齐合环保(00976) - 2023 - 中期业绩

Financial Performance Summary Consolidated Income Statement The company experienced significant declines in revenue and profit attributable to owners in H1 2023, driven by global economic downturn and weak metal demand Key Income Statement Data for H1 2023 | Metric | Six Months Ended June 30 (HKD million) | YoY Change | | :--- | :--- | :--- | | Revenue | 2023: 8,821.7
2022: 11,826.0 | -25.4% | | Gross Profit | 2023: 561.3
2022: 701.2 | -20.0% | | Profit Before Income Tax | 2023: 100.7
2022: 301.1 | -66.6% | | Profit for the Period | 2023: 50.2
2022: 185.4 | -72.9% | | Profit Attributable to Owners of the Company | 2023: 53.2
2022: 199.5 | -73.3% | | Basic Earnings Per Share (HKD) | 2023: 0.03
2022: 0.12 | -75.0% | Consolidated Statement of Comprehensive Income The company achieved a turnaround to total comprehensive income in H1 2023, primarily driven by positive exchange differences compared to a prior-year loss Total Comprehensive Income/(Loss) for H1 2023 | Metric | Six Months Ended June 30 (HKD million) | | :--- | :--- | | Profit for the Period | 2023: 50.2
2022: 185.4 | | Exchange Differences | 2023: 78.3
2022: (390.1) | | Total Comprehensive Income/(Loss) for the Period | 2023: 128.9
2022: (205.0) | Consolidated Balance Sheet The Group's total assets and equity showed slight growth as of June 30, 2023, maintaining a stable asset structure Balance Sheet Summary | Metric (HKD million) | As of June 30, 2023 | As of December 31, 2022 | | :--- | :--- | :--- | | Total Assets | 8,816.4 | 8,573.0 | | Total Liabilities | 3,906.8 | 3,792.3 | | Total Equity | 4,909.6 | 4,780.7 | Notes to the Financial Statements Going Concern Basis Despite significant uncertainties from maturing current borrowings, the Board maintains the going concern basis, supported by active refinancing and cash flow management efforts - The company is negotiating new secured long-term borrowings of no less than HKD 783.6 million with financial institutions to address maturing debt[24] Liquidity Position as of June 30, 2023 | Metric | Amount (HKD million) | | :--- | :--- | | Cash and Cash Equivalents | 351.1 | | Total Borrowings | 928.8 | | Current Borrowings | 801.6 | Segment Information Europe remains the dominant segment despite declining revenue and profit, while Asia's loss expanded and North America's operations significantly contracted Revenue and Profit/(Loss) by Segment (Six Months Ended June 30) | Segment | Revenue (HKD million) | Segment (Loss)/Profit (HKD million) | | :--- | :--- | :--- | | | 2023 / 2022 | 2023 / 2022 | | Asia | 679.0 / 888.8 | (102.6) / (64.0) | | Europe | 8,138.7 / 10,910.3 | 337.4 / 425.7 | | North America | 4.0 / 26.9 | (5.9) / 26.9 | Earnings Per Share Basic earnings per share for H1 2023 significantly declined to HKD 0.03, a 75% drop, due to reduced profit attributable to owners Basic Earnings Per Share Calculation | Metric | Six Months Ended June 30 | | :--- | :--- | | | 2023 / 2022 | | Profit Attributable to Owners of the Company for the Period (HKD million) | 53.2 / 199.5 | | Weighted Average Number of Ordinary Shares in Issue (thousand shares) | 1,605,153 / 1,605,153 | | Basic Earnings Per Share (HKD) | 0.03 / 0.12 | Management Discussion and Analysis Chairman's Statement The Chairman highlighted macroeconomic headwinds impacting H1 2023 sales and revenue, while the Group responded by deepening lean management, advancing strategic projects, and fostering technological innovation - Affected by macroeconomic headwinds, total sales volume in H1 2023 was 1.9 million tonnes, with revenue of HKD 8.8217 billion, falling short of expected growth[57] - The Group achieved phased progress in metal recycling projects in Central Europe (Hungary, Czech Republic) and Southeast Europe (Balkan region), aiming to expand its business network[58] - The Group is deeply collaborating with a German automaker to explore intelligent recycling processes for enhancing the quality of secondary raw materials from end-of-life vehicles, securing German government funding[58] Operations and Business Review The Group navigated a challenging economic environment by improving European margins, expanding in Central and Southeast Europe, growing Asian joint venture capacity, and strategically downsizing North American operations - The European region successfully increased its gross margin from 6.5% to 7.8% by implementing a 'stable operating foundation' strategy[72] - A new metal recycling yard in the Czech Republic is scheduled for completion by September 2023, expected to add 500,000 tonnes of annual capacity[72] - The joint venture project in Zouping, Shandong, in the Asian market, has achieved recycled aluminum production capacity exceeding 1,500 tonnes per month and is steadily increasing[73] Financial Review The Group's H1 2023 financial performance weakened with a 25.4% revenue decline, yet gross margin improved to 6.4% and operating expenses decreased due to strategic focus and cost control Key Financial Indicators for H1 2023 | Metric | H1 2023 | H1 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue (HKD million) | 8,821.7 | 11,826.0 | -25.4% | | Gross Profit (HKD million) | 561.3 | 701.2 | -20.0% | | Gross Margin | 6.4% | 5.9% | +0.5pp | | Operating Expenses (HKD million) | 484.8 | 525.2 | -7.7% | Liquidity and Financial Resources The Group faces liquidity challenges from maturing debt despite an improved gearing ratio and reduced external borrowings, with management actively pursuing refinancing Key Liquidity and Gearing Ratios | Metric | As of June 30, 2023 | As of December 31, 2022 | | :--- | :--- | :--- | | Current Ratio | 1.34 | 1.31 | | Gearing Ratio | 10.5% | 13.3% | - Total external borrowings decreased by HKD 213.3 million from end-2022 to HKD 928.8 million[83] Working Capital Changes The Group significantly improved its net operating cycle, demonstrating better working capital management efficiency despite a slight increase in inventory turnover days Working Capital Turnover Days (H1) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Inventory Turnover Days | 30 | 25 | | Accounts Receivable Turnover Days | 31 | 32 | | Accounts Payable Turnover Days | 34 | 33 | Business Review by Segment Europe improved gross margin despite revenue decline, North America recorded a loss due to strategic transformation, and Asia's loss expanded with reduced revenue - Europe: Revenue was HKD 8.225 billion (YoY -25.0%), with gross margin improving to 7.8%, and segment profit at HKD 337 million[115] - North America: Business transformation led to revenue decreasing to HKD 4 million, resulting in a segment loss of HKD 5.9 million[116][118] - Asia: Revenue was HKD 763 million (YoY -14.6%), with segment loss expanding to HKD 103 million[119] Outlook Management anticipates continued economic headwinds in H2 2023 but remains optimistic about long-term recovery driven by circular economy and decarbonization, focusing on strategic optimization and innovation across regions - At the macro level, 'circular economy' and 'decarbonization transformation' will continue to be long-term demands across economies, presenting development opportunities for the industry[69] - Europe strategy: Stabilize existing business, optimize product structure, and innovate production technology[69] - Asia strategy: Seize opportunities from China's carbon neutrality goals, explore new markets, identify new growth drivers, and enhance independent R&D capabilities[69] Other Important Information Controlling Shareholder Restructuring The company's indirect controlling shareholder is undergoing court-supervised restructuring, which the Board believes has no material adverse effect on the company's independent operations or financial position - The company's indirect controlling shareholders (e.g., Loncin Group) are implementing a restructuring plan, but the Board believes it has no material adverse impact on the independently operated company[128][136] - The Hong Kong SFC has confirmed that this restructuring will not trigger mandatory general offer obligations under the Takeovers Code[128] Corporate Governance The company complied with the Corporate Governance Code, resolving a temporary deviation where the Chairman and CEO roles were combined by reappointing independent individuals and restoring duty segregation - The company briefly deviated from the Corporate Governance Code's requirement for separation of Chairman and Chief Executive Officer roles[147] - Effective March 21, 2023, Mr. Qin Yongming was appointed Chairman and Mr. Zhang Wei was appointed Chief Executive Officer, bringing the company into full compliance with the Code[148] Interim Dividend The Board does not recommend an interim dividend for the six months ended June 30, 2023 - The company has neither paid nor proposed any dividends for the current or prior interim periods[63][153]