大陆航空科技控股(00232) - 2023 - 中期业绩

Financial and Business Highlights Financial Highlights For the six months ended June 30, 2023, the Group reported HKD 929 million in revenue, an 8.8% increase, and HKD 80.48 million in profit, up 37.9%, primarily due to deferred tax credits from a US subsidiary's taxable profits, with basic EPS rising to HK 0.87 cents Key Financial Indicators for H1 2023 | Indicator | For the six months ended June 30, 2023 (HKD) | For the six months ended June 30, 2022 (HKD) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 928,696,000 | 853,449,000 | +8.8% | | Gross Profit | 296,325,000 | 239,132,000 | +23.9% | | Profit for the Period | 80,480,000 | 58,350,000 | +37.9% | | Basic Earnings Per Share | 0.87 HK cents | 0.63 HK cents | +38.1% | - Profit growth was primarily due to a US subsidiary beginning to generate taxable profits during the period, leading to the recognition of deferred income tax credits related to prior years' tax losses[79][22] - During the period, HKD 54.81 million in costs from product recalls were recognized under "Other operating expenses," impacting profit[21][37] Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss Revenue for the period increased to HKD 929 million from HKD 853 million in the prior year, and despite HKD 54.81 million in additional operating expenses, profit for the period rose from HKD 58.35 million to HKD 80.48 million due to income tax credits Profit or Loss Statement Summary (HKD thousands) | Item | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 928,696 | 853,449 | | Gross Profit | 296,325 | 239,132 | | Other Operating Expenses | (54,810) | – | | Profit Before Tax | 34,945 | 50,625 | | Income Tax Credit | 45,535 | 7,725 | | Profit for the Period | 80,480 | 58,350 | Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for the period significantly increased to HKD 84.1 million from HKD 44.5 million in the prior year, primarily due to higher profit and exchange gains from foreign operations translation Total Comprehensive Income (HKD thousands) | Item | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | 80,480 | 58,350 | | Exchange Differences Arising from Translation of Foreign Operations | 3,601 | (21,401) | | Total Comprehensive Income Attributable to Equity Holders of the Company for the Period | 84,081 | 44,545 | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's net assets increased to HKD 2.903 billion, with total assets at HKD 3.910 billion and net current assets at HKD 1.149 billion, reflecting a robust financial position and slight increases in cash, trade receivables, and inventories compared to year-end 2022 Financial Position Statement Summary (HKD thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 2,259,037 | 2,290,638 | | Total Current Assets | 1,651,136 | 1,509,210 | | Total Assets | 3,910,173 | 3,799,848 | | Total Current Liabilities | 502,002 | 422,783 | | Total Non-current Liabilities | 505,199 | 558,174 | | Total Liabilities | 1,007,201 | 980,957 | | Net Assets | 2,902,972 | 2,818,891 | | Total Equity | 2,902,972 | 2,818,891 | Notes to the Financial Statements Basis of Preparation and Accounting Policies These interim financial statements are prepared under HKAS 34 and incorporate new HKFRSs, with Pillar Two Model Rules amendments impacting disclosures but not materially affecting the Group's financial position - The interim financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" and is unaudited[41] - Several new and revised standards have been adopted, none of which have a significant financial impact except for amendments to HKAS 12[11][18] - The Group has retrospectively applied amendments related to international tax reform (Pillar Two Model Rules) and is assessing its exposure to Pillar Two income tax[43] Operating Segments and Revenue The Group operates solely in the general aviation aircraft piston engine business, with total revenue of HKD 929 million for the period, predominantly from aircraft engine and spare parts sales, and the United States as the primary market, contributing over 80% of revenue - The Group has only one reportable operating segment: the design, development, production, and after-sales service of general aviation aircraft piston engines and spare parts[20][33] Revenue by Type and Region (HKD thousands) | Revenue Classification | H1 2023 | H1 2022 | | :--- | :--- | :--- | | By Type | | | | Sales of Aircraft Engines and Spare Parts | 894,629 | 810,151 | | Provision of Services | 34,067 | 43,298 | | Total | 928,696 | 853,449 | | By Region | | | | United States | 747,421 | 690,834 | | Europe | 112,383 | 106,583 | | Others | 68,892 | 56,032 | | Total | 928,696 | 853,449 | Income Tax and EPS The period recorded an income tax credit of HKD 45.54 million, primarily due to deferred tax asset recognition from a US subsidiary's taxable profits, resulting in basic EPS of HK 0.87 cents, up from HK 0.63 cents in the prior year - As a US subsidiary began generating taxable profits, the Group recognized HKD 49.92 million in deferred tax assets, leading to an income tax credit of HKD 45.54 million for the period[22] Earnings Per Share Calculation | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders (HKD thousands) | 80,480 | 58,350 | | Number of Ordinary Shares in Issue | 9,303,374,783 | 9,303,374,783 | | Basic Earnings Per Share (HK cents) | 0.87 | 0.63 | Dividends For the six months ended June 30, 2023, the company neither paid, declared, nor proposed any dividends - The company neither paid, declared, nor proposed any dividends for the six months ended June 30, 2023 (2022: Nil)[26] Management Discussion and Analysis Business Review In H1 2023, the general aviation manufacturing industry showed unexpected resilience, with piston engine deliveries growing 10.1% year-on-year, indicating strong demand that drove the Group's robust shipments, revenue, and gross profit growth - The General Aviation Manufacturers Association (GAMA) reported a 10.1% year-on-year increase in piston engine deliveries compared to H1 2022, indicating strong industry demand[80] - Benefiting from the strong performance of the general aviation industry, the Group's shipments were also robust compared to H1 2022 and the annual operating plan[80] - The Group's aviation gasoline piston engines have re-attracted interest from contract manufacturing partners, such as Tecnam Aircraft selecting the GTSIO-520-S engine[89] Financial Review The Group maintains sufficient working capital and a robust capital structure, with total cash and bank balances reaching HKD 850 million at period-end, and a gearing ratio slightly decreased from 9.4% to 9.1%, indicating low financial risk and minimal foreign exchange exposure - The Group maintains sufficient working capital, with total cash, bank balances, and time deposits amounting to HKD 850 million as of June 30, 2023[59] - The gearing ratio, calculated as interest-bearing debt as a percentage of total equity plus interest-bearing debt, was 9.1% (December 31, 2022: 9.4%), indicating a low level[60] - As of June 30, 2023, the Group had 564 employees, an increase of 30 from year-end 2022, with employee wages and salaries for the period totaling HKD 136 million[64] Outlook The Group maintains a healthy order book extending into 2024, focusing on enhancing production capacity and technological innovation through completing the "Bluefin Project" in Mobile, USA, promoting the FAA-certified CD300 jet fuel engine, and continuing R&D in sustainable aviation fuels like HVO to solidify market leadership - The order book remains healthy and extends into 2024[66] - The "Bluefin Project" for the advanced manufacturing facility in Mobile, Alabama, USA, is nearing completion, which will enhance production capacity and shorten delivery times[66] - The CD300 jet fuel piston engine has received its FAA validation type certificate, making it available for use by pilots in the United States[67] - The Group is completing testing of hydrotreated vegetable oil (HVO) as a sustainable fuel option for the CD100 series engines, committed to reducing carbon emissions[90] Corporate Governance and Other Information Corporate Governance The company is committed to maintaining high corporate governance standards, having complied with all code provisions of the Listing Rules' Corporate Governance Code during the period, with directors also adhering to the standard code for securities transactions - For the six months ended June 30, 2023, the company has implemented and complied with all code provisions of the Corporate Governance Code[70] - All directors have confirmed compliance with the company's adopted standard code for securities transactions during the period[94] Audit Committee and Review of Interim Results The company has established an Audit Committee comprising three independent non-executive directors, which, along with Ernst & Young, has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2023 - The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting, risk management, and internal control systems[72] - The unaudited interim financial information for the period has been reviewed by both the Audit Committee and the independent auditor, Ernst & Young[3] Purchase, Redemption or Sale of Listed Securities During the reporting period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities during the period[71]