北京燃气蓝天(06828) - 2023 - 中期业绩

Summary Highlights The group achieved significant revenue and profit growth in H1 2023, driven by increased gas sales and strategic acquisitions, despite a decline in gross profit margin Key Financial Highlights | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,191.5 | 919.3 | 29.6 | | Gross profit | 44.6 | 40.6 | 9.8 | | Gross profit margin | 3.7% | 4.4% | (15.9) | | Profit for the period | 43.1 | 18.3 | 135.3 | | Profit attributable to owners of the Company | 32.3 | 20.0 | 61.6 | | Basic earnings per share (HK cents) | 0.14 | 0.15 | (6.7) | | Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) | 173.6 | 117.4 | 47.9 | - In H1 2023, the Group's total gas sales volume was 329.9 million cubic meters, a significant 84.0% increase year-on-year, primarily due to growing natural gas demand and the acquisition of the Guangxi Tengxian city gas project[97] - Profit attributable to owners of the Company increased by 61.6%, mainly due to growth in principal business revenue, reduced legal and professional fees (non-recurring item), and lower administrative expenses from continuous cost reduction and efficiency improvement initiatives[97] - The Board does not recommend declaring an interim dividend for H1 2023[107] Unaudited Interim Results This chapter presents the unaudited condensed consolidated interim results of Beijing Gas Blue Sky Holdings Limited and its subsidiaries for the six months ended June 30, 2023, with comparative figures for the same period in 2022 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group recorded significant growth in revenue, gross profit, and profit for the period in H1 2023, driven by business expansion and cost control, despite a decline in gross profit margin Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 1,191,450 | 919,261 | | Cost of sales | (1,146,846) | (878,622) | | Gross profit | 44,604 | 40,639 | | Other income and gains, net | 8,189 | 17,623 | | Administrative expenses | (71,929) | (96,128) | | Impairment reversal on financial assets, net | 22,972 | 14,768 | | Other expenses, net | (16,356) | (41,067) | | Finance costs | (76,700) | (52,772) | | Share of profit/(loss) of a joint venture | 160 | (600) | | Share of profit of associates | 135,650 | 137,114 | | Profit before tax | 46,590 | 19,577 | | Income tax expense | (3,506) | (1,269) | | Profit for the period | 43,084 | 18,308 | | Profit attributable to owners of the Company | 32,272 | 19,968 | | Profit/(loss) attributable to non-controlling interests | 10,812 | (1,660) | | Basic and diluted earnings per share (HK cents) | 0.14 | 0.15 | - Total comprehensive loss for the period was HK$(63,051) thousand, a narrowing from HK$(72,836) thousand in H1 2022[1][3] Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets and equity slightly decreased, while total current liabilities remained high, leading to an increase in net current liabilities Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 579,312 | 627,733 | | Investment properties | 68,302 | 73,415 | | Right-of-use assets | 777,044 | 777,044 | | Goodwill | 399,273 | 409,565 | | Operating rights | 25,601 | 24,719 | | Investments in a joint venture | 1,937,491 | 1,893,268 | | Total non-current assets | 3,843,058 | 3,856,001 | | Current assets | | | | Inventories | 21,790 | 20,255 | | Trade receivables | 116,532 | 111,821 | | Cash and cash equivalents | 354,982 | 554,062 | | Total current assets | 1,166,943 | 1,364,711 | | Current liabilities | | | | Trade and bills payables | 110,304 | 131,039 | | Bank and other borrowings | 1,575,357 | 1,700,276 | | Total current liabilities | 2,332,421 | 2,467,556 | | Non-current liabilities | | | | Bank and other borrowings | 750,822 | 770,512 | | Convertible bonds | 236,263 | 236,263 | | Total non-current liabilities | 1,111,456 | 1,123,981 | | Equity | | | | Total equity | 1,566,124 | 1,629,175 | | Net current liabilities | (1,165,478) | (1,102,845) | Notes to the Unaudited Condensed Consolidated Interim Financial Information This chapter provides detailed notes to the unaudited condensed consolidated interim financial information, covering company details, accounting policies, operating segment data, and explanations for financial statement changes General Information This section outlines the company's registration, listing, principal place of business, main activities, and ultimate controlling entity - The Company was incorporated in Bermuda, and its shares are listed on The Stock Exchange of Hong Kong Limited[131] - The Group is primarily engaged in the wholesale and distribution of compressed natural gas (CNG), liquefied natural gas (LNG), fuel oil, and other related oil by-products, pipeline distribution and sale of natural gas to residential, commercial, and industrial consumers, sale of gas-related equipment, provision of pipeline connection services, and operation of CNG and LNG vehicle refilling stations[8][112][132] - The Company's ultimate controlling entity is Beijing Enterprises Group Company Limited, a state-owned enterprise wholly owned by the Beijing Municipal People's Government State-owned Assets Supervision and Administration Commission[132] Basis of Preparation This section details the basis for preparing the condensed consolidated interim financial information, including compliance with IAS 34 and Listing Rules, and preparation on a going concern basis - The unaudited condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting issued by the International Accounting Standards Board and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[134] - The financial information is prepared on a going concern basis, assuming the realization of assets and settlement of liabilities in the normal course of business[133] Changes in Accounting Policies and Disclosures This section details new and amended IFRSs adopted for the period, including revisions to accounting policy disclosures, definition of accounting estimates, and deferred tax, assessing their impact on the Group's financial information - The Group applied IAS 1 (Amendment) Disclosure of Accounting Policies from January 1, 2023, which is expected to affect accounting policy disclosures in the annual consolidated financial statements but has no impact on the condensed consolidated interim financial information[12] - IAS 8 (Amendment) Definition of Accounting Estimates clarified the distinction between changes in accounting estimates and changes in accounting policies, with no impact on the Group's financial position or performance[136] - IAS 12 (Amendment) Deferred Tax related to Assets and Liabilities arising from a Single Transaction narrowed the scope of the initial recognition exemption, with no significant impact on the Group's condensed consolidated interim financial information[116][137] Seasonality of Operations This section highlights the seasonal fluctuations in the Group's natural gas business, with demand typically higher in the second half of the year due to winter heating needs - The Group's natural gas business experiences seasonal fluctuations, with demand generally higher in the second half of each year, primarily due to winter heating consumption[138] Operating Segment Information This section categorizes the Group's business into four reportable segments: city gas operations, direct supply to industrial customers, natural gas trading and distribution, and natural gas refilling stations, based on operational nature and services provided, presenting their revenue and performance Operating Segment Revenue and Profit/(Loss) | Segment | H1 2023 Revenue (HK$ thousand) | H1 2023 Segment Profit/(Loss) (HK$ thousand) | H1 2022 Revenue (HK$ thousand) | H1 2022 Segment Profit/(Loss) (HK$ thousand) | | :--- | :--- | :--- | :--- | :--- | | City gas operations | 517,213 | 121,307 | 332,044 | 112,936 | | Direct supply to industrial customers | 16,668 | 2,624 | 17,972 | (1,372) | | Natural gas trading and distribution | 634,452 | (7,937) | 549,329 | (11,496) | | Natural gas refilling stations | 23,117 | (1,012) | 19,916 | (534) | | Total | 1,191,450 | 114,982 | 919,261 | 99,534 | | Unallocated other income and gains, net | | 8,189 | | 17,623 | | Unallocated impairment reversal on financial assets, net | | 22,972 | | 14,768 | | Unallocated corporate expenses | | (22,853) | | (59,576) | | Finance costs | | (76,700) | | (52,772) | | Profit before tax | | 46,590 | | 19,577 | - Over 90% of the Group's revenue is derived from Mainland China, and over 90% of its non-current assets (excluding financial assets) are located in Mainland China, thus no geographical information is presented[142] Revenue This section provides an analysis of the Group's revenue for the reporting period, presented by business segment Revenue by Source | Revenue Source | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | City gas operations | 517,213 | 332,044 | | Direct supply to industrial customers | 16,668 | 17,972 | | Natural gas trading and distribution | 634,452 | 549,329 | | Natural gas refilling stations | 23,117 | 19,916 | | Total Revenue | 1,191,450 | 919,261 | Other Income and Gains, Net This section details the composition of the Group's other income and gains, and explains the reasons for their changes Other Income and Gains, Net | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Bank interest income | 1,387 | 1,281 | | Rental income | 880 | 716 | | Income from sales of gas appliances | – | 685 | | Government grants and subsidies | 563 | 1,782 | | Gain on disposal of a joint venture | – | 5,961 | | Fair value changes of financial assets at fair value through profit or loss | (23) | 679 | | Net exchange differences | (555) | (1,392) | | Others | 5,937 | 7,911 | | Total | 8,189 | 17,623 | - Other income and gains, net, decreased, primarily due to the recognition of a HK$6.0 million gain from the disposal of a joint venture in H1 2022, which was a one-off non-recurring item[67] Finance Costs This section analyzes the Group's finance costs for the reporting period, indicating an increase in total finance costs due to higher interest expenses on bank borrowings Finance Costs | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Interest expense on bank borrowings | 29,637 | 34,425 | | Interest expense on corporate bonds | 18,035 | 13,250 | | Interest expense on loan from direct holding company | 17,379 | – | | Interest expense on convertible bonds | 8,450 | – | | Interest expense on other borrowings | 2,970 | 4,620 | | Interest expense on lease liabilities | 229 | 477 | | Total | 76,700 | 52,772 | - Finance costs increased by 45.3% from HK$52.8 million in H1 2022 to HK$76.7 million in H1 2023, primarily due to higher interest expenses on bank and other borrowings resulting from an increase in HIBOR[165] Profit Before Tax This section lists the major expenses and income deducted or included in the calculation of profit before tax, including cost of inventories sold, depreciation, amortization, and employee benefit expenses Items Deducted/Included in Profit Before Tax | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 1,127,376 | 851,977 | | Depreciation of property, plant and equipment | 34,412 | 32,427 | | Depreciation of investment properties | 1,848 | 1,102 | | Depreciation of right-of-use assets | 3,766 | 7,512 | | Amortisation of operating rights | 10,292 | 4,020 | | Employee benefit expenses (including Directors' emoluments) | 42,471 | 51,152 | | Impairment reversal on financial assets, net | (22,972) | (14,768) | Income Tax This section explains the Group's income tax expense for the reporting period, primarily from Mainland China subsidiaries, with no taxable profit generated in Hong Kong Income Tax Expense | Item | For the 6 months ended June 30, 2023 (HK$ thousand) | For the 6 months ended June 30, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Current - Mainland China | 6,243 | 1,827 | | Deferred | (2,737) | (558) | | Total tax expense for the period | 3,506 | 1,269 | - The Group did not generate any taxable profit in Hong Kong for the six months ended June 30, 2023, and therefore no provision for Hong Kong profits tax was made for the period[147] Dividends This section explicitly states that the Board does not recommend declaring an interim dividend for the six months ended June 30, 2023 - The Board does not recommend declaring an interim dividend for the six months ended June 30, 2023 (H1 2022: nil)[35] Earnings Per Share This section provides the calculation and results for basic and diluted earnings per share, explaining the anti-dilutive effect of convertible bonds Basic and Diluted Earnings Per Share | Indicator | H1 2023 (HK cents) | H1 2022 (HK cents) | | :--- | :--- | :--- | | Basic and diluted earnings per share | 0.14 | 0.15 | - Basic earnings per share is calculated based on the profit attributable to owners of the Company of HK$32,272,000 (H1 2022: HK$19,968,000) and the weighted average number of ordinary shares outstanding during the period of 22,736,114,715 (H1 2022: 12,986,114,715)[148] - For the period ended June 30, 2023, the convertible bonds had an anti-dilutive effect on the presented basic earnings per share, thus no adjustment was made[178] Trade and Other Receivables This section provides an aging analysis of trade receivables and notes that their balance remained largely consistent with December 31, 2022 Aging Analysis of Trade Receivables | Aging | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Unbilled portion and billed within 3 months | 69,354 | 70,894 | | Billed: 4 to 6 months | 7,072 | 8,898 | | Billed: 7 to 12 months | 10,350 | 3,958 | | Billed: Over 1 year | 29,756 | 28,071 | | Total Trade Receivables | 116,532 | 111,821 | - The balance of trade receivables remained largely consistent with the balance as of December 31, 2022[168] Trade and Bills Payables This section provides an aging analysis of trade and bills payables and explains the main reasons for changes in their balances Aging Analysis of Trade and Bills Payables | Aging | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | | :--- | :--- | :--- | | Billed: Within 3 months | 48,652 | 24,780 | | Billed: 4 to 6 months | 10,913 | 19,362 | | Billed: 7 to 12 months | 11,884 | 9,553 | | Billed: Over 1 year | 32,470 | 53,748 | | Unbilled | 6,385 | 23,596 | | Total Trade and Bills Payables | 110,304 | 131,039 | - The balance of trade and bills payables decreased by HK$20.7 million, primarily due to the Group's payment of certain project costs during the period[73] Comparative Amounts This section states that certain comparative amounts have been reclassified and restated to conform to the current period's presentation - Certain comparative amounts have been reclassified and restated to conform to the current period's presentation[152] Management Discussion and Analysis This chapter comprehensively discusses the Group's operating results, financial position, industry overview, business review, future outlook, capital structure, and financial resource management for the reporting period, aiming to provide in-depth insights for investors Industry Overview This section outlines China's stabilizing economic recovery, challenges from complex international geopolitics, financial market volatility, and energy sector issues, while emphasizing national policy guidance on clean energy development - China's economy shows signs of stabilization and recovery, but complex international geopolitical situations, financial market volatility, and slow post-pandemic economic recovery pose challenges to the energy sector[153] - The National Energy Administration issued the 'Guiding Opinions on Energy Work in 2023,' aiming to increase the proportion of non-fossil energy in total energy consumption to approximately 18.3%, and wind and solar power generation to 15.3% of total electricity consumption[38] Business Review This section reviews the operational performance of the Group's various business segments, highlighting the significant increase in total gas sales volume, primarily driven by recovering natural gas demand and the acquisition of the Guangxi Tengxian city gas project Development and Operation of City Gas Business The city gas business recorded significant growth in H1 2023, with substantial increases in gas sales volume and revenue, primarily due to the acquisition of the Guangxi Tengxian city gas project, particularly for industrial users City Gas Business Performance | Indicator | H1 2023 | H1 2022 | Change % | | :--- | :--- | :--- | :--- | | Natural gas sales volume (million cubic meters) | 123.2 | 71.4 | 72.5 | | －Residential users | 42.7 | 40.5 | 5.4 | | －Non-residential users | 80.5 | 30.9 | 160.5 | | City gas business sales revenue (HK$ thousand) | 517.2 | 332.0 | 55.8 | | Natural gas sales and other services revenue (HK$ thousand) | 465.7 | 284.0 | 64.0 | | Connection revenue (HK$ thousand) | 51.5 | 48.0 | 7.3 | - Following the capital increase and asset injection completed at the end of 2022, the Group strengthened its high-quality asset portfolio in the city gas business and further expanded its city gas business footprint with the development of the city gas operator in Tengxian, Guangxi Zhuang Autonomous Region[26] - During the period, the Group added 13,442 new gas pipeline connection users, bringing the cumulative user count to 517,441, including 13,403 new residential users and 39 new non-residential users[41] LNG and CNG Trading and Distribution Business The Group's LNG and CNG trading and distribution business recorded significant growth in total trading volume and sales in H1 2023, primarily due to increased natural gas demand and optimized gas source procurement strategies LNG and CNG Trading and Distribution Performance | Indicator | H1 2023 | H1 2022 | Change % | | :--- | :--- | :--- | :--- | | Total trading volume (million cubic meters) | 198.9 | 100.5 | 97.9 | | Trading and distribution business sales (HK$ thousand) | 634.5 | 549.3 | - | - The Group adjusted its gas source procurement strategy in response to supply and demand, continuously optimizing its gas source structure and deepening cooperation with upstream suppliers, including entering into a master agreement for the purchase of LNG with its controlling shareholder, Beijing Gas Group[27] LNG Receiving Terminal Project The PetroChina Jingtang LNG Receiving Terminal Project, in which the Group holds an interest, saw an increase in total LNG offloading volume in H1 2023, mainly due to market recovery and increased demand post-pandemic LNG Receiving Terminal Offloading Volume | Indicator | H1 2023 (million cubic meters) | H1 2022 (million cubic meters) | Change % | | :--- | :--- | :--- | :--- | | Total LNG offloading volume | 3,096.0 | 2,992.1 | 3.5 | - PetroChina Jingtang's LNG receiving terminal is a major winter peak-shaving and supply guarantee station in the Beijing-Tianjin-Hebei region, and is China's largest LNG receiving terminal in terms of storage and peak-shaving capacity[188] Other Businesses Revenue from direct supply to industrial customers decreased, while gas sales volume and revenue from LNG and CNG refilling stations increased Other Business Revenue and Sales Volume | Business | H1 2023 Revenue (HK$ thousand) | H1 2022 Revenue (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Direct supply to industrial customers | 16.7 | 18.0 | (7.2) | | LNG and CNG refilling station business | 23.1 | 19.9 | 16.1 | | LNG and CNG refilling station sales volume (million cubic meters) | 4.6 | 3.9 | - | Future Outlook The Group anticipates a recovery in China's natural gas demand and will actively seize market opportunities under dual carbon goals, accelerating the development of renewable and clean energy to build a new energy business system - The Group will continue to implement national strategies for actively addressing climate change, accelerate the green transformation of its development model, and actively seek market opportunities through organic growth, acquisitions, and other means to accelerate the development of new energy businesses[160][189] - The Group has announced a potential acquisition of certain equity interests in an energy sector company and entered into a strategic cooperation framework agreement with Beijing Guoneng Guoyuan Energy Technology Co., Ltd., demonstrating its efforts to seek opportunities in the clean energy market[189] - China's natural gas demand is expected to show recovery growth in 2023, and the Group will deepen clean energy cooperation with relevant institutions or enterprises to promote the establishment of clean energy partnerships[190] Financial Review This section provides a detailed analysis of the Group's financial performance for the reporting period, including changes in revenue, gross profit, various expenses, profit, and major items of the condensed consolidated statement of financial position, along with their underlying reasons Revenue Revenue significantly increased, primarily attributed to higher income from natural gas trading and distribution business, and contributions from the acquisition of the Guangxi Tengxian city gas project Revenue Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 1,191.5 | 919.3 | 29.6 | - The increase in revenue was primarily attributable to higher income from the natural gas trading and distribution business, and contributions from the acquisition of the Guangxi Tengxian city gas project completed at the end of 2022[45] Gross Profit and Gross Margin Gross profit increased, but the gross profit margin decreased, mainly due to rising cost of sales from continuous adjustments in upstream prices Gross Profit and Gross Margin Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Gross profit | 44.6 | 40.6 | 9.8 | | Gross profit margin (%) | 3.7% | 4.4% | (15.9) | - The decline in gross profit margin was mainly due to rising cost of sales resulting from continuous adjustments in upstream prices[31] Other Income and Gains, Net Other income and gains, net, decreased, primarily due to the recognition of a one-off gain from the disposal of a joint venture in H1 2022 Other Income and Gains, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Other income and gains, net | 8.2 | 17.6 | - The decrease was due to the recognition of a HK$6.0 million gain from the disposal of a joint venture in H1 2022, which was a one-off item[67] Impairment Reversal on Financial Assets, Net Net impairment reversal on financial assets increased compared to the same period last year Impairment Reversal on Financial Assets, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Impairment reversal on financial assets, net | 23.0 | 14.8 | - Impairment reversal on financial assets increased by HK$8.2 million compared to H1 2022[68] Administrative Expenses Administrative expenses decreased, primarily due to cost reduction and efficiency improvement initiatives, leading to lower daily operating costs such as staff costs Administrative Expenses Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Administrative expenses | 71.9 | 96.1 | (25.2) | - The decrease in administrative expenses was mainly due to the implementation of cost reduction and efficiency improvement measures and further enhancement of the Group's operational efficiency, leading to lower daily operating costs (e.g., staff costs)[47] Other Expenses, Net Other expenses, net, significantly decreased, primarily due to the recognition of non-recurring legal and professional fees related to the company's share resumption in the prior year Other Expenses, Net | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Other expenses, net | 16.4 | 41.1 | - The decrease in other expenses was mainly due to lower recognition of legal and professional fees in the current period compared to the prior year, where professional fees related to the Company's share resumption were recognized in H1 2022 as a non-recurring item[194] Finance Costs Finance costs increased, primarily due to higher HIBOR for certain bank and other borrowings in H1 2023 compared to H1 2022 Finance Costs Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Finance costs | 76.7 | 52.8 | 45.3 | - The increase in finance costs was mainly due to higher HIBOR for certain bank and other borrowings of the Group in H1 2023 compared to H1 2022[165] Income Tax Income tax expense increased, primarily from current tax generated by Mainland China subsidiaries Income Tax Expense | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Income tax expense | 3.5 | 1.3 | - Income tax expense primarily refers to current tax of HK$6.2 million generated by its Mainland China subsidiaries[195] Profit Attributable to Owners of the Company Profit attributable to owners of the Company for the period significantly increased, primarily benefiting from growth in principal business revenue, reduced legal and professional fees, and lower administrative expenses Profit Attributable to Owners of the Company | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | | :--- | :--- | :--- | | Profit attributable to owners of the Company for the period | 32.3 | 20.0 | - Profit increased by HK$12.3 million, mainly due to growth in principal business revenue, reduced legal and professional fees (non-recurring item), and lower administrative expenses[154][166] Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) EBITDA significantly increased, primarily due to market recovery after the gradual subsidence of the global COVID-19 pandemic and continuous stringent cost control EBITDA Performance | Indicator | H1 2023 (HK$ thousand) | H1 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | EBITDA | 173.6 | 117.4 | 47.9 | - The increase in EBITDA was mainly due to the gradual subsidence of the global COVID-19 pandemic and continuous stringent cost control in H1 2023[46] Changes in Major Items of Condensed Consolidated Statement of Financial Position This section analyzes changes in major asset and liability items in the condensed consolidated statement of financial position, including non-current assets, current assets, current liabilities, and non-current liabilities Non-current Assets The balance of property, plant and equipment decreased, mainly affected by depreciation provisions and the depreciation of RMB against HKD; investments in associates increased, primarily due to share of profit and exchange rate fluctuations - The balance of property, plant and equipment decreased by HK$48.4 million compared to the end of 2022, mainly due to depreciation provisions and exchange rate fluctuations from the depreciation of RMB against HKD[71] - The net value of investments in associates increased compared to December 31, 2022, primarily due to the share of profit generated by associates during the period and the net impact of exchange rate fluctuations from the depreciation of RMB against HKD[197] - Goodwill arose from the acquisition of subsidiaries since 2015[167] Current Assets Cash and cash equivalents decreased, mainly due to repayment of bank and other borrowings; trade receivables remained largely stable - Cash and cash equivalents balance was HK$355.0 million, a decrease of HK$199.1 million from December 31, 2022, mainly due to the Group's repayment of bank and other borrowings during the period[198] - The balance of trade receivables remained largely consistent with the balance as of December 31, 2022[168] - The balance of prepayments, deposits, and other receivables remained largely consistent with the balance as of December 31, 2022[51] Current Liabilities Trade and bills payables decreased, mainly due to payment of project costs; other payables and accrued expenses increased, primarily due to higher advance receipts - The balance of trade and bills payables decreased by HK$20.7 million, primarily due to the Group's payment of certain project costs during the period[73] - The balance of other payables and accrued expenses increased compared to December 31, 2022, mainly due to an increase in the Group's advance receipts during the period[170] Non-current Liabilities The balance of bank and other borrowings remained largely consistent with December 31, 2022, primarily including a shareholder loan from Beijing Gas Group; convertible bonds also remained unchanged - Bank and other borrowings primarily refer to a HK$700 million shareholder loan from Beijing Gas Group to the Company, maturing on December 31, 2025, with its balance remaining largely consistent with December 31, 2022[169] - Convertible bonds refer to the HK$300 million principal amount of convertible bonds issued by the Company to Beijing Gas Group, maturing on December 28, 2025[52] Capital Structure and Financial Resources This section details the Group's funding sources, liquidity position, and strategies to reduce financial costs and exchange rate risks, including replacing HKD and USD borrowings with RMB borrowings - The Group finances its operations through shareholders' equity, bank and other borrowings, and convertible bonds[74] Capital Structure and Financial Resources | Indicator | June 30, 2023 (HK$ thousand) | December 31, 2022 (HK$ thousand) | Change % | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | 354,982 | 554,062 | (35.9) | | Total assets | 5,010,001 | 5,220,712 | (4.0) | | Total equity | 1,566,124 | 1,629,175 | (3.9) | | Net current liabilities | 1,165.5 | 1,102.8 | - | | Current ratio | 0.50 | 0.55 | - | | Debt-to-asset ratio | 68.7% | 68.8% | - | | Total borrowings | 2,562.4 | 2,707.1 | - | | Gearing ratio | 51.1% | 51.9% | - | | Net debt-to-equity ratio | 141.0% | 132.2% | - | - Starting from H1 2023, the Group began replacing HKD and USD bank and other borrowings with RMB bank borrowings to mitigate rising financial costs and reduce exchange rate fluctuation risks[55] Use of Proceeds from Capital Increase and Asset Injection Plan This section details the use of proceeds from the capital increase and asset injection plan, showing that most funds were used for loan repayment and general working capital, with the remainder allocated for business development Use of Proceeds from Capital Increase and Asset Injection Plan | Purpose | Designated Net Amount in Circular (HK$ million) | Amount Utilized up to Dec 31, 2022 (HK$ million) | Amount Utilized in H1 2023 (HK$ million) | Unutilized Amount as of June 30, 2023 (HK$ million) | % Utilized as of June 30, 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Repayment of existing bank borrowings | 1,013.0 | 1,013.0 | – | – | 100% | | Repayment of outstanding corporate bonds and related interest, and other Group borrowings | 337.0 | 87.2 | 249.8 | – | 100% | | Business development | 94.5 | – | – | 94.5 | 0% | | General working capital | 50.0 | – | 50.0 | – | 100% | | Total | 1,494.5 | 1,100.2 | 299.8 | 94.5 | 93.7% | - As of June 30, 2023, HK$94.5 million of the net proceeds from the capital increase and asset injection plan remained unutilized and is expected to be utilized within 2023[56] Employees Information This section provides information on the Group's employee headcount, principles for determining remuneration, and other benefits offered Employee Headcount | Indicator | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Total employees | 730 | 644 | - Employee remuneration is determined with reference to market conditions and individual performance, subject to periodic review. The Group also provides other employee benefits (including medical insurance) and grants discretionary incentive bonuses to eligible employees based on their performance and contributions to the Group[57] Pledge of Assets of the Group This section lists the Group's assets pledged as collateral for bank and other borrowings, including property, plant and equipment, investment properties, equity interests in subsidiaries, collection rights of receivables, and bank balances - As of June 30, 2023, the Group's assets pledged as collateral for bank and other borrowings were as follows: * Pledge of certain of the Group's property, plant and equipment * Pledge of the Group's equity interest in a subsidiary * Pledge of the Group's investment properties * Pledge of collection rights of receivables arising from natural gas sales by a subsidiary * Pledge of certain of the Group's bank balances[58][80][204] - Save as disclosed, as of June 30, 2023, the Group had not made any other pledges on its assets[96] Tax Relief This section states that the Company is unaware of any tax relief or exemption available to shareholders by virtue of holding the Company's securities - The Company is not aware of any tax relief or exemption available to shareholders by virtue of holding the Company's securities[79] Exchange Rate Fluctuation Risk This section discusses the exchange rate fluctuation risk faced by the Group, particularly between RMB and HKD, and outlines its mitigation strategies - The Group's principal debts and borrowings and reporting currency are denominated in HKD, while revenue is primarily denominated in RMB, exposing it to the risk of foreign exchange gains/losses arising from the settlement of debts and borrowings[58] - The Group will consider utilizing more RMB-denominated borrowings in the future and will continue to closely monitor RMB currency fluctuations, taking appropriate measures to mitigate currency risk[58] - In H1 2023, the Group did not enter into any financial instruments for hedging purposes or other hedging instruments to hedge exchange rate risk[202] Contingent Liabilities This section states that as of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities[59] Events After Reporting Period This section confirms that no significant events affecting the Company occurred after June 30, 2023, and up to the announcement date - No significant events affecting the Company occurred after June 30, 2023, and up to the date of this announcement[60] Other Information This chapter covers other important information, including the Group's dividend policy, significant acquisitions and disposals, material investment plans, continuing connected transactions, audit committee review, trading of listed securities, corporate governance, and board members Dividends The Board does not recommend declaring an interim dividend for H1 2023 - The Board does not recommend declaring an interim dividend for H1 2023[82] Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures Except as disclosed in this announcement, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures for the six months ended June 30, 2023 - Save as disclosed in this announcement, for the six months ended June 30, 2023, the Group had no significant acquisitions or disposals of subsidiaries, associates, and joint ventures[83] Material Investments and Future Plans for Material Investments or Capital Assets Except as disclosed in this announcement, as of the announcement date, the Group had no material investments or any plans for material investments or additions to capital assets approved by the Board - Save as disclosed in this announcement, as of the date of this announcement, the Group had no material investments or any plans for material investments or additions to capital assets approved by the Board[84] Continuing Connected Transactions The Company entered into a master agreement with Beijing Gas Group for the sale of LNG to the Company, which was approved by independent shareholders - The Company entered into a master agreement with Beijing Gas Group, whereby Beijing Gas Group agreed to sell LNG to the Company for the period from February 25, 2021, to December 31, 2023[85] - The entering into of the master agreement was approved by independent shareholders at the extraordinary general meeting held on May 5, 2021[61] Review by Audit Committee The Audit Committee reviewed the Group's accounting principles and standards, discussed and reviewed risk management, internal control, and reporting matters, as well as the Company's condensed consolidated financial statements and unaudited interim results for the six months ended June 30, 2023 - The Audit Committee has reviewed the accounting principles and standards adopted by the Group, and has discussed and reviewed risk management, internal control, and reporting matters[92] - The Audit Committee has also reviewed the Company's condensed consolidated financial statements and unaudited consolidated interim results for the six months ended June 30, 2023, with management[92] Purchase, Sale or Redemption of the Company’s Listed Securities During H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[63] Corporate Governance The Company adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules throughout H1 2023 - The Company adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix 14 to the Listing Rules throughout H1 2023[64] Compliance with the Model Code The Board confirms that all Directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the period ended June 30, 2023 - The Board, having made specific enquiries of all Directors, confirmed that all Directors complied with the Model Code for Securities Transactions by Directors of Listed Issuers throughout the period ended June 30, 2023[89] Publication of Results Announcement and Interim Report This interim results announcement is published on the HKEXnews website and the Company's website, and the interim report will be dispatched to shareholders and uploaded to the aforementioned websites in due course - This interim results announcement is published on the HKEXnews website (www.hkexnews.hk) and the Company's website (www.bgbluesky.com)[95](index=95&type=chunk) - The Company's interim report for H1 2023, containing all information required by the Listing Rules, will be dispatched to shareholders and uploaded to the aforementioned websites for review in due course[95] Board of Directors This section lists the composition of the Board of Directors as of the announcement date, including executive, non-executive, and independent non-executive directors - As of the date of this announcement, the executive Directors are Mr. Li Weiqi, Mr. Wu Haipeng, Mr. Chen Ning, and Mr. Yang Shuoxuan; the non-executive Directors are Mr. Zhi Xiaoye and Mr. Shao Dan; and the independent non-executive Directors are Mr. Cui Yulei, Ms. Xu Huimin, and Mr. Xu Jianwen[95] Date of Announcement This section specifies the date of issuance for this announcement - Hong Kong, August 30, 2023[66]