Financial Performance - For the six months ended June 30, 2022, the company's revenue from interior decoration business decreased by HKD 403.2 million or 16.7% to HKD 2,006.3 million, compared to HKD 2,409.5 million for the same period in 2021[25]. - The group's revenue decreased by HKD 418.7 million or 17.0% to HKD 2,039.6 million compared to the previous period[30]. - Gross profit fell by HKD 38.3 million or 12.3% to HKD 272.4 million, with a slight increase in gross margin to 13.4% from 12.6%[30]. - The interior decoration business generated a gross profit of HKD 271.9 million, down HKD 52.3 million or 16.1% year-on-year, while the gross margin slightly increased to 13.6%[26]. - The net profit for the period decreased by HKD 59.5 million or 38.2% to HKD 96.1 million compared to the previous period[32]. - Basic and diluted earnings per share were HKD 0.0445, down HKD 0.0276 or 38.3% year-on-year[33]. - Revenue for the six months ended June 30, 2022, was HKD 2,039,646,000, a decrease of 17.0% compared to HKD 2,458,320,000 for the same period in 2021[84]. - Gross profit for the same period was HKD 272,369,000, down 12.3% from HKD 310,655,000 in 2021[84]. - The net profit attributable to the company's owners for the six months ended June 30, 2022, was HKD 96,052,000, a decrease of 38.3% from HKD 155,604,000 in 2021[84]. Economic Environment - The Hong Kong economy contracted by 4.0% year-on-year in the first quarter of 2022, reversing the growth trend of the previous four quarters[20]. - Macau's GDP fell by 8.9% year-on-year in the first quarter of 2022, reflecting weak overall demand due to the ongoing impact of the COVID-19 pandemic[21]. - The average occupancy rate of hotel rooms in Macau decreased by 4.1% year-on-year to 40.8% in the first quarter of 2022[21]. - The construction value of major contractors in Hong Kong decreased by 1.1% year-on-year to HKD 55.9 billion in the first quarter of 2022[20]. - The Chinese government has implemented 33 measures to stabilize the economy, which is expected to lead to a recovery in the second half of 2022[53]. Project and Contract Information - The total contract value of ongoing and signed but not yet started projects as of June 30, 2022, amounted to HKD 9,728.8 million, with remaining work value of HKD 6,037.8 million[25]. - The company completed a total of six interior decoration projects during the period, with a total contract value of HKD 599.0 million, of which HKD 67.3 million was recognized as revenue[25]. - The company holds 65 projects on hand as of June 30, 2022, including 25 in Hong Kong, 2 in Macau, 37 in China, and 1 in Singapore, each with a contract value of no less than HKD 50.0 million[25]. - External revenue from interior decoration projects in Macau reached HKD 461,003,000, while revenue from projects in China was HKD 980,254,000[125]. - The total segment revenue for the six months ended June 30, 2022, was HKD 2,143,262,000 after inter-segment eliminations[125]. Financial Position and Assets - As of June 30, 2022, the group's net current assets were HKD 2,450.3 million, a decrease of HKD 70.3 million from HKD 2,520.6 million on December 31, 2021[39]. - The group's total debt to equity ratio was 1.4% as of June 30, 2022, down from 2.6% on December 31, 2021, primarily due to a reduction in bank borrowings[41]. - The group's bank borrowings decreased to HKD 44.4 million as of June 30, 2022, from HKD 84.5 million on December 31, 2021[39]. - The company's total assets as of June 30, 2022, were HKD 5,445,490,000, compared to HKD 6,322,246,000 as of December 31, 2021, indicating a decrease of 13.8%[87]. - The company's equity attributable to owners was HKD 3,110,927,000 as of June 30, 2022, down from HKD 3,227,338,000 at the end of 2021, a decline of 3.6%[87]. Cash Flow and Dividends - The company paid dividends totaling HKD 151,075,000 during the period, down from HKD 172,657,000 in the previous year, indicating a strategic adjustment in cash distribution[93]. - The company's cash and cash equivalents decreased by HKD 499,024,000 during the six months ended June 30, 2022, compared to a decrease of HKD 631,778,000 in the same period of 2021, showing a reduction in cash outflow[93]. - Net cash used in operating activities was HKD (352,619,000), an improvement from HKD (417,932,000) in the prior year, reflecting better operational efficiency[93]. - The company does not recommend the payment of an interim dividend for the period[56]. Employee and Operational Costs - The total employee costs increased by HKD 29.7 million or 14.9% to HKD 229.7 million for the period, attributed to a 13.8% rise in average employee numbers[49]. - The total employee costs, including directors' remuneration, increased to HKD 229,686,000 for the six months ended June 30, 2022, compared to HKD 200,037,000 in the same period of 2021, reflecting a rise of approximately 14.8%[157]. Risk Management and Compliance - The group will continue to enhance its collection measures and adopt a prudent credit policy to mitigate credit risk, despite facing delays in project settlements from property developers[46]. - The group has no significant contingent liabilities as of June 30, 2022, indicating a stable risk profile[43]. - The internal control committee reviewed the group's compliance with sanctions laws and found that all guidelines and procedures were effectively followed during the period[75]. Shareholder Information - As of June 30, 2022, the company has issued 2,158,210,000 shares[65]. - Liu Choi Wong holds a 59.38% stake in the company through controlled entities[58]. - The largest shareholder, Reach Glory, also holds a 59.38% stake in the company[64]. - The company has not granted any share options or exercised any during the reporting period[71].
承达集团(01568) - 2022 - 中期财报