Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 22,565 million, a slight increase of 2.3% compared to RMB 22,059 million in the same period of 2023[5]. - Gross profit for the same period was RMB 900 million, up from RMB 719 million in 2023, reflecting a gross margin improvement[5]. - Profit for the period attributable to owners of the Company was RMB 94 million, a significant decrease of 66.7% from RMB 282 million in 2023[5]. - Basic earnings per share for the six months ended June 30, 2024, was RMB 0.03, down from RMB 0.08 in 2023[5]. - The Group recorded a revenue of approximately RMB 22.57 billion for the six months ended June 30, 2024, representing an increase of approximately 2.3% compared to the same period last year[40]. - The overall gross profit increased by approximately 14.4% to approximately RMB 6.43 billion for the same period[40]. - The interim net profit was approximately RMB 123 million, a decrease of approximately 55.4% compared to RMB 276 million for the corresponding period last year[41]. - The Group's EBITDA for the period decreased from approximately RMB 1.05 billion to approximately RMB 815 million[41]. - For the six months ended June 30, 2024, the profit for the period was approximately RMB 123,029,000, a decrease of 55.5% compared to RMB 276,135,000 for the same period in 2023[102]. - The adjusted profit for the period was RMB 123,029,000, down 43.7% from RMB 218,430,000 in the previous year[102]. Sales and Production - Average selling price per tonne of self-manufactured steel products decreased to RMB 3,505 in 2024 from RMB 3,599 in 2023, indicating a decline of 2.6%[12]. - Total sales volume of self-manufactured steel products for the six months ended June 30, 2024, was 3,762,000 tonnes, a decrease of 3.1% compared to 3,881,000 tonnes in 2023[18]. - The sales volume of H-section steel products decreased to 1,614,000 tonnes in 2024 from 1,945,000 tonnes in 2023, a decline of 17.0%[18]. - In the first half of 2024, the Group's total sales volume of self-manufactured steel products was approximately 3.76 million tonnes, a decrease of approximately 3.1% compared to 3.88 million tonnes in the corresponding period of 2023[63][64]. - The sales of H-section steel products amounted to approximately 1.61 million tonnes, accounting for 42.9% of total sales volume, which represents a decrease of 17.0% compared to the previous year[66]. Market Conditions - The overall business environment of China's iron and steel industry in the first half of 2024 improved compared to the second half of 2023, but still maintained a pattern of "strong supply, weak demand, low prices, and high costs"[32]. - The demand for steel used in engineering machinery decreased due to the drag from the real estate sector, contributing to the overall weakness in downstream demand for steel products[31]. - The outlook for the iron and steel industry indicates that downstream demand will remain low, but infrastructure investment growth is expected to rebound in the second half of 2024[83]. - The overall business environment for the iron and steel industry is expected to face uncertainties in the second half of 2024, but the development trend is anticipated to gradually improve[83]. Strategic Initiatives - The Group aims to adopt a "specialisation, industry chain extension, high-tech and high-end" strategy for transformation and upgrading, focusing on innovation-driven high-quality development[31]. - The Group plans to enhance its core competitiveness by improving efficiency, reducing costs, and increasing the proportion of high value-added products[84]. - The Group will continue to promote the development of various steel products, including H-section steel and marine steel, while expanding its trading business in steel products and raw materials[84]. - The Group is exploring technology solutions for carbon reduction and investing in equipment upgrades to achieve better cost efficiency and reduce emissions[89]. - The Group aims to enhance energy efficiency and low-carbon transformation capabilities in the iron and steel industry, with policies focusing on energy efficiency improvement and carbon peaking[39]. Financial Position - The Company reported a net asset value of RMB 24,933 million as of June 30, 2024, a slight decrease from RMB 24,978 million as of December 31, 2023[9]. - Total assets increased to RMB 52,215 million as of June 30, 2024, up from RMB 50,030 million as of December 31, 2023[9]. - The Group's financial position remains sound, and it will strive to make effective use of its resources for future growth[31]. - As of June 30, 2024, the Group had unutilised banking facilities of approximately RMB 15.1 billion, an increase from RMB 13.9 billion as of December 31, 2023[104]. - The current ratio as of June 30, 2024 was approximately 1.4 times, up from 1.2 times as of December 31, 2023[109]. - The cash and cash equivalents of the Group amounted to approximately RMB 5,347 million as of June 30, 2024, compared to RMB 3,618 million as of December 31, 2023[110]. - The debt-to-capital ratio as of June 30, 2024 was approximately 71.0%, an increase from 63.0% as of December 31, 2023[112]. - Consolidated interest expenses for the six months ended June 30, 2024 were approximately RMB 280 million, compared to RMB 241 million for the same period in 2023[113]. Investment and Dividends - The Group did not recommend the distribution of an interim dividend for 2024 due to current challenges in the iron and steel industry[44]. - The Group will evaluate the possibility of increasing dividend distributions to reward shareholders under appropriate circumstances[90]. - The Board proposed a special dividend of approximately HK$ 186 million (equivalent to approximately RMB 170 million) for the year ended December 31, 2023, which was approved by shareholders[127]. - The Group's strategy includes specialization, industry chain extension, and high-tech development to drive transformation and upgrading[93]. Real Estate and Construction - The Group recorded revenue and operating profit from its real estate business of approximately RMB 23 million and RMB 4 million, respectively, in the first half of 2024[58][61]. - A provision of approximately RMB 201 million was made for impairment of properties under development and held for sale related to the real estate industry in second-and-lower-tier cities in the PRC for the financial year ended December 31, 2023[97]. - The Group expects the real estate market in the PRC to gradually stabilize due to various market stabilization measures introduced by the government[98]. - The Group has a project under construction with a gross floor area of approximately 248,000 m², expected to be completed in 2029[81]. Environmental and Regulatory Compliance - The NDRC and other ministries issued a "Special Action Plan for Energy Conservation and Carbon Reduction in the Iron and Steel Industry" in May 2024, aiming to regulate crude steel production and reduce energy consumption intensity[34]. - By the end of 2025, the target is to increase the proportion of electric arc furnace steel production to 15% of total crude steel production and achieve 30% of production at or above benchmark energy efficiency levels[34]. - The Group will actively explore new models and paths that align with green development concepts to promote sustainable development[31]. - The Group is committed to green, low-carbon, and sustainable development through effective capital and asset allocation[95].
中国东方集团(00581) - 2024 - 中期财报