Financial Performance - The company reported revenue of HKD 42,787,000 for the six months ended December 31, 2022, an increase of 8.4% compared to HKD 39,460,000 in the same period last year[14]. - Gross profit decreased to HKD 6,991,000, down 29.3% from HKD 9,861,000 year-on-year[14]. - The company incurred a loss attributable to owners of HKD 2,849,000, an improvement from a loss of HKD 7,809,000 in the previous year[15]. - The total comprehensive loss for the period was HKD 13,367,000, compared to a gain of HKD 453,000 in the same period last year[15]. - Basic and diluted loss per share was HKD 0.14, unchanged from the previous year[15]. - The company recorded a net loss of HKD 2,031,000 before tax, significantly reduced from HKD 5,796,000 in the prior year[14]. - The group reported a total segment loss of HKD 1,091,000 for the six months ended December 31, 2022, compared to a profit of HKD 3,130,000 in the same period of 2021[38]. - The group incurred a total comprehensive loss of HKD 2,237,000 for the six months ended December 31, 2022, compared to a loss of HKD 6,414,000 in the same period of 2021[38]. - The total income tax expense for the six months ended December 31, 2022, was HKD 206,000, a decrease of 66.7% from HKD 618,000 in the previous year[7]. - The company did not declare an interim dividend for the six months ended December 31, 2022, consistent with the previous year[44]. Cash Flow and Liquidity - The company reported a net cash outflow from operating activities, indicating potential liquidity challenges[11]. - The net cash used in operating activities for the six months ended December 31, 2022, was HKD (2,170,000), an improvement from HKD (10,541,000) in the same period of the previous year[21]. - The company raised borrowings of HKD 6,772,000 during the financing activities in the six months ended December 31, 2022[21]. - The board has implemented measures to improve the group's liquidity and financial condition, ensuring the preparation of financial statements on a going concern basis[25]. - An executive director has committed to providing sufficient funds to ensure the group can meet its financial obligations and continue operations without significant reduction for the next 12 months from December 31, 2022[26]. - The group is continuing to implement measures aimed at improving operational cash flow, including cost-saving initiatives to maintain adequate cash flow[26]. Assets and Liabilities - The total liabilities as of December 31, 2022, were approximately HKD 3,184,000, raising concerns about the company's ability to continue as a going concern[11]. - As of December 31, 2022, total assets minus current liabilities amounted to HKD 651,768,000, a decrease from HKD 671,566,000 as of June 30, 2022[17]. - The company's total equity as of December 31, 2022, was HKD 523,102,000, down from HKD 536,469,000 as of June 30, 2022[18]. - Total non-current assets decreased to HKD 654,952,000 as of December 31, 2022, from HKD 673,988,000 as of June 30, 2022[17]. - The total liabilities decreased to HKD 128,666,000 as of December 31, 2022, from HKD 135,097,000 as of June 30, 2022[18]. - The total assets of the reporting segments as of December 31, 2022, amounted to HKD 729,773,000, compared to HKD 761,388,000 as of June 30, 2022[38]. Revenue Breakdown - Revenue from the sale of recycled metals was HKD 8,667,000, while the sale of automobiles and related parts generated HKD 31,136,000[37]. - The group recognized HKD 1,935,000 in revenue from biological assets during the reporting period[37]. - Revenue from hotel operations and food and beverage sales was HKD 577,000 for the reporting period[39]. - The group’s revenue from external customers in Hong Kong was HKD 36,162,000, while revenue from Macau and Taiwan was HKD 266,000 and HKD 71,000, respectively[39]. - The group recorded metal recycling business revenue of approximately HKD 8,667,000 for the six months ended December 31, 2022, compared to HKD 9,092,000 in the previous year, reflecting a decline[68]. - The automotive and automotive parts business generated revenue of approximately HKD 31,136,000 for the six months ended December 31, 2022, an increase from HKD 27,365,000 in the previous year, indicating stable growth[71]. - The group generated revenue of approximately HKD 577,000 from its hotel business for the six months ended December 31, 2022, compared to zero revenue in the same period of 2021[80]. Fair Value Measurements - As of December 31, 2022, the fair value measurement of biological assets was reported at HKD 259,760,000, while the fair value of investment properties in Hong Kong was HKD 191,900,000[31]. - The total fair value measurement for the group as of December 31, 2022, was HKD 541,356,000, compared to HKD 551,778,000 as of June 30, 2022[31]. - The fair value of the major personnel insurance contract increased from HKD 18,160,000 as of June 30, 2022, to HKD 18,468,000 as of December 31, 2022[32]. - The fair value of investment properties in China was reported at HKD 70,330,000 as of December 31, 2022, down from HKD 73,678,000 as of June 30, 2022[34]. - The valuation techniques and inputs used for fair value measurement have remained unchanged during the reporting periods[35]. Corporate Governance and Compliance - The company has complied with the corporate governance code as per the listing rules, except for the separation of roles between the Chairman and CEO[108]. - The company has established an audit committee to review and monitor its financial reporting procedures and internal controls[111]. - The company plans to hold its annual general meeting on April 3, 2023, at the Empire Hotel in Kowloon, Hong Kong[108]. - The company’s audit committee consists of three independent non-executive directors, ensuring compliance with the relevant regulations[111]. Market Conditions and Future Outlook - Hong Kong's GDP contracted by 3.5% in 2022, with significant year-on-year declines of 4.6% and 4.2% in the third and fourth quarters, respectively[83]. - The group anticipates partial economic recovery in Hong Kong in 2023, with China's economy expected to grow by approximately 5% due to the lifting of lockdown policies[83]. - The U.S. Federal Reserve raised the federal funds rate target range to 4.5% to 4.75% in February 2023, with expectations of further increases by the end of the year[83]. - The group is exploring new business opportunities and focusing on sustainable development in existing operations, including hotel business expansion in Nepal[65]. - The group is reallocating resources in the Chinese market to meet the demand for high-performance tires, which has been identified as a growth area[71]. - The group is facing challenges in sourcing scrap metal in Hong Kong due to increasing competition and the impact of COVID-19 on logistics and supply chains[68]. - The group is actively collecting data and assessing risks related to its operations in Xinjiang, particularly in light of the COVID-19 situation and government policies[65].
中国环境资源(01130) - 2023 - 中期财报