Financial Performance - Total revenue for the year was approximately HKD 180.4 million, a decrease of about HKD 33.0 million or approximately 15.5% compared to the previous year of HKD 213.4 million[36] - Gross profit for the year was approximately HKD 114.1 million, down by about HKD 30.3 million or approximately 21.0% from HKD 144.4 million in the previous year[36] - Net profit for the year was approximately HKD 73.3 million, an increase of about HKD 5.2 million or approximately 7.6% compared to HKD 68.1 million in the previous year[36] - The company reported a net comprehensive income of HKD 37.2 million, compared to a loss of HKD 42.0 million in the previous year[38] - The annual profit increased by approximately HKD 5.2 million or about 7.6% to approximately HKD 73.3 million during the reporting period, compared to approximately HKD 68.1 million as of December 31, 2022[85] Revenue Sources - Revenue from wastewater treatment services was HKD 64.5 million, down from HKD 91.1 million in the previous year[46] - Revenue from special service arrangement was HKD 115.8 million, a decrease from HKD 122.3 million in the previous year[46] - All revenue in 2023 was derived from customers in China, with all non-current assets primarily located in China[16] Expenses and Costs - Interest income decreased to HKD 1,870,000 in 2023 from HKD 2,285,000 in 2022, a decline of 18.14%[2] - Total other income decreased to HKD 2,519,000 in 2023 from HKD 3,274,000 in 2022, a decrease of 23.06%[2] - Operating costs for wastewater treatment decreased from approximately HKD 48.6 million to about HKD 45.0 million, a reduction of approximately HKD 3.6 million or 7.4%[80] - The company's sales cost decreased from approximately HKD 69.0 million to about HKD 66.2 million, a reduction of approximately HKD 2.8 million or 4.1% due to lower wastewater treatment operating costs[62] - Financing costs decreased from approximately HKD 39.1 million to about HKD 32.9 million, a reduction of approximately HKD 6.2 million or 15.9%, mainly due to lower market interest rates and repayment of bank loans[67] Assets and Liabilities - The total assets of the company as of the end of the reporting period were HKD 2,241,275,000, down from HKD 2,311,423,000 in the previous year[49] - Total liabilities decreased from HKD 989,392,000 to HKD 882,024,000, reflecting a reduction of approximately 10.9%[49] - The company's retained earnings increased from HKD 689,807,000 to HKD 763,067,000, an increase of approximately 10.6%[48] - Long-term borrowings decreased from HKD 510,981,000 to HKD 451,271,000, a reduction of approximately 11.7%[49] - The asset-to-liability ratio was approximately 45.8% as of December 31, 2023, down from approximately 54.3% as of December 31, 2022[119] Taxation - The company recorded a current income tax expense of HKD 15,769,000, an increase of 74.5% compared to HKD 9,054,000 in the previous year[21] - The actual tax rate decreased to approximately 19.5% during the reporting period, down from 21.4% due to a reduction in non-deductible expenses[84] Dividends - The group did not declare any dividends for the year ending December 31, 2023, compared to a mid-term dividend of HKD 0.05 per share totaling HKD 50,000,000 in 2022[4] - The company did not recommend the payment of a final dividend for the years ended December 31, 2023, and December 31, 2022[94] Government Support - Government subsidies increased to HKD 46,000 in 2023 from HKD 12,000 in 2022, representing a 283.33% increase[2] Future Outlook - The company anticipates that consumer spending will weaken due to increased economic uncertainty, impacting future growth prospects[54] - The company forecasts China's economy to grow by approximately 4.6% in 2024, the slowest expansion in over thirty years excluding pandemic-affected years[75] - The company's strategy for 2024 focuses on expanding and upgrading new water pricing and treatment facilities in collaboration with local authorities[75] Operational Highlights - The total volume of wastewater processed during the reporting period was approximately 80.4 million cubic meters, an increase of about 1.8 million cubic meters or approximately 2.3% from 78.6 million cubic meters in the previous year[43] - The daily total wastewater treatment capacity was 375,000 cubic meters, with all treatment plants meeting Class A discharge standards (275,000 cubic meters per day) and Class IV water standards (100,000 cubic meters per day)[34] - The company has been operating and managing wastewater treatment facilities in Ningxia since September 2011 under a 30-year TOT model[34] - The company plans to upgrade and expand wastewater treatment facilities to meet higher discharge standards and increase design capacity[34] Compliance and Governance - The company has complied with all applicable corporate governance codes as per the listing rules during the reporting period[100] - The audit committee reviewed the consolidated annual performance of the group for the financial year ended December 31, 2023[126] - The company confirmed that all directors have fully complied with the standards set out in the securities trading guidelines during the reporting period[104] Shareholder Relations - The company expressed heartfelt gratitude to shareholders for their support and to employees for their hard work and contributions during the year 2023[106]
达力环保(01790) - 2023 - 年度业绩