Financial Performance - Revenue for the three months ended March 31, 2022, was HKD 13,447,000, a decrease of 72.6% compared to HKD 49,149,000 for the same period in 2021[7] - Gross profit for the same period was HKD 8,618,000, down from HKD 32,736,000 in 2021, reflecting a significant decline in profitability[7] - The company reported a profit before tax of HKD 6,355,000, compared to a loss of HKD 5,008,000 in the previous year, indicating a turnaround in financial performance[7] - Basic and diluted earnings per share for the period were HKD 3.68, compared to a loss per share of HKD 3.48 in the same quarter of 2021[7] - Total comprehensive income for the period was HKD 6,628,000, compared to a loss of HKD 5,115,000 in the prior year, showing improved overall financial health[10] - The company reported a net profit attributable to shareholders of HKD 6,355,000 for the three months ended March 31, 2022, compared to a loss of HKD 5,008,000 in the same period of 2021[35] Revenue and Income Sources - Revenue from customer contracts for the three months ended March 31, 2022, was HKD 13,447,000, a decrease from HKD 49,149,000 in the same period of 2021, representing a decline of approximately 72.6%[20] - Other income and net gains for the three months ended March 31, 2022, included government subsidies of HKD 1,800,000, down from HKD 4,200,000 in the same period of 2021, reflecting a decrease of 57.1%[26] - Other income and net gains decreased by approximately HKD 5.7 million or about 75.5% to approximately HKD 1.8 million, mainly due to reduced government subsidies and the absence of rental concessions[72] Cost Management - The cost of goods sold was HKD 4,829,000, significantly lower than HKD 16,413,000 in the previous year, contributing to improved gross margins[7] - Employee costs for the quarter were HKD 8,523,000, an increase from HKD 7,476,000 in the same period last year, reflecting rising operational costs[7] - Employee benefit expenses (excluding directors and CEO remuneration) were HKD 8,140,000 for the three months ended March 31, 2022, compared to HKD 20,958,000 in the same period of 2021, indicating a reduction of approximately 61.1%[28] - Employee costs for the three months ended March 31, 2022, were approximately HKD 8.5 million, a decrease of about HKD 14.1 million or approximately 62.2% compared to HKD 22.6 million for the same period in 2021[73] Operational Challenges - The group continues to focus on managing its restaurant operations effectively amidst market challenges[14] - The group has temporarily suspended operations of its restaurants in February and March 2022 due to the ongoing COVID-19 situation[59] - The restaurant industry faces severe business conditions, including a slowdown in economic growth and weakened consumer sentiment due to COVID-19[80] - Employee and food costs remain relatively high, putting pressure on the group to balance cost control with food and service quality[80] - The group is negotiating rent reductions with landlords due to operational restrictions, but landlords are unwilling to offer significant discounts[80] - A series of cost-saving measures and contingency plans have been implemented to cope with the adverse operating environment caused by COVID-19[80] Strategic Decisions - The company has sold its subsidiary, Longxi Shanghai, and no longer operates in China, which may impact future revenue streams[21] - The group closed its Global Trade Square branch due to lease expiration and decided not to renew the Causeway Bay branch lease, focusing resources on remaining restaurants[59] - The group plans to continuously assess the overall market situation and balance the expansion of restaurants with the closure of underperforming locations[80] - The group closed the New Pung Keng branch in July 2022 due to poor performance, currently operating only in Wan Chai, Kwun Tong, and Whampoa[86] Compliance and Governance - The company did not incur any income tax expenses for the period, maintaining a tax-efficient structure[7] - The company’s tax expenses for the reporting periods were calculated based on the two-tiered profits tax rate system, with the first HKD 2,000,000 of profits taxed at 8.25%[29] - The company confirmed compliance with all conditions related to COVID-19 related government subsidies for the reporting period[26] - The company’s unaudited condensed consolidated financial statements for the three months ended March 31, 2022, have been reviewed by the audit committee and comply with applicable accounting standards and GEM listing rules[108] Shareholder Information - The company did not recommend any dividend for the three months ended March 31, 2022, consistent with the previous year[34] - The weighted average number of shares for the three months ended March 31, 2022, was 172,800,000 shares, an increase from 144,000,000 shares in the same period of 2021[35] - No stock options were granted, exercised, or expired during the three months ending March 31, 2022[85] - The group has not purchased, sold, or redeemed any listed securities during the three months ending March 31, 2022[82] - The trading of the company's shares has been suspended since November 11, 2021, pending compliance with the relevant guidelines for resumption of trading[110] Future Outlook - The company is currently evaluating the impact of new accounting standards but has not identified any significant financial effects on its operations[16] - The group adopts a conservative approach to operations due to the economic downturn in Hong Kong and ongoing COVID-19 challenges[80] - The group is in discussions regarding potential acquisitions but has not entered into any formal agreements as of the report date[88] - The group decided not to declare any dividends for the three months ended March 31, 2022[79] - The group is negotiating rent reductions with landlords due to operational restrictions, but landlords are unwilling to offer significant discounts[80]
龙皇集团(08493) - 2022 Q3 - 季度财报