Financial Performance - The unaudited consolidated revenue for 1H2023 decreased by approximately RMB155 million or 1% to approximately RMB12,059 million from RMB12,214 million in 1H2022[17]. - The unaudited consolidated net profit for 1H2023 decreased by approximately RMB526 million or 40% to approximately RMB778 million from RMB1,304 million in 1H2022[17]. - The total comprehensive income attributable to the owners of the parent decreased by approximately RMB414 million or 43% to approximately RMB546 million in 1H2023 from RMB960 million in 1H2022[17]. - Profit for the period decreased by approximately RMB526 million or 40% from RMB1,304 million in 1H2022 to approximately RMB778 million in 1H2023, primarily due to a decrease in gross profit[33]. - Profit before tax decreased to RMB 925,758, a decline of 42.4% compared to RMB 1,606,295 in the previous year[88]. - Basic and diluted earnings per share were 44.8 RMB cents, a decrease from 78.2 RMB cents in the same period of 2022[88]. - For the six months ended June 30, 2023, the group reported a profit of RMB 546,194,000, compared to RMB 959,576,000 for the same period in 2022, reflecting a decrease of approximately 43%[96]. Revenue Breakdown - Revenue from urea sales increased by approximately RMB80 million or 2% YoY, reaching approximately RMB3,518 million for 1H2023, driven by a 13% increase in sales volume despite a 10% decrease in average selling price[19]. - Revenue from vehicle urea solution sales decreased by approximately RMB65 million or 22% YoY to approximately RMB225 million for 1H2023, attributed to a 5% decrease in average selling price and a 19% decrease in sales volume[19]. - Revenue from compound fertilisers decreased by approximately RMB555 million or 15% YoY to approximately RMB3,208 million for 1H2023, due to a 5% decrease in sales volume and a 10% decrease in average selling price[20]. - Revenue from methanol sales decreased by approximately RMB184 million or 16% YoY to approximately RMB977 million for 1H2023, resulting from a 9% decrease in average selling price and an 8% decrease in sales volume[20]. - Revenue from melamine sales decreased by approximately RMB175 million or 30% YoY to approximately RMB412 million for 1H2023, primarily due to a 34% decrease in average selling price[21]. - Revenue from medical intermediate products increased by approximately RMB77 million or 35% YoY to approximately RMB299 million for 1H2023, supported by an 8% increase in average selling price and a 25% increase in sales volume[21]. - Sales revenue of liquid ammonia increased by approximately RMB186 million or 20% from RMB931 million in 1H2022 to approximately RMB1,117 million in 1H2023, driven by a 50% YoY increase in sales volume[23]. Cost and Profitability - Gross profit margin for urea sales decreased by approximately 6 percentage points from 35% in 1H2022 to 29% in 1H2023, primarily due to a larger decline in average selling price compared to cost[19]. - Gross profit margin for compound fertilisers decreased by approximately 4 percentage points to 12% in 1H2023 from 16% in 1H2022, mainly due to the decline in average selling price[20]. - Despite a gross profit margin of methanol decreasing to -1.7% in 1H2023, the marginal profit contribution reached 13% through improved self-conversion and product structure adjustments[21]. - Gross profit margin for melamine products decreased by approximately 22 percentage points from 58% in 1H2022 to 36% in 1H2023, driven by a significant drop in average selling price[21]. - The gross profit margin of medical intermediate products decreased by approximately 1 percentage point from 17% in 1H2022 to 16% in 1H2023, attributed to a 10% YoY increase in average raw material costs[22]. - The gross profit margin of liquid ammonia decreased by approximately 16 percentage points from 36% in 1H2022 to 20% in 1H2023, mainly due to a decrease in average selling price[23]. Expenses and Costs Management - Selling and distribution expenses decreased by approximately RMB18 million or 5% from RMB329 million in 1H2022 to RMB311 million in 1H2023[28]. - General and administrative expenses decreased by approximately RMB12 million or 2% from RMB652 million in 1H2022 to RMB640 million in 1H2023, despite increases in R&D and environmental protection expenses[29]. - Finance costs decreased by approximately RMB11 million or 3% from RMB335 million in 1H2022 to RMB324 million in 1H2023, mainly due to a decrease in average interest rates[33]. - Income tax expense decreased by approximately RMB154 million or 51% from RMB302 million in 1H2022 to RMB148 million in 1H2023, due to a decline in profits and preferential tax rates for high-tech enterprises[33]. Strategic Initiatives - The company adheres to a development strategy of "Fertiliser as foundation, fertiliser and chemical side by side" and an operating strategy of "low-cost and differentiation"[9]. - The Group aims to achieve high-efficiency, high-end, lean development as part of its core mission[7]. - The company is committed to enhancing key capabilities, including technological research and development and marketing differentiation[10]. - The strategic positioning principle emphasizes never deviating from the main course and establishing the position as "Industry No.1"[10]. - The Group anticipates a rebound in energy prices and global food prices, which will support fertilizer prices in the second half of the year[37]. - The Group plans to enhance innovation capabilities and promote new high-efficiency fertilizers to strengthen product competitiveness[37]. - The Group aims to balance project funding with operational cash flows to reduce both interest and liability indicators[37]. Market Conditions - The supply and demand situation in the fertiliser market trended soft, with coal prices under pressure, leading to a decline in fertiliser prices[16]. - The chemical product market remained in a downturn, with downstream demand recovery falling short of expectations, impacting the Group's results negatively[16]. - Future outlook remains positive with expectations of stable demand in the fertilizer and chemical markets, supporting ongoing production and sales efforts[108]. Corporate Governance and Compliance - The Company complied with all provisions of the Corporate Governance Code for the six months ended June 30, 2023[68]. - The Audit Committee reviewed the accounting principles and internal control matters for the interim results for the six months ended June 30, 2023[67]. - The company adopted new accounting standards effective from January 1, 2023, with no material impact on financial performance[107]. Shareholder Information - Directors and chief executives hold significant shares, with Mr. Liu Xingxu owning 415,877,999 shares, representing 33.86% of the company's issued share capital[40]. - Ms. Yan Yunhua holds 256,265,000 shares, accounting for 20.86% of the company's issued share capital[40]. - As of June 30, 2023, no other directors or chief executives had interests in the shares or debentures of the Company beyond those disclosed[42]. Employee and Management Compensation - For the six months ended June 30, 2023, the total compensation paid to key management personnel was RMB 26,071,000, an increase from RMB 25,805,000 in 2022, reflecting a growth of 1.03%[178]. - Directors' fees increased to RMB 825,000 in 2023 from RMB 525,000 in 2022, representing a significant increase of 57.14%[178]. - Performance-related bonuses for the period were RMB 22,650,000, up from RMB 22,150,000 in the previous year, indicating a growth of 2.26%[178].
中国心连心化肥(01866) - 2023 - 中期财报