Financial Performance - The Group's revenue for the period was approximately HK$2,761.2 million, a decrease of approximately 12.7% compared to HK$3,162.9 million in the previous year, driven by a 22.3% decrease in sales volume and a 12.4% increase in average sales price [7]. - Profit attributable to equity holders was HK$248.2 million, down approximately 28.6% from HK$347.7 million in the previous year, due to lower sales revenue and higher fixed cost absorption from reduced production facility utilization [7]. - Operating profit decreased to HK$257,583, down 31.1% from HK$374,146 in the previous year [37]. - Net profit attributable to equity holders decreased by 28.6% during the reporting period [29]. - Total comprehensive loss for the period was HK$44,118, compared to a comprehensive income of HK$405,971 in the same period last year [38]. - Earnings per share for the period was HK$0.18, down from HK$0.25 in the previous year [37]. - The company reported a profit of HK$248,179,000, a decrease from HK$347,662,000 in the same period of the previous year, representing a decline of approximately 29% [41]. Cost and Expenses - Cost of sales decreased to HK$2,432.0 million from HK$2,700.8 million, representing a decrease of approximately 10.0%, consistent with the decline in revenue [7]. - Selling and distribution expenses decreased to HK$21.5 million from HK$33.9 million, reflecting a reduction in costs [7]. - Administration expenses slightly increased to HK$90.3 million from HK$87.7 million, indicating a minor rise in operational costs [7]. - Finance costs surged by approximately 187.1% to HK$20.5 million, up from HK$7.1 million, primarily due to increased interest expenses and net foreign exchange losses on bank loans [7]. - Employee benefits expenses decreased to HK$248,666,000, down 13.8% from HK$288,338,000 in the prior year [64]. Assets and Liabilities - As of September 30, 2022, the Group's total assets increased by approximately 2.2% to HK$6,075.4 million compared to HK$5,944.2 million as of March 31, 2022 [10][13]. - Non-current assets amounted to HK$2,021.6 million, while current assets were HK$4,053.8 million as of September 30, 2022 [10][13]. - The Group's current ratio decreased to 1.5 as of September 30, 2022, down from 1.7 as of March 31, 2022 [19]. - The gearing ratio increased to 54.1% as of September 30, 2022, compared to 46.6% as of March 31, 2022 [19]. - Current liabilities rose to HK$2,886,285, an increase from HK$2,513,670 as of March 31, 2022 [40]. - Total borrowings amounted to HK$1,717,282,000, an increase from HK$1,579,901,000 as of 31 March 2022 [109]. Cash Flow and Investments - Cash generated from operations was HK$486,005,000, leading to a net cash inflow from operating activities of HK$421,961,000, significantly higher than HK$1,387,000 in the previous year [42]. - The company experienced a net cash outflow from investing activities of HK$285,894,000, compared to a net cash outflow of HK$111,415,000 in the prior year [42]. - Financing activities resulted in a net cash outflow of HK$67,554,000, contrasting with a net cash inflow of HK$92,829,000 in the same period last year [42]. - The Group's net cash position improved to HK$25.1 million as of September 30, 2022, compared to a net debt position of HK$34.8 million as of March 31, 2022 [18]. Capital Expenditure - Total capital expenditure increased by approximately 71.9% to HK$81.4 million during the review period, primarily for the construction of a second factory in Vietnam and environmental projects [18]. - The balance of property, plant, and equipment as of September 30, 2022, is HK$1,304,649,000, down from HK$1,414,619,000 in 2021, reflecting a decrease of approximately 7.7% [86]. - Additions to property, plant, and equipment for the six months ended September 30, 2022, amounted to HK$81,425,000, an increase of 74.8% compared to HK$46,554,000 in 2021 [86]. Taxation - The Group recorded an income tax expense of approximately HK$38.5 million during the period, with an effective tax rate of 13.4%, up from 9.1% in the previous period [9][12]. - The current income tax expense for the period was HK$45,078,000, an increase from HK$34,145,000 in the same period last year [67]. Employee and Management - As of September 30, 2022, the Group employed 4,564 full-time employees, a decrease from 4,697 on March 31, 2022 [27]. - The Group's remuneration package includes salary, bonuses, allowances, and retirement benefits, with no significant changes in policy [27]. - Key management compensation for the six months ended September 30, 2022, was HK$42,903,000, a decrease from HK$48,616,000 in 2021 [130]. Market and Strategic Outlook - The management remains optimistic despite short-term financial performance challenges due to stabilized material costs [29]. - Geopolitical factors, trade barriers, and inflation present uncertainties and challenges for the manufacturing business [29]. - The company plans to focus on cost reduction, flexible treasury management, and improving production efficiency [29]. - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in market share by the end of the year [164]. Awards and Recognition - The Company received multiple awards for new products, including the "Textile and Apparel Brand Competitiveness Enterprises of China in 2022" by CNTAC in May 2022 [22]. - A superfine denier warp knitted peach skin velvet fabric was awarded the 2022 first class award of excellent fabric by CDPA in September 2022 [24]. - The development of a superfine high-stretch peach skin velvet fabric received the "Textile Light" Innovation Contribution Award of Knitted Underwear by CNTAC [25]. Risk Management - The Group's financial risk exposure includes market risk, credit risk, and liquidity risk [48]. - The Group's risk management policies have remained unchanged since March 31, 2022 [48].
互太纺织(01382) - 2023 - 中期财报