Financial Performance - Revenue increased by 9.7% to HK$2,033.1 million for the period, compared to HK$1,853.8 million in 2021, driven by strong performance in both Hong Kong and Mainland China operations [17]. - Gross profit rose by 7.9% to HK$638.9 million, with a gross profit margin of 31.4%, down from 31.9% in the previous year, primarily due to rising raw material prices [17]. - Profit attributable to owners decreased by 3.5% to HK$164.9 million, resulting in a net profit margin of 8.1%, down from 9.2% in 2021 [18]. - Adjusted EBITDA grew by 8.4% to HK$305.1 million, with an Adjusted EBITDA margin of 15.0%, slightly down from 15.2% in the previous year [20]. - Total comprehensive income for the period was HK$78,343, a significant decrease from HK$210,746 in the same period last year [71]. - Profit for the period was HK$182,697, a decrease of 2.4% from HK$187,509 in the same period last year [71]. - Profit attributable to the owners of the Company for the six months ended June 30, 2022, was HK$164,908,000, a decrease of 3.9% from HK$170,862,000 for the same period in 2021 [124]. Market and Operational Developments - Nissin Foods reported interim results for the six months ended June 30, 2022, amid a gradual return to normalcy post-COVID-19 [10]. - The company launched its first membership program, "Nissin Foodium," in Hong Kong and Mainland China, enhancing customer engagement and offering exclusive benefits [3]. - The "Nissin Foodium" program also serves as an e-commerce platform in Mainland China, allowing direct communication with consumers to understand their preferences [4]. - The company launched a higher-quality noodle series using 100% Hokkaido wheat flour in the Hong Kong market to enhance product offerings [15]. - The company launched new flavors under the RAOH, Nissin UFO, and FUKU brands, including spicy variants to enhance the instant noodles portfolio [28]. - The frozen food segment showed strong demand as customers preferred to stay home, benefiting from its convenience and easy-to-cook characteristics [29]. - The company is focused on improving production processes and capabilities to strengthen overall competitiveness and ensure sustainable growth [2]. Challenges and Risks - Disruptions in the global supply chain and geopolitical uncertainties have led to skyrocketing prices for key raw materials, particularly wheat flour and palm oil [13]. - The price of palm oil reached a historical high due to export bans from countries like Indonesia and India, exacerbating supply-demand imbalances [13]. - The pandemic's impact on supply chains and raw material prices, particularly for wheat flour and palm oil, continues to pose challenges [22]. - The management acknowledges the ongoing challenges posed by the pandemic while adapting to changing market conditions [12]. - The company experienced production and logistics disruptions due to the fifth wave of the pandemic, impacting overall performance [31]. Financial Position and Investments - The total assets of the Group as of June 30, 2022, amounted to HK$5,001.9 million, a decrease from HK$5,259.6 million as of December 31, 2021 [38]. - The Group's working capital was HK$1,952.7 million, with a current ratio of 3.0 as of June 30, 2022 [38]. - The Group maintained a healthy financial position with net cash of approximately HK$1,687.3 million and no external borrowing, resulting in a gearing ratio of nil [38]. - Capital expenditure during the review period was HK$81.5 million, down from HK$138.0 million in 2021 [38]. - The Group had a capital commitment for property, plant, and equipment acquisition amounting to HK$97.2 million as of June 30, 2022 [39]. - The Group's net proceeds from the Global Offering amounted to approximately HK$910.8 million, with HK$125.3 million utilized and HK$805.2 million remaining unutilized as of June 30, 2022 [42]. - The Company plans to enhance research and development capabilities, allocating 5% of net proceeds, which amounts to HK$45.5 million, with no funds utilized to date [42]. Strategic Initiatives - The company aims to pursue a premiumisation strategy to provide high-quality food products to customers [15]. - The Company is cautiously optimistic about long-term business development despite uncertainties in the global inflation risk and raw material costs [42]. - The Company plans to pursue continuous revenue and profit growth in Hong Kong and China over the next few years, leveraging its diversified product portfolio and brand recognition [47]. - The Company is expanding its geographical business strategy in Mainland China, focusing on new markets in the Western and Northern regions [35]. - The company continues to explore new brands and expand distribution channels to enhance its product portfolio [31]. Corporate Governance - The company is committed to maintaining good corporate governance practices, with the roles of chairman and CEO currently held by the same individual, Mr. Kiyotaka Ando [50]. - The Audit Committee, consisting of three independent non-executive directors, reviewed the unaudited interim results for the six months ended June 30, 2022 [54]. - The company has complied with the Model Code for Securities Transactions by Directors during the six months ended June 30, 2022 [51]. - The report on the financial statements was prepared by Deloitte, indicating the company's commitment to transparency and compliance [63]. Employee and Shareholder Information - The total number of employees as of June 30, 2022, was approximately 3,570, a slight decrease from 3,590 as of December 31, 2021 [48]. - Employee costs (excluding directors' remuneration) amounted to approximately HK$329.7 million for the period [48]. - The company did not declare any interim dividend for the six months ended June 30, 2022, consistent with the previous year [49]. - The company repurchased a total of 4,099,000 shares at an aggregate consideration of approximately HK$26.0 million during the six months ended June 30, 2022, compared to HK$65.2 million in 2021 [55].
日清食品(01475) - 2022 - 中期财报