新时代集团控股(00166) - 2023 - 中期业绩

Financial Highlights For the six months ended June 30, 2023, the Group reported a significant revenue increase to HK$16.6 billion, yet profit before tax and net profit sharply declined, resulting in lower basic earnings per share and no interim dividend Financial Summary for the six months ended June 30 | Indicator | 2023 (HK$ Million) | 2022 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 16,602.2 | 10,402.8 | +59.6% | | Profit before tax | 69.3 | 229.1 | -69.7% | | Profit for the period | 57.9 | 214.9 | -73.1% | | Earnings per share - basic (HK cents) | 0.66 | 2.45 | -73.1% | - The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2023[7] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss In H1 2023, revenue grew to HK$16.6 billion, but gross profit plummeted to HK$14.9 million due to increased cost of sales, partially offset by a HK$139.0 million gain from property revaluation, resulting in a 73% decrease in profit for the period to HK$57.9 million Key Profit or Loss Items (Unaudited, for the six months ended June 30) | Item | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Revenue | 16,602.2 | 10,402.8 | | Cost of sales | (16,587.3) | (10,107.9) | | Gross Profit | 14.9 | 294.9 | | Other income, gains and net losses | 139.0 | 1.0 | | General and administrative expenses | (49.4) | (53.5) | | Finance costs | (28.0) | (14.3) | | Profit before tax | 69.3 | 229.1 | | Income tax expense | (11.4) | (14.2) | | Profit for the period | 57.9 | 214.9 | - Basic and diluted earnings per share were both HK$0.66 cents, down from HK$2.45 cents in the same period of 2022[16] Condensed Consolidated Balance Sheet As of June 30, 2023, total assets increased to HK$2,327.4 million, driven by investment properties, while total liabilities slightly rose, leading to growth in net assets to HK$1,435.2 million and a stable debt-to-asset ratio of 38.3% Balance Sheet Summary | Item | June 30, 2023 (Unaudited, HK$ Million) | Dec 31, 2022 (Audited, HK$ Million) | | :--- | :--- | :--- | | Total Non-current Assets | 1,086.4 | 980.2 | | Total Current Assets | 1,241.0 | 1,185.2 | | Total Assets | 2,327.4 | 2,165.4 | | Total Current Liabilities | 392.3 | 329.8 | | Total Non-current Liabilities | 499.9 | 514.0 | | Total Liabilities | 892.2 | 843.8 | | Net Assets | 1,435.2 | 1,321.6 | | Total Equity | 1,435.2 | 1,321.6 | - The Group's cash and bank balances stood at HK$808.3 million, a slight decrease from HK$851.2 million at the end of 2022[19] - A new line item, Investment Property, was added to non-current assets with a value of HK$219.2 million[19] Notes to the Financial Statements The financial statements, prepared under HKAS 34, reflect new accounting policies for hedge accounting and investment properties, segmenting business into 'Upstream' and 'Ordinary and commodity refining and trading', with Hong Kong as the primary revenue source and Canada holding most non-current assets, while an Argentinian lawsuit is deemed unlikely to succeed - The Group adopted new accounting policies for hedge accounting for derivative financial instruments and for investment properties, which were reclassified from property, plant and equipment[22][23][26] Segment Revenue (for the six months ended June 30) | Segment | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Upstream | 326.0 | 589.0 | | Ordinary and commodity refining and trading | 16,276.2 | 9,813.8 | | Total | 16,602.2 | 10,402.8 | Revenue by Geographical Location (for the six months ended June 30) | Location | 2023 (HK$ Million) | 2022 (HK$ Million) | | :--- | :--- | :--- | | Hong Kong | 16,276.2 | 9,813.8 | | Canada | 275.0 | 548.7 | | Argentina | 51.0 | 40.3 | | Total | 16,602.2 | 10,402.8 | - The Board did not recommend an interim dividend for the period[78] - Basic EPS was calculated based on a profit of HK$57.9 million and a weighted average of 8,790.6 million shares[74] - The Group is involved in an arbitration proceeding initiated by a partner in Argentina concerning the Los Blancos concession. The Group believes the partner's claim to its 50% participating interest is unlikely to succeed and has not made a provision for it[158] Management Discussion and Analysis Overall Review Despite falling natural gas prices, the Group achieved a HK$57.9 million profit in H1 2023, maintaining a robust financial position with no external debt and high liquidity of HK$855.9 million, driven by strong precious metals trading and ongoing energy transition initiatives in Canada and new refinery preparations - The Group recorded a profit of HK$57.9 million despite a sharp drop in natural gas prices compared to the same period in 2022[160] - Financial position is strong with no external debt and highly liquid assets of HK$855.9 million, including HK$808.3 million in cash[160] - The precious metals trading business saw net profit triple compared to the same period last year[107] - The Group is committed to an energy transition, focusing on redeveloping Discovery Park in Canada into a green ecosystem center[106] Business Operations Review The Group's diversified operations saw Canadian upstream business impacted by low gas prices and wildfires, Argentinian oil production stable but challenged by economic factors, while Hong Kong's commodity refining and trading business achieved strong growth with a new refinery nearing completion Canada Operations In H1 2023, Canadian operations produced 12,152 boe/d, but revenue fell 50% to HK$275.0 million due to low natural gas prices and wildfires, prompting focus on cost reduction and green redevelopment of Discovery Park, though hydrogen plant plans are stalled - Average daily production was 12,152 barrels of oil equivalent (boe/d), with 95% being natural gas[109] - Revenue from Canadian operations decreased by 50% to HK$275.0 million due to a significant drop in natural gas prices[110] - Wildfires forced a production shutdown at the Horn River Basin facilities from July 1, 2023, reducing daily output by 3,200 boe/d[161] - The Group is redeveloping the 1,200-acre Discovery Park into a green ecosystem center to create a circular economy[169] - Plans for a new liquid hydrogen plant at Discovery Park are stalled due to economic feasibility issues and competition from subsidized US projects[84] Argentina Operations Argentina's Los Blancos oilfield maintained stable production of 1,320 barrels per day of high-quality light crude, recognized as the country's most productive conventional well, despite severe financial constraints from price caps, hyperinflation, and capital controls, remaining financially self-sufficient with positive cash flow - The Los Blancos concession produced a stable average of 1,320 barrels per day of light crude oil and is recognized as Argentina's most productive conventional oil well[86] - Financial performance is significantly hampered by adverse factors including low domestic oil prices (about 30% below Brent), hyperinflation, capital controls, high taxes, and social unrest[87] - Despite challenges, the Argentinian operation generates positive cash flow and is financially self-sufficient[87] Commodity Refining and Trading Business The physical precious metals trading business performed exceptionally well, with transaction volume growing to HK$16.3 billion and net profit tripling to HK$16.2 million, with a new refinery capable of processing 50 tonnes of gold annually scheduled for testing in August 2023 to further enhance profitability - The physical gold and silver refining and trading business saw total transaction volume grow to HK$16,276.2 million[90] - Net profit from this segment tripled to HK$16.2 million compared to the same period in 2022, aided by improved profit margins per transaction[90] - The new refinery, capable of processing approximately 50 tonnes of 99.9% gold annually, is scheduled for initial testing and commissioning in August 2023[91] Financial Review In H1 2023, total revenue increased to HK$16.6 billion, primarily from precious metals sales, offsetting upstream declines, while gross profit fell sharply to HK$14.9 million due to lower natural gas prices, though a HK$115.0 million property revaluation gain boosted other income, resulting in a net profit of HK$57.9 million and EPS of HK$0.66 cents Revenue Breakdown (H1 2023) | Business Segment | Revenue (HK$ Million) | Compared to H1 2022 (HK$ Million) | | :--- | :--- | :--- | | Upstream Oil & Gas | 326.0 | 589.0 | | Precious Metals Sales | 16,276.2 | 9,813.8 | - Gross profit was HK$14.9 million, a significant decrease from HK$294.9 million in H1 2022, reflecting the sharp fall in Canadian natural gas prices[95] - Other income, gains and net losses amounted to HK$139.0 million, which included a fair value gain of HK$115.0 million from designating property, plant and equipment to investment property[95] - General and administrative expenses decreased by 8% to HK$49.4 million due to cost savings in the upstream business[96] - Profit attributable to owners of the Company was HK$57.9 million, with basic and diluted EPS at HK$0.66 cents[96] Capital Structure, Liquidity, and Financial Resources The Group maintains a strong financial position with no interest-bearing debt and a 0% gearing ratio, reporting net current assets of HK$848.7 million and cash of HK$808.3 million as of June 30, 2023, while utilizing derivatives for hedging and earmarking HK$161.7 million from a 2017 offering for future energy investments - As of June 30, 2023, the Group had no interest-bearing borrowings, resulting in a gearing ratio of 0%[121] Key Liquidity and Capital Structure Metrics (as of June 30, 2023) | Metric | Value (HK$ Million) | Compared to Dec 31, 2022 | | :--- | :--- | :--- | | Net Current Assets | 848.7 | 855.4 | | Cash and Bank Balances | 808.3 | 851.2 | | Total Equity | 1,435.2 | 1,321.6 | | Debt-to-Asset Ratio | 38.3% | 39.0% | - An unutilized balance of HK$161.7 million from a 2017 public offering is expected to be used for investments in oil and gas, power generation, and renewable energy by the end of 2024[116] - The Group uses derivative financial instruments for hedging purposes to mitigate the financial impact of price fluctuations on its precious metals inventory[117] Corporate Governance and Other Information Corporate Governance and Compliance The company complied with all applicable Corporate Governance Code provisions, with interim results reviewed by the Audit Committee and PricewaterhouseCoopers, and confirmed adherence to relevant laws and regulations without material breaches - The Board believes the company has complied with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2023[139] - The interim results for the six months ended June 30, 2023, have been reviewed by the Company's Audit Committee and by the independent auditor, PricewaterhouseCoopers[143] - The Group has complied in all material respects with the relevant laws and regulations that have a significant impact on its business and operations[148] Share Repurchase and Dividends In H1 2023, the company repurchased 67,104,000 ordinary shares for HK$7.8 million, and the Board decided not to declare an interim dividend for the period - The company repurchased a total of 67,104,000 ordinary shares for a total consideration (before expenses) of HK$7.8 million during the period[144] Share Repurchase Details (2023) | Month | Number of Shares Repurchased | Price per Share (HK$) | Total Consideration (HK$) | | :--- | :--- | :--- | :--- | | March | 2,468,000 | 0.081 - 0.082 | 201,882 | | April | 23,314,000 | 0.091 - 0.126 | 2,514,322 | | May | 22,114,000 | 0.114 - 0.130 | 2,755,568 | | June | 19,208,000 | 0.111 - 0.125 | 2,362,829 | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2023[149]