considering "old economy" commodities like coal [17]. - The company plans to adopt a cautious investment approach in the short term while seeking quality investment opportunities that can yield substantial long-term returns [104]. - The largest investment is in Mount Gibson, which is ramping up production at the Koolan Island mine, positioning for strong free cash flow generation in the coming years [100]. - The company remains selective with investments in the near term, focusing on high-quality opportunities for long-term attractive returns [100]. Commodity Market Insights - Mount Gibson Iron Limited suspended operations at the Shine Iron Ore Project in November 2021 due to falling iron ore prices and high freight costs [21]. - The Koolan Island Restart Project achieved commercial production in June 2019 and has 21 million tonnes of 65.5% Fe reserves, with plans to increase production in the second half of FY2022 [22]. - The Platts IODEX 62% CFR China index fell from approximately US$210 per dry metric tonne in July to US$80 per dry metric tonne in November, currently around US$135 per dry metric tonne [28]. - Mount Gibson reported a net loss after tax of A$66 million for 1H FY2022 from sales of 0.7 million tonnes [28]. - Sales guidance for FY 2022 is set at 2 million tonnes, with 1.7 million tonnes expected from Koolan Island [28]. - The average benchmark market selling prices of clean coking coal products increased by approximately 78% year-on-year in 2021 [38]. - Tin prices rose from US$32,600 per tonne to around US$43,500 per tonne during the first half of FY2022, driven by low inventory levels [41]. Financial Position and Liabilities - As of 31 December 2021, non-current assets totaled HK$2,568,937,000, while net current assets amounted to HK$1,774,214,000, with a current ratio of 5.2 times [60]. - The company had borrowings of HK$118,771,000 as of 31 December 2021, with undrawn banking facilities amounting to HK$433,942,000 [61]. - The Group's current assets net value was HK$1,774,214,000, a decrease from HK$2,076,671,000 as of June 30, 2021, with a current ratio of 5.2 times compared to 20.7 times previously [64]. - The Group's borrowings (excluding lease liabilities) stood at HK$118,771,000 as of December 31, 2021, with unused bank financing amounting to HK$433,942,000 [65]. - The company recognized dividends payable of HK$260,425,000 as of December 31, 2021, compared to no dividends payable as of June 30, 2021 [114]. - Current liabilities increased significantly to HK$421,027,000 from HK$105,250,000, marking a rise of approximately 300.3% [114]. - Total liabilities rose to HK$430,737,000 compared to HK$114,190,000, indicating an increase of around 276.5% [114]. Operational and Segment Performance - The Group operates through three reportable segments: Commodity business, Resource investment, and Principal investment and financial services [147]. - Segment revenue from external customers for the six months ended 31 December 2021 was HK$82,917,000, which includes HK$61,835,000 from commodity business and HK$21,082,000 from interest income [155]. - The gross sales proceeds from resource investment amounted to HK$1,872,906,000 for the same period [155]. - The company experienced an impairment loss of HK$759,867,000 on interests in associates for the six months ended December 31, 2021 [107]. - The share of results of associates showed a profit of HK$105,439,000, recovering from a loss of HK$151,659,000 in the previous year [122]. - The company recorded a consolidated profit before taxation of HK$1,179,203,000 [164]. - The company experienced a reversal of impairment loss on interest in an associate amounting to HK$580,014,000 [164]. Employee and Corporate Governance - The total remuneration and pension contributions for the first half of FY2022 amounted to HK$22,161,000, an increase from HK$19,244,000 in the first half of FY2021 [71]. - The Group has 15 employees as of December 31, 2021, unchanged from June 30, 2021 [71]. - The Group's operational risks are managed through robust internal controls and regular evaluations by the internal audit team [80].
亚太资源(01104) - 2022 - 中期财报