华大酒店(00201) - 2023 - 中期业绩

Financial Performance Overview Condensed Consolidated Statement of Profit or Loss The company reported a loss attributable to owners of HK$17,920 thousand for the six months ended June 30, 2023, a reversal from profit in the prior year due to decreased revenue and higher costs | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | (Loss) Profit Attributable to Owners of the Company | (17,920) | 105,958 | | (Loss) Earnings Per Share (HK cents) | (0.20) | 1.18 | | Total Revenue | 177,953 | 275,401 | | (Loss) Profit Before Tax | (18,347) | 128,551 | | (Loss) Profit for the Period | (17,861) | 106,005 | Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for the six months ended June 30, 2023, turned positive from a prior-year loss, driven by favorable exchange differences from foreign operations | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | (Loss) Profit for the Period | (17,861) | 106,005 | | Fair Value (Loss) Gain on Equity Investments at Fair Value Presented in Other Comprehensive Income | 9,313 | (7,198) | | Exchange Differences on Translation of Foreign Operations | 53,257 | (131,077) | | Other Comprehensive Income (Expense) for the Period | 62,570 | (138,275) | | Total Comprehensive Income (Expense) for the Period | 44,709 | (32,270) | Condensed Consolidated Statement of Financial Position As of June 30, 2023, total assets less current liabilities and total equity slightly increased, while net current liabilities decreased compared to December 31, 2022 | Metric | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Non-current Assets | 5,003,416 | 4,971,785 | | Current Assets | 284,319 | 293,723 | | Current Liabilities | 702,804 | 728,990 | | Net Current Liabilities | (418,485) | (435,267) | | Total Assets Less Current Liabilities | 4,584,931 | 4,536,518 | | Equity Attributable to Owners of the Company | 4,270,011 | 4,225,361 | | Total Equity | 4,277,473 | 4,232,764 | | Non-current Liabilities | 307,458 | 303,754 | Notes to the Financial Statements Basis of Preparation These condensed consolidated financial statements adhere to HKAS 34 and Listing Rules Appendix 16, with an unqualified auditor's report - These condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix 16 to the Listing Rules of The Stock Exchange of Hong Kong Limited[15] - The company's auditor has issued an unqualified auditor's report on the consolidated financial statements[37] Significant Accounting Policies Accounting policies and calculation methods remain consistent with the prior year, and new HKFRSs had no significant impact on financial performance or position - The accounting policies and methods of computation adopted in the unaudited condensed consolidated financial statements for the six months ended June 30, 2023, are consistent with those presented in the Group's annual financial statements for the year ended December 31, 2022[38] - The application of new and revised Hong Kong Financial Reporting Standards during the period had no significant impact on the financial position and performance and/or disclosures in the condensed consolidated financial statements of the Group for the current and prior periods[8] Revenue Analysis Total revenue decreased by 35% year-on-year, mainly due to a 38% drop in hotel operations revenue as room rates fell below quarantine service levels | Revenue Source | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Operations Revenue | 159,513 | 256,622 | -38% | | Property Rental Income | 18,395 | 18,737 | -2% | | Dividend Income | 45 | 42 | +7% | | Total Revenue | 177,953 | 275,401 | -35% | - The decrease in hotel revenue was due to lower hotel room rates compared to the period when quarantine hotel services were provided for the six months ended June 30, 2022[49] Segment Information The Group's operating segments are hotel services, property investment, and securities investment, with hotel services experiencing significant declines in revenue and results - The Group's operating and reportable segments include hotel services, property investment, and securities investment[20][79] | Segment | Segment Revenue for the Six Months Ended June 30, 2023 (HK$ thousand) | Segment Revenue for the Six Months Ended June 30, 2022 (HK$ thousand) | Segment Results for the Six Months Ended June 30, 2023 (HK$ thousand) | Segment Results for the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 159,513 | 256,622 | 26,262 | 127,506 | | Property Investment | 18,395 | 18,737 | 18,395 | 18,737 | | Securities Investment | 45 | 42 | 45 | 42 | | Total | 177,953 | 275,401 | 44,702 | 146,285 | Income Tax Income tax for the period transitioned from an expense to a credit, driven by Hong Kong deferred tax reversal and reduced current taxes in Hong Kong and China | Income Tax Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 4,669 | 15,975 | | China Current Tax | 13 | 209 | | UK Current Tax | 2,722 | 3,108 | | Over-provision in Prior Years | - | (40) | | Hong Kong Deferred Tax | (7,890) | 3,294 | | Total Income Tax (Credit) Expense | (486) | 22,546 | - Hong Kong profits tax is recognized based on management's estimated weighted average annual income tax rate of 16.5% for the entire financial year[96] (Loss) Profit for the Period The company reported a loss for the period, influenced by property, plant and equipment depreciation, increased bank interest income, and disposal gains | Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-use Assets | 394 | 419 | | Depreciation of Property, Plant and Equipment | 35,426 | 38,247 | | Interest on Bank Deposits | (3,152) | (204) | | (Gain) Loss on Disposal of Property, Plant and Equipment | (7) | 449 | Dividend Policy The Board decided against an interim dividend for the six months ended June 30, 2023, citing slow tourism recovery, lower room rates, rising operating costs, and hotel maintenance expenses - The Board resolved not to declare or recommend an interim dividend for the six months ended June 30, 2023, and June 30, 2022[24][97] - Slow recovery of the tourism industry, reduced room rates, and increased operating costs led to a significant decrease in hotel operating profit[103] - Higher interest expenses[103] - Repair and maintenance of Grand Bay View Hotel[103] - Costs for repair and maintenance of each quarantine hotel to achieve ideal hotel standards[103] (Loss) Earnings Per Share Basic loss per share was 0.20 HK cents for the six months ended June 30, 2023, a reversal from prior-year earnings, with no diluted EPS presented due to a lack of potential ordinary shares | Metric | For the Six Months Ended June 30, 2023 (HK cents) | For the Six Months Ended June 30, 2022 (HK cents) | | :--- | :--- | :--- | | Basic (Loss) Earnings Per Share | (0.20) | 1.18 | - Basic (loss) earnings per share is calculated based on the loss attributable to owners of the Company of HK$17,920,000 for the period (profit for the six months ended June 30, 2022: HK$105,958,000) and 8,947,051,000 shares in issue during the period[98] - Diluted earnings per share for the current and prior periods are not presented as there were no potential ordinary shares in existence during these periods[25] Trade and Other Receivables As of June 30, 2023, total trade and other receivables significantly decreased, with notable declines in trade receivables and overdue accounts | Item | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables (from contracts with customers) | 3,210 | 10,730 | | Other Receivables | 3,542 | 5,329 | | Total | 6,752 | 16,059 | | Aging of Trade Receivables | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Not yet due | 2,904 | 8,122 | | Overdue: 0 – 30 Days | 113 | 1,194 | | Overdue: 31 – 60 Days | 62 | 1,057 | | Overdue: 61 – 90 Days | 131 | 357 | | Total | 3,210 | 10,730 | Trade and Other Payables As of June 30, 2023, total trade and other payables and accruals decreased, mainly due to a decline in other payables and accruals | Item | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Trade Payables | 5,351 | 2,487 | | Other Payables and Accruals | 28,180 | 49,428 | | Total | 33,531 | 51,915 | | Aging of Trade Payables | As of June 30, 2023 (HK$ thousand) | As of December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | 0 – 30 Days | 4,901 | 2,414 | | 31 – 60 Days | 433 | 72 | | 61 – 90 Days | 17 | 1 | | Total | 5,351 | 2,487 | Management Discussion and Analysis Overall Performance Net profit attributable to owners, before revaluation and depreciation, significantly decreased by 88% to HK$18,000 thousand, driven by lower hotel revenue and higher operating, maintenance, and finance costs | Metric | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Owners of the Company After Tax and Before Depreciation of Land, Property and Equipment | 17,900 | 144,624 | -88% | | Profit (Loss) After Tax and Non-controlling Interests | (17,920) | 105,958 | Not Applicable | - The overall decrease in profit was mainly due to reduced hotel revenue and increased hotel operating costs, repair and maintenance costs, and finance costs[105] Revenue Analysis Total revenue decreased by 35% year-on-year, primarily due to a 38% drop in hotel operations revenue, while London's Royal Scot Hotel rental income remained stable with positive growth prospects | Revenue Source | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Hotel Operations Revenue | 159,513 | 256,622 | -38% | | Investment Property Income | 18,395 | 18,737 | -2% | | Dividend Income | 45 | 42 | +7% | | Other Income | 3,618 | 3,554 | +2% | | Total | 181,571 | 278,955 | -35% | | Hotel Name | Average Room Occupancy Rate (%) from January to June 2023 | | :--- | :--- | | Ramada Hong Kong Harbour View | 89 | | Ramada Hong Kong Grand | 84 | | Best Western Plus Hotel Hong Kong | 92 | | Grand View Hotel Causeway Bay | 83 | | Best Western Plus Hotel Tsim Sha Tsui | 89 | - The future prospects for rental increases at the Royal Scot Hotel in London are encouraging, as annual rent increases (every 5 years) are linked to the UK Retail Price Index, which remained at 10.7% in June 2023, its highest point in 40 years[36][88] Cost Analysis Administrative expenses (excluding depreciation) surged by 194% to HK$50,200 thousand, driven by Grand Bay View Hotel's opening, maintenance, and Wood Street Hotel's operating costs, alongside increased hotel service staff and payroll | Cost Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Administrative Expenses (excluding depreciation) | 50,200 | 17,100 | +194% | | Cost of Hotel Services | 94,000 | 76,300 | +23% | | Total Depreciation of Hotel Properties | 34,900 | 37,700 | -7% | - The increase in administrative expenses was mainly due to opening expenses, repair and maintenance costs of HK$29,000 thousand for Grand Bay View Hotel, and operating expenses of HK$4,000 thousand for Wood Street Hotel Limited[50][107] - The increase in hotel operating costs was mainly due to an increase in the number of employees from 334 to 455 and payroll growth (including staff from the newly acquired Grand Bay View Hotel)[57][107] Financing Total debt slightly increased to HK$871,000 thousand, with finance costs surging 351% to HK$19,400 thousand due to increased shareholder loans from the Grand Bay View Hotel acquisition, while gearing and debt-to-asset ratios remained stable | Debt Type | As of June 30, 2023 (HK$ million) | As of December 31, 2022 (HK$ million) | Change (HK$ million) | | :--- | :--- | :--- | :--- | | Bank Loans | 240 | 242 | -2 | | Shareholder Loans | 631 | 615 | +16 | | Total Debt | 871 | 857 | +14 | | Finance Cost Item | For the Six Months Ended June 30, 2023 (HK$ thousand) | For the Six Months Ended June 30, 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest Expense | 19,400 | 4,300 | +351% | | Interest Expense on Bank Loans | 6,200 | 2,700 | +130% | | Interest Expense on Shareholder Loans | 13,200 | 1,600 | +725% | - As of June 30, 2023, the gearing ratio and debt-to-asset ratio were 9% and 20% respectively, remaining stable compared to December 31, 2022[34][35] Key Business Developments Grand Bay View Hotel and Shanghai Grand America Hotel reopened on August 1, 2023, after extensive maintenance, while London's Wood Street Hotel renovation into a luxury hotel is ongoing - Grand Bay View Hotel and Shanghai Grand America Hotel commenced operations on August 1, 2023, following extensive repair and maintenance[58] - The Group acquired the Wood Street Police Headquarters in central London for £40,000,000 on January 29, 2020, which has been approved for renovation into a luxury hotel with approximately 216 rooms, restaurants, and bars[52] - The Group holds eight revenue-generating hotels (six in Hong Kong, one in Shanghai, and one in London) and the renovation project for Wood Street Hotel in London[59] Outlook Hong Kong's tourism recovery is slow due to airline capacity, global economy, and exchange rate challenges, alongside rising operating costs from labor shortages; management focuses on revenue growth and cost control, anticipating high occupancy for other hotels - In the first half of 2023, Hong Kong received approximately 13 million visitors, compared to 35 million in the same period of 2019, with tourism recovery impacted by challenges such as airline capacity, global economy, and exchange rates[110] - Operating costs significantly increased due to local labor shortages and an increase in hotel staff numbers[110] - The newly acquired Grand Bay View Hotel commenced operations on August 1, 2023, and has maintained high occupancy rates; the Group's other hotels in Hong Kong are also expected to continue achieving high occupancy rates[94] - The future prospects for hotel business and rental income remain challenging, and management will continue efforts to increase revenue and control costs[117] Corporate Governance The company complied with all Corporate Governance Code provisions, except for the combined Chairman and CEO role, which the Board believes provides consistent leadership and cost savings; all directors confirmed Model Code compliance - The company has complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules of The Stock Exchange of Hong Kong Limited, except for code provision C.2.1 (which states that the roles of chairman and chief executive officer should be separate)[111][116][119] - Mr. Cheng Kai Man currently holds both the Chairman and Chief Executive Officer positions; the Board believes that combining these roles provides strong and consistent leadership for the company, facilitates effective strategic planning and implementation, and significantly saves costs[60] - All directors have confirmed their compliance with the standards set out in the Model Code throughout the period[61][119] - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[118] Review and Approval The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2023 - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2023[62]