Financial Performance - Revenue for the six months ended December 31, 2023, was HKD 200,183,000, a decrease of 25.7% compared to HKD 269,864,000 in the same period of 2022[2] - Gross profit for the same period was HKD 49,888,000, down 31.8% from HKD 73,049,000 year-on-year[2] - The company reported a loss before tax of HKD 35,503,000, compared to a loss of HKD 7,640,000 in the previous year, indicating a significant increase in losses[2] - Total comprehensive loss for the period was HKD 31,179,000, compared to a loss of HKD 23,212,000 in the same period last year[3] - Basic and diluted loss per share was HKD 4.64, compared to HKD 0.92 in the previous year, reflecting a substantial decline in earnings[3] - The group reported a loss before tax of HKD 35,503,000 for the six months ended December 31, 2023, compared to a loss of HKD 7,640,000 in 2022[22] - The loss attributable to the company's owners for the six months ended December 31, 2023, was HKD 31,677,000, compared to a loss of HKD 6,261,000 in the previous year[37] - Basic loss per share for the six months ended December 31, 2023, was HKD 0.0464, compared to HKD 0.0092 for the same period in 2022[37] Assets and Liabilities - The company had total assets of HKD 2,701,064,000 as of December 31, 2023, compared to HKD 2,697,577,000 as of June 30, 2023[4] - Current liabilities exceeded current assets by HKD 222,005,000, indicating a negative net working capital position[5] - The company reported bank loans of HKD 1,045,997,000, with approximately HKD 695,121,000 due within one year[7] - The company’s equity attributable to owners was HKD 2,052,450,000, a decrease from HKD 2,079,737,000 as of June 30, 2023[5] - The company's investment properties had a carrying amount of HKD 2,078,220,000 as of December 31, 2023, compared to HKD 2,078,100,000 as of June 30, 2023[30] - The carrying amount of development properties increased to HKD 668,039,000 as of December 31, 2023, from HKD 657,777,000 as of June 30, 2023[31] Revenue Segments - Revenue from the jewelry business for the six months ended December 31, 2023, was HKD 187,901,000, a decrease of 28.3% compared to HKD 262,237,000 in 2022[18] - Jewelry segment revenue decreased by approximately HKD 74,336,000 or 28.3% to HKD 187,901,000 for the six months ended December 31, 2023, compared to HKD 262,237,000 in the previous period[40] - The jewelry business recorded a segment loss of HKD 8,804,000, down from a profit of HKD 15,599,000 in the prior period[40] - The decline in jewelry sales was attributed to a weak macroeconomic environment and high inventory levels among overseas retailers, impacting the company's performance[38] Expenses and Financial Costs - Interest expenses on bank loans increased to HKD 33,083,000 in 2023 from HKD 18,886,000 in 2022, representing a 75.5% increase[21] - The group’s financial costs totaled HKD 25,122,000 for the six months ended December 31, 2023, compared to HKD 15,799,000 in 2022, representing a 58.8% increase[21] - The increase in financial costs due to rising interest rates in Hong Kong amounted to approximately HKD 9,323,000, compared to HKD 15,799,000 in the previous period[37] - The cost of goods sold for the period was HKD 150,295,000, down from HKD 196,815,000 in the previous year, indicating a reduction of 23.6%[22] - The group incurred unallocated expenses of HKD 1,080,000 in 2023, compared to HKD 1,400,000 in 2022, reflecting a decrease of 22.9%[18] - Depreciation expenses for property, plant, and equipment were HKD 2,286,000 in 2023, up from HKD 1,967,000 in 2022, marking a 16.2% increase[22] Cash Flow and Capital Management - As of December 31, 2023, the company's cash and cash equivalents decreased to HKD 61,637,000 from HKD 97,101,000 as of June 30, 2023[49] - The company's net debt ratio was 0.3305 as of December 31, 2023, compared to 0.3215 on June 30, 2023[49] - The group has not changed its capital structure as of December 31, 2023, and management does not foresee any need for changes under current financial conditions[53] Corporate Governance and Risk Management - The company has complied with all applicable code provisions of the Corporate Governance Code during the reporting period, with some deviations noted[58] - The board has not established an internal audit function, believing that the current organizational structure provides sufficient internal control and risk management[60] - The audit committee, composed of five independent non-executive directors, has reviewed the unaudited consolidated interim financial statements for the six months ending December 31, 2023[62] - The group has maintained a conservative approach to financial risk management, with market risks kept at a minimum level[56] - The group has entered into forward foreign exchange contracts to mitigate exchange rate risks related to GBP fluctuations[56] Employee and Operational Management - The group employed approximately 478 employees as of December 31, 2023, down from 502 employees as of June 30, 2023[54] - The company is focused on optimizing operational processes and implementing cost management measures to enhance overall efficiency and profitability[44] - The company has not recorded any revenue from its mining segment during the review period due to minimal operational scale and no production activities[43] - The group has adopted a new share option scheme since December 22, 2020, with 12,200,000 shares remaining unexercised under the previous scheme as of December 31, 2023[55] - The company has adopted a share option plan to attract and retain qualified employees, including directors[54] Dividend Policy - The company did not recommend any interim dividend for the six months ended December 31, 2023[27] - The company does not recommend any interim dividend for the six months ended December 31, 2023, consistent with the previous year[47] Property Development - The company holds a 90% interest in a site in Kowloon, which has been developed into a 25-story residential project with a total floor area of approximately 29,147 square feet, named "Hengpo," and obtained an occupancy permit in July 2023[41] - Rental income from properties increased by HKD 4,988,000 to HKD 10,383,000, compared to HKD 5,395,000 in the same period last year, due to more units being leased at the Henghui Center[40] - The company remains cautiously optimistic about the gradual recovery of the property market, despite challenges such as high interest rates and geopolitical tensions[46]
恒和集团(00513) - 2024 - 中期业绩