Financial Performance - Revenue for the year ended December 31, 2023, was HK$114,570,000, a decrease of 37.7% from HK$184,020,000 in 2022[29]. - Gross profit for 2023 was HK$3,062, compared to HK$486 in 2022, indicating a significant improvement despite lower revenue[30]. - Operating loss increased to HK$38,456,000 in 2023 from HK$11,985,000 in 2022, reflecting ongoing challenges in the business[30]. - Loss for the year was HK$35,905,000, compared to a loss of HK$11,199,000 in the previous year, highlighting a worsening financial position[30]. - Administrative expenses rose to HK$18,364,000 in 2023, up from HK$17,903,000 in 2022, indicating increased operational costs[30]. - The company reported a provision for impairment losses on trade receivables and contract assets of HK$12,224,000 in 2023, compared to HK$220 in 2022, suggesting increased credit risk[30]. - Other income, net, was HK$277,000 in 2023, down from HK$5,652,000 in 2022, indicating a decline in ancillary revenue sources[30]. - The company is facing significant challenges in maintaining profitability, as evidenced by the substantial increase in losses year-over-year[30]. - The Group recorded a net loss of approximately HK$35.9 million for the year, compared to a net loss of approximately HK$11.2 million in 2022, primarily due to fewer revenue-generating projects and a lack of COVID-19 relief funds[84]. - The absence of non-recurring COVID-19 relief and subsidies of approximately HK$5.6 million contributed to the increased net loss[122]. Impairment and Credit Risk - Impairment loss on trade receivables increased from HK$2,203,000 in 2022 to HK$2,328,000 in 2023, reflecting a rise of approximately 5.7%[3]. - The impairment loss recognized for trade receivables included HK$126,000 in 2023, compared to HK$205,000 in 2022, indicating a decrease of about 38.5%[3]. - The total impairment loss recognized for trade receivables at the beginning of the year was HK$2,203,000, with an exchange difference adjustment of HK$1,000[3]. - The Group's ongoing business relationships with customers were evaluated to support the ECL assessment, highlighting the importance of customer creditworthiness[15]. - The impairment assessment of trade receivables and contract assets was identified as a key audit matter due to the significant amounts involved and the management's use of judgment in the ECL assessment[15]. - Impairment losses on trade receivables and contract assets totaled approximately HK$12.2 million, primarily due to expected credit losses on projects in Macau and Hong Kong[92][94]. Assets and Liabilities - Total assets decreased from approximately HK$186.2 million in 2022 to approximately HK$130.8 million in 2023[102]. - Total liabilities decreased from approximately HK$84.6 million in 2022 to approximately HK$65.1 million in 2023[102]. - Net assets decreased from approximately HK$101.6 million in 2022 to approximately HK$65.7 million in 2023[105]. - Total equity decreased from approximately HK$101.6 million in 2022 to approximately HK$65.7 million in 2023, with reserves dropping from approximately HK$95.1 million to approximately HK$59.2 million[105]. - The Group's cash and cash equivalents decreased from approximately HK$12.0 million in 2022 to approximately HK$6.0 million in 2023[102]. Operational Challenges - The Group's performance was affected by challenges such as labor shortages, high material and labor costs, and intense competition in the bidding process[83]. - The Group's revenue decrease was also attributed to a reduction of approximately HK$46.3 million from the completion of certain projects during the relevant period[89]. - The Group's revenue decline included a decrease of approximately HK$58.6 million due to reduced work under existing projects compared to 2022[89]. - The Group anticipates that the financial results for the year ending December 31, 2024, may be impacted by the prevailing macroeconomic landscape and challenges in the construction sector[85]. Corporate Governance - The Company has complied with the applicable code provisions of the Corporate Governance Code except for code C.2.1 during the Relevant Period[49]. - The Company has a structured board with various committees including Audit, Remuneration, and Nomination Committees[43]. - The Board comprises five Directors, including two executive Directors and three independent non-executive Directors as of December 31, 2023[197]. - The Company has mechanisms in place for independent non-executive Directors to express their views openly and confidentially when necessary[199]. - The independence of each independent non-executive Director is assessed upon appointment and annually, maintaining effective corporate governance[199]. Employee and Workforce Management - As of December 31, 2023, the Group had a total of 127 employees who received safety training, emphasizing the importance of construction management and safety[60]. - The Group aims to maintain an employee turnover rate of approximately 3% to promote skill and experience accumulation[55]. - The Group employed a total of 165 employees, a decrease from 230 employees as of December 31, 2022, primarily due to the completion of certain large projects[147]. - The staff costs, including Directors' emoluments, were approximately HK$22.7 million for the Relevant Period, down from approximately HK$27.2 million in 2022[147]. Future Strategies - Future strategies may need to focus on cost management and revenue diversification to improve financial stability[30]. - The Group remains committed to enhancing its financial performance by optimizing tendering strategies and seeking new investment opportunities[85]. Compliance and Reporting - The consolidated financial statements for the Relevant Period have been audited by Mazars, who will offer themselves for re-appointment at the forthcoming AGM[48]. - The Group's financial position as of December 31, 2023, was reported to be in accordance with Hong Kong Financial Reporting Standards[66]. - The Group's consolidated financial statements are presented in HK$, which is the functional and presentation currency[174]. Risk Management - The management identified principal risks including potential pandemics affecting operations, reliance on successful tenders, and cost overruns impacting profitability[135]. - The Group's reliance on major customers exposes it to credit and liquidity risks, which may impact cash flow and financial conditions[135].
荣丰集团亚洲(08526) - 2023 - 年度财报