Financial Performance - The company reported a net loss attributable to owners of approximately HKD 3,800,000 for the six months ended September 30, 2023, compared to a net loss of approximately HKD 51,400,000 for the same period in 2022, indicating a significant improvement [7]. - The net loss from continuing operations decreased to approximately HKD 2,500,000 for the interim period, down from approximately HKD 43,300,000 in the same period last year, representing a reduction of about 94.2% [23]. - The group recorded a total comprehensive loss attributable to owners of the company of approximately HKD 23,000,000 for the interim period, compared to a total comprehensive loss of approximately HKD 97,800,000 in the same period last year [27]. - The company reported a loss of HKD 3,776,000 for the period, contributing to a total comprehensive loss of HKD 22,987,000 [89]. - The total comprehensive loss attributable to the company's owners for the period is HKD 22,987,000, down from HKD 97,752,000 in the previous year, showing a significant reduction [80]. Revenue and Business Segments - Revenue from continuing operations decreased by approximately HKD 42,800,000 or 12.0% to about HKD 312,900,000 for the current period, down from approximately HKD 355,700,000 in the previous period [8]. - Concrete business revenue accounted for approximately 96.6% of total revenue, with a decrease of about HKD 39,600,000 or 11.6% to approximately HKD 302,200,000, primarily due to price reductions to increase market share and production interruptions caused by local lockdown measures in Hainan Province [11]. - The lending business revenue decreased by approximately HKD 3,200,000 or 22.9% to about HKD 10,700,000, attributed to a reduction in the average total loan portfolio from approximately HKD 251,500,000 to about HKD 212,800,000 [12]. - Revenue from the concrete business for the six months ended September 30, 2023, was HKD 302,187 thousand, a decrease of 11.6% from HKD 341,786 thousand in the same period of 2022 [104]. - Interest income from the lending business was HKD 10,696 thousand, down from HKD 13,877 thousand year-on-year, representing a decline of 22.3% [104]. Cost Management and Profitability - The cost of sales for continuing operations decreased by approximately HKD 38,100,000 or 14.7% to about HKD 220,700,000, mainly due to a decline in raw material prices [14]. - Gross profit for continuing operations decreased by approximately HKD 4,700,000 or 4.9% to about HKD 92,200,000, with the gross profit margin improving from 27.2% to 29.5% [15]. - The gross margin for the concrete business increased from approximately 24.3% to about 27.0%, driven by cost control measures and more efficient resource utilization [16]. - The company continues to focus on cost control and resource efficiency to enhance profitability in its concrete business [16]. - Sales and distribution expenses significantly decreased by approximately HKD 17,300,000 or 38.6% compared to the same period last year, mainly due to lower transportation costs from using more environmentally friendly electric vehicles [20]. Debt and Financial Position - As of September 30, 2023, the group had total debt of approximately HKD 356,600,000, down from approximately HKD 367,800,000 as of March 31, 2023 [28]. - The current ratio as of September 30, 2023, was 2.2, reflecting sufficient financial resources, compared to 2.1 as of March 31, 2023 [28]. - The group’s capital debt ratio was 37.9% as of September 30, 2023, slightly down from 38.1% as of March 31, 2023 [28]. - The company’s total liabilities related to trade payables and other payables were HKD 421,721,000 as of September 30, 2023, compared to HKD 450,703,000 as of March 31, 2023, indicating a reduction of approximately 6.4% [178]. Employee and Management Costs - The group employed a total of 190 employees as of September 30, 2023, a decrease from 200 employees as of September 30, 2022 [47]. - Employee costs during the interim period were approximately HKD 19.9 million, slightly up from HKD 19.8 million during the same period last year [47]. - The company’s management compensation for the six months ended September 30, 2023, was HKD 5,067,000, compared to HKD 5,318,000 for the same period in 2022 [193]. Corporate Governance and Compliance - The company is committed to maintaining good corporate governance practices and has complied with the Corporate Governance Code throughout the interim period [60]. - The company’s audit committee reviewed the interim financial statements, ensuring compliance with accounting standards [76]. Future Outlook and Strategic Initiatives - The company is exploring market expansion opportunities and new strategies to enhance its business performance moving forward [6]. - The company aims to explore new business opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area and Hainan Province, seeking partnerships with experienced operators [56]. - The concrete business remains the main growth driver, with a gradual recovery in performance despite a year-on-year revenue decline during the interim period [56]. - Due to rising loan default risks in the Hong Kong lending industry, the company plans to gradually reduce the scale of its loan portfolio in the upcoming fiscal year [57]. Impairment and Asset Management - The group recognized goodwill impairment losses of approximately HKD 5,600,000 related to its lending business during the interim period [26]. - The company incurred a total impairment loss of HKD 30,765,000 on goodwill as of September 30, 2023, with HKD 28,684,000 related to the concrete business [144]. - The company’s impairment assessment indicated that reasonable changes in key assumptions would not result in the carrying amount exceeding the recoverable amount for the concrete business [151]. Share Capital and Equity - The company completed a placement of 839,600,000 shares at a price of HKD 0.016 per share, raising approximately HKD 13,120,000 for repaying short-term debts [51]. - The board proposed a share consolidation of every ten existing shares into one share with a par value of HKD 0.1, changing the trading board lot from 2,000 to 20,000 shares [52]. - As of September 30, 2023, the total number of issued shares is 4,198,098,293 [66]. Cash Flow and Liquidity - For the six months ended September 30, 2023, the net cash used in operating activities was HKD (8,736) thousand, a significant improvement from HKD (26,852) thousand in the same period of 2022 [92]. - The total cash and cash equivalents decreased by HKD 27,641 thousand, contrasting with an increase of HKD 47,124 thousand in the prior year [92]. - The cash and cash equivalents at the end of the period were HKD 45,287 thousand, down from HKD 145,690 thousand at the end of the same period last year [92].
华盛国际控股(01323) - 2024 - 中期财报