Financial Performance - Revenue for the six months ended June 30, 2023, was $1,009 million, a decrease of 19% compared to $1,242 million for the same period in 2022[2] - Net profit for the six months ended June 30, 2023, was $74 million, down from $76 million in the same period of 2022, representing a decline of 1.8%[2] - Gross profit for the six months ended June 30, 2023, was $192.7 million, down from $229.5 million in 2022, reflecting a decrease of 16%[4] - The basic earnings per share attributable to the owners of the company for the six months ended June 30, 2023, was $2.58, slightly down from $2.64 in the same period of 2022[5] - The company reported a total comprehensive income of $66.5 million for the six months ended June 30, 2023, compared to $50.6 million in 2022, reflecting an increase of 31.5%[4] - The group reported a pre-tax profit of $90,279 thousand for the six months ended June 30, 2023, compared to $92,167 thousand for the same period in 2022, reflecting a slight decline of 2.1%[19][22] - For the six months ended June 30, 2023, the company reported a pre-tax profit of $73,642,000, a decrease from $75,370,000 in the same period of 2022, representing a decline of approximately 2.3%[31] - Total revenue for the first half of 2023 was $1,009,191 thousand, a decrease of 18.7% compared to $1,241,643 thousand in the same period last year[46][45] Dividends - The board declared an interim dividend of 5.0 HKD per share, consistent with the interim dividend declared in 2022[2] - The company declared an interim dividend of 5.0 HK cents per ordinary share, maintaining the same amount as the previous year[43] - The board has declared an interim dividend of HKD 0.05 per ordinary share, approximately USD 0.006, to be paid on September 20, 2023[67] Expenses and Costs - Research and development expenses for the six months ended June 30, 2023, were $13.9 million, a reduction from $17.2 million in the same period of 2022, indicating a decrease of 19%[4] - The group incurred administrative expenses of $85,379 thousand and research and development expenses of $13,901 thousand for the six months ended June 30, 2023[19] - Total employee costs for the six months ended June 30, 2023, amounted to $268,705,000, down 13.3% from $310,031,000 in the prior year[26] - The cost of goods sold, including inventory write-downs, was $816,536,000 for the six months ended June 30, 2023, compared to $1,012,141,000 in 2022, reflecting a decrease of 19.3%[26] - The income tax expense for the six months ended June 30, 2023, was $16,159,000, slightly down from $16,632,000 in the same period of 2022[28] - Interest expenses related to bank borrowings increased to $2,234,000 in the first half of 2023, compared to $1,346,000 in the same period of 2022, marking a rise of 65.8%[26] - The depreciation of property, plant, and equipment for the six months ended June 30, 2023, was $34,189,000, a decrease from $37,070,000 in the previous year, indicating a reduction of 7.6%[26] Assets and Liabilities - Total assets as of June 30, 2023, amounted to $1,975.7 million, an increase from $1,894.9 million as of December 31, 2022[6] - Cash and cash equivalents as of June 30, 2023, were $472.9 million, compared to $455.1 million as of December 31, 2022, showing an increase of 3.9%[6] - The company’s total liabilities, including current and non-current, amounted to $372,848 thousand as of June 30, 2023, compared to $340,603 thousand as of December 31, 2022[37] - Trade receivables, net of expected credit loss provisions, amounted to $79,147 thousand as of June 30, 2023, down from $111,043 thousand as of December 31, 2022[32] - The company reported trade payables of $158,922 thousand as of June 30, 2023, an increase from $112,742 thousand as of December 31, 2022[36] - The inventory level was $3,775 thousand as of June 30, 2023, compared to $3,988 thousand as of December 31, 2022[40] Revenue Breakdown - The external sales breakdown for the six months ended June 30, 2023, included $285,334 thousand from leisure wear, $254,127 thousand from sports and outdoor wear, $221,395 thousand from denim, $176,258 thousand from intimate apparel, and $72,077 thousand from knitwear[19] - Revenue from the Asia-Pacific region for the six months ended June 30, 2023, was $381,530 thousand, a decrease from $400,288 thousand in the same period of 2022, representing a decline of approximately 4.4%[25] - Revenue from the United States for the six months ended June 30, 2023, was $359,879 thousand, down from $538,979 thousand in the same period of 2022, indicating a significant decline of about 33.3%[25] - Revenue from Europe for the six months ended June 30, 2023, was $202,739 thousand, a decrease from $235,054 thousand in the same period of 2022, representing a decline of approximately 13.8%[25] - Revenue from leisurewear was $285,334 thousand (28.3% of total revenue), while sports and outdoor apparel generated $254,127 thousand (25.2%)[45] Market and Operational Challenges - The company experienced a significant decline in apparel imports to the U.S., with a 30% decrease year-over-year, and women's apparel saw a larger drop of 34%[41] - The company is facing challenges in the apparel industry due to high inventory levels and a slowdown in purchasing speed[41] - The company anticipates a rebound in sales during the second half of the year, driven by back-to-school and holiday factors, despite a significant decline in the first half[66] - The company aims to maintain strict cost control while improving profit margins through the expected sales rebound[66] Sustainability and Social Responsibility - The company aims to achieve net-zero emissions by 2050 and has set a mid-term target to reduce total greenhouse gas emissions by 35% by 2030[61] - The company has developed a comprehensive net-zero roadmap, including energy efficiency measures and renewable energy initiatives, targeting a 35% reduction in emissions at each factory[62] - The total capacity of the company's rooftop solar photovoltaic systems has increased nearly threefold since the end of 2021, currently reaching approximately 10 terawatts[62] - The company has launched the Vibrant Denim collection, utilizing natural mineral powder for dyeing and water-saving washing techniques, replacing traditional methods that consume more water[62] - The company has implemented a circular economy model, with two factories achieving 100% waste diversion from landfills[63] - The company has adopted water-saving dyeing equipment in its Vietnam factory, reducing water usage by 30% to 50% compared to older models[63] - Approximately 70% of the company's employees are women, with over 54,000 women empowered through the CAREii program to improve gender equality[64] - The company promotes employee engagement through various platforms, allowing workers to express their opinions without fear of retaliation[64] - The company participates in community initiatives, including tree planting and energy conservation campaigns, contributing skills and resources to local efforts[65] Corporate Governance and Risk Management - The company is committed to maintaining effective risk management and internal control systems, with the board satisfied with their effectiveness[75] - The Audit Committee is satisfied with the current network security measures and has planned a series of tests for the fourth quarter of this year[76] - A complete internal audit team has been established in Vietnam, which has commenced compliance reviews[76] - The Audit Committee continues to review the company's risks as a regular agenda item in meetings[76] - The company has a written risk assessment procedure for identifying, evaluating, and managing significant risks[76] - The Audit Committee is pleased with the effectiveness of the risk management and internal control systems[76] Accounting Policies - The financial statements are presented in US dollars, which is also the functional currency of the company[9] - The financial statements were prepared in accordance with International Accounting Standards (IAS) 34, "Interim Financial Reporting"[9] - The company applied new International Financial Reporting Standards (IFRS) and amendments effective from January 1, 2023, without significant impact on financial position or performance[11] - The application of IFRS 12 regarding deferred tax assets and liabilities related to single transactions has been adopted, affecting accounting policies[13] - The group confirmed deferred tax assets and liabilities related to leasing transactions under IFRS 12, limited to instances where taxable profits are available[13] - The transition to the new accounting policy for leasing transactions was applied retrospectively from January 1, 2022[14] - The company’s accounting policies and methods remain consistent with those used in the preparation of the annual consolidated financial statements for the year ended December 31, 2022[10] - The financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[10] - There was no significant impact on the financial statements from the application of the new IFRS and amendments during the reporting period[11]
晶苑国际(02232) - 2023 - 中期业绩