Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 292,195 thousand, a decrease of 24.26% compared to HKD 385,769 thousand for the same period in 2023[2]. - Gross profit for the same period was HKD 49,913 thousand, down 55.19% from HKD 111,382 thousand year-over-year[2]. - The company reported a net loss of HKD 77,301 thousand, which is a 104.65% increase in losses compared to HKD 37,773 thousand in the previous year[2]. - EBITDA for the six months was HKD 45,640 thousand, reflecting a decrease of 48.61% from HKD 88,819 thousand in the prior year[2]. - The total loss before tax for the period was HKD 27,442,000[16]. - The company reported a total revenue of HKD 385,769,000 for the six months ended June 30, 2023, with a significant portion coming from water supply and wastewater treatment services[16]. - The net loss for the first half of 2024 was approximately HKD 77.3 million, compared to a net loss of HKD 37.77 million in the first half of 2023, representing an increase in loss of 104.5%[53]. - Revenue decreased from HKD 385.77 million in the first half of 2023 to HKD 292.2 million in the first half of 2024, a decline of 24.3%[54]. - Gross profit fell from HKD 111.38 million in the first half of 2023 to HKD 49.91 million in the first half of 2024, a decrease of 55.3%[54]. - The gross profit margin for the first half of 2024 was 17.1%, down from 28.9% in the first half of 2023[53]. Assets and Liabilities - Total assets as of June 30, 2024, were HKD 3,262,822 thousand, down 3.20% from HKD 3,370,677 thousand as of the same date in 2023[2]. - Total liabilities decreased slightly to HKD 1,714,282 thousand, a reduction of 0.88% from HKD 1,729,433 thousand year-over-year[2]. - The current ratio was 1.05 times, down 10.26% from 1.17 times in the previous year[2]. - Cash and cash equivalents decreased by 47.88% to HKD 77,541 thousand from HKD 148,785 thousand in the prior year[2]. - The company’s asset-to-liability ratio increased to 52.54%, up 2.40% from 51.31% in the previous year[2]. - As of June 30, 2024, total assets amounted to HKD 2,125,115, a decrease from HKD 2,300,476 as of December 31, 2023, reflecting a decline of approximately 7.6%[8]. - Current liabilities totaled HKD 1,137,707, an increase from HKD 1,070,201, indicating a rise of about 6.3%[8]. - The company’s total liabilities reached HKD 3,262,822 million, with significant contributions from various business segments[22]. - The total liabilities of the group as of June 30, 2024, were HKD 1,714,280,000, down from HKD 1,729,430,000 as of December 31, 2023, reflecting a reduction of HKD 15,150,000 primarily due to the repayment of additional bank borrowings and lease liabilities[83]. Revenue Breakdown - Water supply services revenue decreased to HKD 53,096,000 from HKD 58,666,000, a decline of 9%[13]. - Wastewater treatment services revenue increased to HKD 46,437,000 from HKD 43,400,000, a growth of 7%[13]. - Revenue from water-related installation and construction services dropped to HKD 57,550,000 from HKD 93,775,000, a significant decrease of 39%[13]. - Revenue from electricity sales decreased to HKD 91,001,000 from HKD 156,602,000, a decline of 42%[13]. - The segment "Water Supply, Wastewater Treatment and Construction Services" reported a profit of HKD 31,539,000, while "Renewable Energy Development and Sales" incurred a loss of HKD 16,804,000[16]. - The total revenue from the water supply business for the first half of 2024 was HKD 53.09 million, a decrease of HKD 5.58 million compared to HKD 58.67 million in the same period of 2023, representing a decline of 9.50%[90]. - The revenue from the wastewater treatment business was HKD 46.44 million in the first half of 2024, an increase of HKD 3.04 million from HKD 43.40 million in the same period of 2023, representing a growth of 7.00%[93]. - The company reported a revenue of HKD 92.38 million and a gross profit of HKD 20.20 million for the water supply and sewage treatment construction services, accounting for 31.62% and 40.48% of total revenue and gross profit respectively[96]. Operational Highlights - The company has identified three reportable segments: Water Supply, Renewable Energy Sales, and Property Investment and Development[14]. - The company plans to continue focusing on expanding its renewable energy segment, particularly in biogas power generation and solid organic fertilizer sales[14]. - The company has five wastewater treatment projects located in Jiangxi, Guangdong, and Shandong provinces, maintaining a daily treatment capacity of 240,000 tons[92]. - The company has 50 solid waste treatment projects, with 36 operational and a total installed capacity of 109.63 MW, while 10 projects are under construction with an estimated capacity of 10.7 MW[97]. - The company is focusing on the development of organic waste recycling, comprehensive water treatment, overseas business expansion, landfill maintenance, and engineering services to enhance its professional capabilities in the environmental protection sector[151]. - The company has secured a 39-month service contract for food waste collection in West Kowloon, valued at approximately HKD 87 million, starting operations in March 2024[103]. Legal and Compliance Issues - The company has initiated legal actions to recover the outstanding loan balance of HKD 35,400,000, which remains unpaid despite multiple demands[38]. - The court has issued a winding-up order for the borrower, indicating potential recovery challenges for the company[39]. - The company has been involved in legal proceedings in China, with ongoing litigation as of the announcement date[41]. - The company has submitted a request for the recognition and enforcement of the Hong Kong arbitration award in Shenzhen and Huizhou courts[41]. - The company has not conducted any capital raising activities during the interim period[115]. - The company does not recommend the payment of an interim dividend for the six months ending June 30, 2024, maintaining the interim dividend at zero[125]. Strategic Initiatives - The company has made significant adjustments to its subsidiary structure, upgrading three tier-three subsidiaries to tier-two subsidiaries for better management and flexibility[128]. - The company has optimized cash flow by selling individual water assets, supporting the development of core businesses[129]. - The new biogas power generation segment has implemented strategies to optimize organizational structure and reduce operational costs significantly[130]. - The company is actively pursuing electricity price subsidies and aims to meet its annual revenue targets from these subsidies[132]. - The company has outlined future operational plans for projects in Shandong, with 100% ownership and expected start dates in October 2023[100]. Employee and Governance - As of June 30, 2024, the group had 739 employees, a decrease from 936 employees on June 30, 2023, with total employee benefits expenses amounting to HKD 85,310,000, down from HKD 96,240,000 in the first half of 2023[113]. - The company has adhered to the corporate governance code throughout the interim period, with a noted deviation regarding the separation of the roles of Chairman and CEO[120]. - The company currently has only two independent non-executive directors, which is below the minimum requirement of three as per listing rules[121].
中国水业集团(01129) - 2024 - 中期业绩