奥威控股(01370) - 2023 - 中期业绩

Financial Highlights The Group's financial performance for the first half of 2023 shows a significant decline, turning from profit to loss with substantial decreases in revenue and gross profit, alongside an increase in per-share loss Key Financial Indicators for H1 2023 | Indicator | H1 2023 | Y-o-Y Change | | :--- | :--- | :--- | | Revenue | approx. RMB 355.8 million | -33.8% | | Gross Profit | approx. RMB 83.9 million | -39.9% | | Gross Margin | 23.6% | - | | (Loss)/Profit Attributable to Equity Holders | Loss approx. RMB 65.7 million | Turned from Profit to Loss | | Basic (Loss)/Earnings Per Share | Loss RMB 0.04/share | Turned from Profit to Loss | | Interim Dividend | Not Recommended for Distribution | - | Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, and detailed notes, highlighting the shift from profit to loss and changes in asset and liability structures Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, the Group turned from a profit in the prior period to a loss, with revenue decreasing by 33.8% year-on-year to RMB 356 million and gross profit declining by 39.9% to RMB 83.93 million, primarily due to an impairment loss of RMB 37.39 million on property, plant, and equipment, resulting in a net loss of RMB 65.75 million compared to a profit of RMB 44.73 million in the same period last year Key Income Statement Data (For the six months ended June 30) | Item (RMB thousands) | 2023 (Unaudited) | 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 355,846 | 537,159 | | Gross Profit | 83,928 | 139,574 | | Impairment loss on property, plant and equipment | (37,391) | – | | (Loss)/Profit before tax | (40,072) | 67,465 | | (Loss)/Profit for the period | (65,749) | 44,731 | | Basic (Loss)/Earnings Per Share (RMB) | (0.04) | 0.03 | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets were approximately RMB 2.002 billion, with net assets (total equity) of approximately RMB 1.449 billion, notably indicating short-term liquidity pressure as current liabilities exceeded current assets by RMB 179 million Key Balance Sheet Data (RMB thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Non-current assets | 2,001,981 | 1,937,017 | | Current assets | 587,723 | 487,829 | | Current liabilities | 766,884 | 700,070 | | Net current liabilities | (179,161) | (212,241) | | Net assets | 1,449,025 | 1,514,788 | Notes to the Condensed Consolidated Financial Statements The notes to the financial statements detail accounting policies, segment information, and the composition of various financial statement items, highlighting significant uncertainties regarding the Group's going concern, the fact that all revenue is derived from the mining segment in mainland China, and a substantial increase in finance costs due to increased bank borrowings General Information and Basis of Preparation The company primarily engages in iron ore mining and green building materials businesses in China; although financial statements are prepared on a going concern basis, notes indicate significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern due to losses and current liabilities exceeding current assets, which directors deem appropriate given financial support commitments from major shareholders - The Group's principal activities include: (i) iron ore exploration, mining, beneficiation, and sales; (ii) hospital management services; and (iii) production and sales of green building materials (construction sand and aggregates)[122] - During the reporting period, the Group incurred a loss of RMB 65.75 million, with current liabilities exceeding current assets by approximately RMB 179 million, cash and equivalents of only RMB 60.09 million, and borrowings due within one year totaling RMB 477 million, indicating significant uncertainties that may cast substantial doubt on the Group's ability to continue as a going concern[124] - The directors consider the preparation of financial statements on a going concern basis appropriate, primarily considering the possibility of renewing bank borrowings and the commitment of sufficient financial support from executive directors and major shareholders Mr. Li Yanjun and Mr. Li Ziwei[12][125][146] Segment Information and Revenue The Group's revenue is entirely derived from the mining segment, with no revenue from the medical segment during the reporting period; the mining segment recorded a loss of RMB 34.36 million, with iron concentrate contributing RMB 308 million and sand and aggregates RMB 47.92 million as primary revenue sources by product type Segment Results (For the six months ended June 30, 2023, RMB thousands) | Segment | Revenue | Segment Results | | :--- | :--- | :--- | | Mining Segment | 355,846 | (34,360) | | Medical Segment | – | (411) | | Total | 355,846 | (34,771) | Revenue by Product Type (RMB thousands) | Product Type | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Iron Concentrate | 307,922 | 470,514 | | Sand and Aggregates | 47,924 | 66,645 | | Total | 355,846 | 537,159 | Finance Costs Finance costs increased by 58.8% year-on-year from RMB 16.67 million in the prior period to RMB 26.47 million, primarily due to a rise in interest expenses on bank borrowings from RMB 14.96 million to RMB 25.53 million Details of Finance Costs (RMB thousands) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Interest expense on bank borrowings | 25,533 | 14,956 | | Interest expense on lease liabilities | 55 | 406 | | Others | 881 | 1,310 | | Total | 26,469 | 16,672 | Dividends The Board has decided not to declare an interim dividend for the six months ended June 30, 2023 - The directors have decided not to declare any dividend for the interim period (2022: nil)[22][156] (Loss)/Earnings Per Share During the reporting period, the loss attributable to equity holders was RMB 65.75 million, resulting in a basic loss per share of RMB 0.04 based on a weighted average of 1.635 billion ordinary shares, compared to earnings per share of RMB 0.03 in the prior period; diluted loss per share is not presented as there are no potential dilutive ordinary shares Basic (Loss)/Earnings Per Share Calculation Data | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB thousands) | (65,749) | 44,731 | | Weighted average number of ordinary shares (thousands) | 1,635,330 | 1,635,330 | Trade and Other Receivables As of the period end, net trade and other receivables increased from RMB 318 million at the end of last year to RMB 404 million, with trade receivables (net of allowance) at RMB 105 million, primarily aged within 180 days Ageing Analysis of Trade Receivables (Net of allowance, RMB thousands) | Ageing | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | 0 to 30 days | 11,917 | 28,928 | | 31 to 90 days | 34,415 | 19,232 | | 91 to 180 days | 26,584 | 31,553 | | 181 to 365 days | 27,599 | 7,926 | | Over 365 days | 4,680 | 2,730 | | Total | 105,195 | 90,369 | Management Discussion and Analysis Management's discussion and analysis provides an overview of market conditions, detailed business segment performance, a financial review, and future strategic plans, addressing the challenges faced and outlining growth initiatives Market Review and Business Review In H1 2023, China's economy rebounded with optimized pandemic policies, but weakening steel demand led to fluctuating iron ore prices; the Group recorded a loss due to significantly reduced iron concentrate production and sales (output -32.8%, sales -29.8%) from decreased extractable reserves at its main mining area (Jiheng Mining), coupled with lower selling prices and asset impairment - In terms of the macro market, iron ore prices in Q1 2023 rose supported by expectations, then faced downward pressure in Q2 due to weakening demand, before rebounding in June driven by favorable domestic policies[32] - The Group's performance decline was primarily influenced by multiple factors: decreased iron concentrate sales due to reduced extractable iron ore reserves at Jiheng Mining; lower gross margin from declining iron concentrate selling prices; and the recognition of an impairment loss on property, plant, and equipment[195] Business Segment Performance The core iron ore business saw significant year-on-year declines in production and sales by 32.8% and 29.8% respectively, impacted by reduced reserves at Jiheng Mining; total sales for the green building materials business also fell by 28.7%, mainly due to a sharp drop in sales from Jingyuancheng Mining, with unit operating costs generally increasing across both segments Iron Ore Business Total iron concentrate production and sales decreased by 32.8% and 29.8% year-on-year respectively, with Jiheng Mining's output sharply declining by 63.8% due to reduced resources, while Jingyuancheng Mining's output remained largely stable (-3.2%); regarding costs, Jiheng Mining saw increased unit fixed costs due to lower production, whereas Jingyuancheng Mining experienced a decrease in unit costs due to a lower stripping ratio Iron Concentrate Production and Sales Data (Thousand tons) | Item | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | Total Production | 381.93 | 567.95 | -32.8% | | Jiheng Mining Production | 100.27 | 277.04 | -63.8% | | Jingyuancheng Mining Production | 281.66 | 290.91 | -3.2% | | Total Sales | 395.38 | 563.08 | -29.8% | | Jiheng Mining Sales | 102.78 | 272.81 | -62.3% | | Jingyuancheng Mining Sales | 292.60 | 290.27 | 0.8% | Average Unit Cash Operating Cost of Iron Concentrate (RMB/ton) | Mine | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | Jiheng Mining (Zhijiazhuang Mine) | 483.07 | 400.79 | 20.53% | | Jingyuancheng Mining (Wang'ergou and Shuanmazhuang Mine) | 691.57 | 750.61 | -7.87% | Green Building Materials Business Total sales volume for the sand and aggregates business decreased by 28.7% year-on-year, primarily due to an 81.3% sharp decline in machine-made sand sales from Jingyuancheng Mining; despite stable average selling prices (-0.3%), the average unit cash operating cost significantly increased by 70.6% year-on-year, mainly driven by rising raw material costs and unit fixed expenses such as electricity and material consumption Sand and Aggregates Production, Sales, and Cost Data | Item | H1 2023 | H1 2022 | Change Rate | | :--- | :--- | :--- | :--- | | Total Production (Thousand tons) | 1,775.71 | 1,989.65 | -10.8% | | Total Sales (Thousand tons) | 1,364.41 | 1,914.29 | -28.7% | | Average Selling Price (RMB) | 33.8 | 33.9 | -0.3% | | Average Unit Cash Operating Cost (RMB) | 18.60 | 10.9 | 70.6% | - The primary reasons for the increase in unit operating costs are: rising raw material costs at Jiheng Mining; and higher unit electricity consumption, machinery and material consumption, and equipment maintenance expenses at Jingyuancheng Mining due to lower production[91] Financial Review Financial performance declined across the board, with revenue decreasing by 33.8% due to lower iron concentrate production, sales, and prices, leading to a reduced gross profit and a gross margin of 23.6%; finance costs rose by 58.8% due to increased borrowings, resulting in a net loss of RMB 65.7 million, while bank borrowings significantly increased, raising the debt ratio - Revenue decreased by 33.8% to RMB 356 million, primarily due to a significant reduction in iron concentrate production and sales volume, as well as a decline in selling prices at Jiheng Mining[92] - Gross profit decreased to RMB 83.9 million, and gross margin fell to 23.6%, mainly due to lower sales volume and prices of iron concentrate[93] - Finance costs increased by 58.8% to RMB 26.5 million, primarily due to an increase in bank borrowing amounts[176] - A post-tax loss of RMB 65.7 million was recorded for the period, mainly due to a decrease in gross profit from iron concentrate sales and the recognition of an impairment loss on property, plant, and equipment compared to the same period last year[177] Key Financial Ratios and Status | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Bank Borrowings | RMB 818.5 million | RMB 513.0 million | | Debt Ratio (Bank Borrowings/Total Assets) | 31.6% | 21.2% (calculated) | | Cash and Cash Equivalents | RMB 60.1 million | RMB 56.1 million | Future Plans and Outlook Looking ahead to H2 2023, the Group will continue to reduce costs and enhance efficiency while vigorously developing its green building materials business to mitigate operational risks from diminishing iron ore reserves at Jiheng Mining; concurrently, to achieve new profit growth, the Group will actively seek investment and development opportunities in other industries - The core strategy is to continuously reduce costs and enhance efficiency, actively promote green industry layout, and develop the green building materials sand and aggregates business to reduce reliance on diminishing mineral resources[213] - To diversify investment risks and create new growth points, the Group will closely monitor favorable national policies, adjust its development strategy as appropriate, and seek investment opportunities in other industries[213] Other Disclosures As of the period end, the Group's employee count decreased year-on-year, and total remuneration declined; the company complies with corporate governance codes, and the audit committee has reviewed the financial statements; two significant post-balance sheet events occurred: heavy rainfall in Hebei affecting production, and a subsidiary's subscription for Cangzhou Bank shares; no interim dividend is distributed for this period Employees and Remuneration Policy As of June 30, 2023, the Group had 988 employees, a decrease from 1,046 in the prior period, with total remuneration and other benefits expenses for the first half of the year amounting to approximately RMB 45 million; the company provides regular and targeted training courses for its employees - As of June 30, 2023, the Group had 988 employees (1,046 in the prior period), with total remuneration expenses for the first half of the year approximately RMB 45 million (RMB 52.6 million in the prior period)[84] Post-Balance Sheet Events Two significant post-reporting period events occurred: (1) from late July to early August 2023, extreme heavy rainfall in Hebei Province affected the normal production of Jingyuancheng Mining and Jiheng Mining, with recovery expected in September; and (2) on August 29, 2023, Jiheng Mining, an indirect wholly-owned subsidiary, agreed to subscribe for 50 million new shares of Cangzhou Bank for an amount not exceeding RMB 115 million - Continuous extreme heavy rainfall in Laiyuan County, Baoding City, Hebei Province, affected the normal production and operations of the company's two main subsidiaries, with recovery expected in September 2023[110] - On August 29, 2023, Jiheng Mining, a subsidiary of the Group, agreed to subscribe for 50 million newly issued shares of Cangzhou Bank, with a subscription amount not exceeding RMB 115 million[235]