Economic Impact - The construction industry in Hong Kong has been negatively impacted by COVID-19, with the gross value of construction works performed by main contractors remaining stagnant compared to 2021[7]. - Hong Kong's real GDP contracted by 4.5% year-on-year in Q3 2022, following a 1.3% decline in Q2 2022, resulting in a total decline of 3.3% for the first three quarters of 2022[8]. - The fifth wave of COVID-19 has caused delays in the certification process, labor shortages, and increased raw material prices, affecting cash flow and project progress for construction contractors[9]. - The decrease in revenue and gross profit was mainly attributed to the impact of COVID-19 and stagnation in economic growth in Hong Kong[16]. Financial Performance - The Group's revenue decreased to approximately HK$206.0 million for the Reporting Period, a decline of approximately HK$130.3 million or 38.8% from approximately HK$336.3 million for the six months ended 30 September 2021[21]. - The overall gross profit decreased from approximately HK$42.1 million for the six months ended 30 September 2021 to approximately HK$5.1 million for the Reporting Period, representing a decrease of approximately 87.9%[21]. - The Group recorded a loss of approximately HK$3.7 million for the Reporting Period, compared to a profit of approximately HK$32.2 million for the six months ended 30 September 2021[28]. - The Group's overall gross profit margin decreased from 12.5% to 2.5% during the Reporting Period[21]. - The Group recorded income tax credit of approximately HK$20,000 for the Reporting Period, compared to income tax expenses of approximately HK$6.3 million for the six months ended 30 September 2021[27]. - The company reported a loss before income tax of HK$3,688 million for the six months ended September 30, 2022, compared to a profit of HK$38,512 million for the same period in 2021[70]. - The loss attributable to owners of the company for the period was HK$3.668 million, compared to a profit of HK$32.181 million in the previous year[70]. Cost Management - The Group's cost of sales decreased from approximately HK$294.2 million to approximately HK$200.9 million, a reduction of approximately HK$93.3 million or 31.7%[21]. - Administrative expenses increased from approximately HK$4.5 million to approximately HK$5.2 million, representing an increase of approximately HK$0.7 million or 16.4%[25]. - The total staff cost incurred by the company for the reporting period was approximately HK$31.7 million, compared to approximately HK$29.0 million for the same period in 2021[63]. - The total depreciation included in cost of sales was HK$6,024,000 for the six months ended September 30, 2022, compared to HK$6,396,000 in the previous year[142]. Cash Flow and Liquidity - The Group had total cash and cash equivalents of approximately HK$16.7 million as of 30 September 2022, down from approximately HK$42.6 million as of 31 March 2022[36]. - The company’s cash and cash equivalents decreased to HK$16,673,000 as of September 30, 2022, from HK$42,646,000 as of March 31, 2022, a decline of 60.94%[72]. - Operating cash flows before working capital changes were significantly impacted, with net cash used in operating activities amounting to HK$18,322,000 for the six months ended September 30, 2022[85]. - The company reported a net cash used in financing activities of HK$1,592,000, contrasting with a net cash inflow of HK$6,517,000 in the prior year[87]. Investments and Assets - The Group invested approximately HK$6.1 million in property, plant, and equipment during the Reporting Period, fully financed by proceeds from the Listing[43]. - Total non-current assets as of September 30, 2022, amounted to HK$67,991,000, a decrease of 1.46% from HK$68,993,000 as of March 31, 2022[72]. - The expected credit loss (ECL) allowance increased to HK$14,645,000 as of September 30, 2022, compared to HK$9,134,000 as of March 31, 2022, indicating a rise in potential credit risk[195]. - The total cash outflows for leases during the six months ended September 30, 2022, were HK$6,848,000, an increase from HK$5,146,000 for the same period in 2021[183]. Future Outlook - Despite challenges, the Group anticipates growth opportunities due to government initiatives, including increased transitional housing supply and the Northern Metropolis Development Strategy[10]. - The Group plans to leverage its solid track record and favorable government policies to explore different options amid ongoing challenges from COVID-19[19]. - The company plans to fully utilize the remaining proceeds by 31 March 2023[62]. - The utilization of proceeds for expanding manpower was temporarily postponed due to COVID-19 but has since resumed[62]. Corporate Governance - The Board resolved not to recommend the declaration of an interim dividend for the Reporting Period[51]. - There were no significant investments, material acquisitions, or disposals of subsidiaries during the Reporting Period[50]. - The condensed consolidated interim financial statements were approved for issue by the board of directors on 30 November 2022[91]. - The financial statements do not include all information required in annual consolidated financial statements and should be read in conjunction with the Group's annual financial statements for the year ended 31 March 2022[97].
广联工程控股(01413) - 2023 - 中期财报