Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 155.0 million, a decrease of 56.5% compared to HKD 356.4 million in the same period of 2021[7]. - Gross profit for the same period was HKD 11.2 million, down 17.6% from HKD 13.6 million year-on-year[7]. - The company reported a loss before tax of HKD 117.5 million, compared to a profit of HKD 7.2 million in the previous year, indicating a significant reversal in performance[7]. - The group recorded a net loss of approximately HKD 117,500,000 (2021: net profit: HKD 7,200,000) and an LBITDA of approximately HKD 46,200,000 (2021: EBITDA: HKD 83,200,000) during the period[30]. - Total comprehensive loss for the period was HKD 100,379 thousand, significantly worse than the comprehensive income of HKD 3,655 thousand in the prior year[106]. - Basic and diluted loss per share was HKD (7.7) cents, compared to earnings of HKD 0.5 cents per share in the same period last year[106]. - The company reported a loss of approximately HKD 117.5 million for the six months ended June 30, 2022, compared to a profit of HKD 7.2 million for the same period in 2021[122]. Operational Challenges - The production facilities in Shanghai were shut down for nearly two months due to COVID-19 restrictions, impacting sales volume and revenue of sweetener products[13]. - The company anticipates continued challenges in the operating environment for the second half of 2022 due to high corn prices and expected softening of sugar prices[25]. - The company is facing ongoing challenges due to the COVID-19 pandemic, with expectations of continued high corn prices and a competitive sweetener market in the second half of 2022[87]. - The company has not reported any significant new strategies or product developments during the review period[104]. - The company is closely monitoring the financial impact of the pandemic and market conditions to ensure the timely recovery of its subsidiaries' operations[87]. Debt and Financial Restructuring - The company is actively seeking to resolve its debt issues through a restructuring plan, with expectations to complete part of the plan by the end of the year[16]. - The company is actively negotiating a debt restructuring plan with banks and creditors to improve its financial situation[124]. - The total amount of loans and interest owed to the Agricultural Bank of China was approximately RMB 1.4 billion, which is being transferred to China Cinda Asset Management for RMB 414.7 million[124]. - The company has entered into a subscription agreement to issue 305,517,200 new ordinary shares at a subscription price of HKD 0.1 per share, aiming to raise approximately HKD 30 million for operational expenses and debt repayment[90]. - The company plans to allocate approximately HKD 10 million for repaying bank loans and other payables, and HKD 20 million for purchasing corn and other operational expenses[90]. Market Conditions - The outlook for the 2022/23 harvest year anticipates an increase in sugar production, although sugar prices are expected to decline[16]. - Corn prices are projected to remain high throughout 2022, affecting the company's upstream operations[16]. - The international corn price reached a peak of $8.18 per bushel in April 2022, equivalent to RMB 2,129 per ton, and was $7.44 per bushel (RMB 1,962 per ton) as of June 30, 2022[22]. - Global sugar production for the 2021/22 season was 174 million tons, with consumption estimated at 173.8 million tons, leading to rising international sugar prices[24]. - The international sugar price rose to $0.1870 per pound (RMB 2,769 per ton) by the end of June 2022, up from $0.1763 per pound (RMB 2,517 per ton) a year earlier[24]. Shareholder and Governance - The management team expressed gratitude towards shareholders, creditors, business partners, and government departments for their support during challenging times[16]. - The company did not declare an interim dividend for the period[7]. - The company did not recommend any dividend distribution for the current period, consistent with the previous period[65]. - The company has complied with all corporate governance codes as per the Stock Exchange Listing Rules during the reporting period[73]. - The Audit Committee reviewed the interim performance and financial statements for the period without any disagreements with management[76]. Financial Position - The company's total assets less current liabilities showed a net liability of HKD (550,645) thousand, worsening from HKD (446,001) thousand at the end of 2021[109]. - The current ratio and quick ratio were approximately 0.1 as of June 30, 2022, down from 0.2 as of December 31, 2021, indicating a decrease in current assets[51]. - The debt-to-asset ratio increased to approximately 112.2% as of June 30, 2022, compared to 99.2% on December 31, 2021, reflecting a higher level of debt relative to total assets[51]. - The company has secured financial support from Jilin Agricultural Investment Group, with a net asset value of approximately RMB 2.13 billion as of June 30, 2022, to ensure operational continuity[133]. - The company is facing significant uncertainties regarding its ability to continue as a going concern due to its financial losses and liabilities[122].
大成糖业(03889) - 2022 - 中期财报