Financial Performance - Revenue for the six months ended September 30, 2023, was HKD 175,617,000, a decrease of 9.1% compared to HKD 193,173,000 in the same period of 2022[6] - Gross profit for the same period was HKD 20,498,000, down 39.5% from HKD 33,858,000 year-on-year[6] - The company reported a loss before tax of HKD 85,379,000, compared to a loss of HKD 270,250,000 in the previous year, indicating a significant reduction in losses[6] - Total comprehensive loss for the period was HKD 75,749,000, compared to HKD 256,488,000 in the same period last year, reflecting improved financial performance[6] - The company reported a basic loss per share of HKD 0.07, compared to HKD 0.23 in the same period last year, showing a reduction in loss per share[6] - The company reported a net loss of HKD 80,580,000 for the six months ended September 30, 2023, compared to a net loss of HKD 271,761,000 for the same period in 2022, reflecting improved financial performance[14] - The total comprehensive loss for the six months ended September 30, 2023, was HKD 75,511,000, compared to a total comprehensive loss of HKD 258,086,000 for the same period in 2022, indicating a reduction in losses[14] - The loss attributable to the owners of the company decreased from HKD 271.8 million to HKD 80.6 million for the six months ended September 30, 2023, a reduction of approximately 70.3%[124] Expenses and Cost Management - Research and development expenses decreased to HKD 5,639,000 from HKD 30,203,000, a reduction of 81.3% year-on-year, indicating a shift in focus[6] - The company is focusing on cost reduction strategies, as evidenced by a significant decrease in selling and distribution expenses from HKD 47,904,000 to HKD 6,380,000[6] - Administrative expenses reduced by approximately 69.8% to HKD 44.5 million, attributed to lower costs related to social distancing measures and reduced professional fees[123] - Employee costs increased to HKD 41,229,000 in 2023 from HKD 36,403,000 in 2022, with director remuneration rising to HKD 2,066,000 from HKD 1,564,000[39] - The group incurred a depreciation expense of HKD 21,786,000 for property, plant, and equipment, down from HKD 25,181,000 in the previous year[39] Assets and Liabilities - The company's non-current assets decreased to HKD 350,312,000 as of September 30, 2023, down from HKD 400,559,000 as of March 31, 2023[9] - Current liabilities increased to HKD 1,208,608,000 from HKD 1,163,995,000, indicating a rise in financial obligations[11] - The total assets of the group decreased from HKD 562,497 as of March 31, 2023, to HKD 473,873 as of September 30, 2023, reflecting a decline of 15.7%[28] - The total liabilities of the group decreased slightly from HKD 1,447,359 to HKD 1,434,484, a reduction of 0.9%[29] - The total equity attributable to the owners of the company was HKD (952,355,000) as of September 30, 2023, compared to HKD (876,844,000) as of March 31, 2023, indicating a worsening equity position[11] Cash Flow and Financing Activities - The net cash generated from operating activities for the six months ended September 30, 2023, was HKD 23,175,000, a significant improvement compared to a net cash used of HKD 112,903,000 in the same period of 2022[16] - The company incurred a net cash outflow of HKD 30,245,000 from financing activities for the six months ended September 30, 2023, compared to a net cash inflow of HKD 130,456,000 in the same period of 2022[16] - The group has drawn new bank borrowings of HKD 2,789,000 during the period, compared to HKD 10,179,000 for the six months ended September 30, 2022[68] - As of September 30, 2023, the group repaid bank borrowings amounting to HKD 6,911,000, slightly down from HKD 7,180,000 for the same period last year[68] - The outstanding bank borrowings secured by collateral amounted to approximately HKD 26,633,000 as of September 30, 2023, down from HKD 30,174,000 as of March 31, 2023[68] Business Segments and Revenue Sources - The company’s revenue is derived from sales of anime derivative products, operation of indoor theme parks, and multimedia anime entertainment in Hong Kong, Japan, and China[22] - The company has three operating segments: anime derivative product sales, operation of indoor theme parks, and multimedia anime entertainment[22] - The segment profit for the animation derivative products was HKD 7,455, while the theme park segment reported a profit of HKD 1,195, and the multimedia segment incurred a loss of HKD 7,467, resulting in an overall segment profit of HKD 1,183[23] - Sales of anime derivative products dropped by about 22.4% to HKD 71.2 million, primarily due to a decrease in customer purchase orders[112] - Revenue from the establishment and operation of indoor theme parks increased by approximately 13.5% to HKD 104.4 million, with visitor numbers rising by about 22.6% to 0.38 million in Japan[113] Corporate Governance and Compliance - The company has established an audit committee consisting of three independent non-executive directors to review the financial performance for the six months ending September 30, 2023[153] - The company has fully complied with the corporate governance code throughout the reporting period, with the exception of the separation of roles between the chairman and CEO[154] - All directors confirmed compliance with the standard code of conduct for securities trading as of September 30, 2023[155] - The company maintains sufficient public float as per the listing rules as of the date of the interim report[143] Legal and Restructuring Activities - The company has received the necessary majority approval from creditors for the debt restructuring plan, leading to the cancellation of the hearing scheduled for July 17, 2023[85] - The company is currently in litigation with Maxx Capital regarding damages claims due to alleged breaches of repayment agreements, with a counterclaim submitted on July 27, 2023[86] - The company is actively negotiating with bondholders regarding a repayment schedule for approximately HKD 162 million in outstanding bonds and accrued interest[93] Future Outlook and Strategic Focus - The company continues to explore opportunities for market expansion and new product development in the multimedia and entertainment sectors[51] - The company plans to continue developing global indoor theme parks and online businesses, as well as new theme park products[132] - The company is exploring a potential investor for share subscription and has deposited the escrow funds[132] - The company aims to enhance user experience in theme parks and develop new digital content following the completion of construction projects[108]
华夏文化科技(01566) - 2024 - 中期财报