19 September 2017
The information contained within this
announcement is deemed by the Company to constitute inside
information as stipulated under the Market Abuse Regulations (EU)
No. 596/2014 ("MAR")
WALCOM GROUP LIMITED
(“Walcom” or “the Company”)
Half-yearly
results for the six months ended 30 June
2017
Walcom is pleased to announce its interim results for the six
months ended 30 June 2017. These
results are also available from the Company’s website at
www.walcomgroup.com.
Further enquiries:
Walcom
Group Limited
Francis Chi (Chief Executive Officer)
Albert Wong (Chief Financial Officer) |
+852 2494 0133 |
Allenby Capital Limited
Virginia Bull |
+44 20 3328 5656 |
CHAIRMAN’S
STATEMENT
On behalf of the board of directors (the “Board”), I am pleased
to present the Company’s half-yearly results for the six months
ended 30 June 2017.
Introduction
The PRC economy maintained steady growth during the first six
months of the year but the overall performance of the pig farming
industry did not improve during the same period due to a decreasing
pig farmgate price. The Company’s revenue decreased by 5 per cent.
compared with the same period last year. Due to the
continuing increase in production costs and operating expenses, the
Company incurred a loss per share for the period of HK$5.03 cents compared with a loss per share of
HK$2.46 cents in the same period last
year.
Results for the Period
The Company generated revenues of HK$19.6
million during the period (June
2016: HK$20.7 million) and
gross profits of HK$11.0 million
(June 2016: HK$11.7 million), representing a decrease of 5
per cent. and 6 per cent. respectively compared with the same
period last year. The gross profit margin remained
approximately the same as last year at 56.4 per cent. (June 2016: 56.5 per cent.) despite the escalating
production costs, particularly raw materials, labour and rental
expenses. Compared to 1 January
2017, as at 30 June 2017 the
Hong Kong currency fell by
approximately 3 per cent. against China’s Renminbi, which resulted
in an accounting exchange loss of HK$0.90
million (June 2016: gain of
HK$0.59 million) when translating the
inter-company balances among the Group companies. This was a
significant contributor to the Company’s net loss increasing by 99
per cent. to HK$3.36 million
(June 2016: HK$1.69 million) and the Company incurring a loss
of HK$2.92 million at the EBITDA
level, an increase of 159 per cent. over the same period last year
(June 2016: HK$1.12 million).
Review of Activities and Market
Compared to the same period last year, the average exchange rate
of Renminbi weakened against the Hong Kong Dollar by 4.8 per cent.
during the period under review. This, in combination with the
decrease in the quantity of sales in China, resulted in the sales turnover in the
PRC decreasing by 8 per cent. to HK$10.8
million compared with the same period last year
(June 2016: HK$11.8 million). Overseas sales remained
relatively stable, decreasing only slightly by 1 per cent. to
HK$8.7 million compared with same
period last year (June 2016:
HK$8.8 million).
The pig farmgate price in China
dropped during the first six months of 2017 and, accordingly, the
pig number has not increased to its previous level. As such, the
demand for feedstuff remained weak. The pig farming industry
forecast estimated that the pig numbers will remain depressed
during the second half of 2017 as the pig farmgate price is not
expected to rise due to increasing competition from pork imported
into China. This will affect the
animal feed market which in turn will likely have an adverse effect
on the operating results of the Company.
Earlier this year the Company strengthened its sales team by
appointing Mr. Paitoon
Buddhinunta-opas, the general manager of the Group’s
subsidiary in Thailand, as the
Company’s group sales director. The new sales team is focused
on increasing sales penetration into the Company’s existing larger
customers which have low usage of the Company’s products and also
those integrated meat producing companies whose businesses include
feed milling, pig farming, pig slaughtering and pork product
production. From the Company’s previous experience, these
integrated companies are more responsive to the gross margin impact
that the Company’s products can have, which increases the Company’s
chances of gaining sales traction. By putting this concept in
practice, the Board is delighted to report that the Company has
successfully sold its products into one of the largest integrated
meat producing companies in China
since July this year.
The Company’s overall overseas sales were maintained at about
the same level as last year.
Sales in Thailand in terms of
quantity and turnover both increased by 8 per cent. over the same
period last year (June 2017:
HK$7.9 million; June 2016: HK$7.3
million).
Due to poorer performance of the feed mills, the Korean market
weakened during the period under review and sales decreased by 50
per cent. to HK$0.8 million
(June 2016: HK$1.6 million).
Outlook
It is believed that the structural transformation of the Chinese
economy which resulted in a slower growth in the economy over the
past three years will continue for the foreseeable future.
However, with the promotion of the “internet plus” concept, the
Chinese economy has shown recovery in some sectors especially the
service industry. This will have a positive impact on the
consumer market, the advantage of which will in turn be passed on
to the Company’s sales in the PRC market. With the Company’s
new sales team, the Directors are confident that this will result
in improved sales in the second half of the year which will have
positive effect in the overall performance of the Company in the
year 2017.
Frankie Y. L. Wong
Chairman
19 September 2017
UNAUDITED CONSOLIDATED STATEMENT
OF PROFIT OR LOSS
FOR THE SIX MONTHS ENDED 30 JUNE
2017
|
Note |
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
|
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
|
Revenue |
3 |
|
19,560,955 |
|
20,693,043 |
|
46,469,041 |
|
|
|
|
|
|
|
|
Cost of sales |
|
|
(8,534,341) |
|
(8,994,822) |
|
(19,147,412) |
|
|
|
|
|
|
|
|
Gross profit |
|
|
11,026,614 |
|
11,698,221 |
|
27,321,629 |
|
|
|
|
|
|
|
|
Other income |
4 |
|
15,842 |
|
13,173 |
|
275,269 |
|
|
|
|
|
|
|
|
Research and development
expenses |
|
|
(328,530) |
|
(804,635) |
|
(1,565,262) |
|
|
|
|
|
|
|
|
Selling and distribution
expenses |
|
|
(5,435,032) |
|
(5,496,572) |
|
(11,346,594) |
|
|
|
|
|
|
|
|
General and administrative
expenses |
|
|
(8,474,239) |
|
(6,825,912) |
|
(11,874,526) |
|
|
|
|
|
|
|
|
(Loss) / profit from
operations |
5 |
|
(3,195,345) |
|
(1,415,725) |
|
2,810,516 |
|
|
|
|
|
|
|
|
Net finance expenses |
6 |
|
(56,290) |
|
(31,507) |
|
(70,342) |
|
|
|
|
|
|
|
|
(Loss) / profit
before income tax |
|
|
(3,251,635) |
|
(1,447,232) |
|
2,740,174 |
|
|
|
|
|
|
|
|
Income tax expense |
7 |
|
(112,609) |
|
(240,916) |
|
(1,316,475) |
|
|
|
|
|
|
|
|
(Loss) / profit
for the period / year |
|
|
(3,364,244) |
|
(1,688,148) |
|
1,423,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) / profit
attributable to: |
|
|
|
|
|
|
|
Owners of the Company |
|
|
(3,458,992) |
|
(1,690,571) |
|
1,263,286 |
Non-controlling interests |
|
|
94,748 |
|
2,423 |
|
160,413 |
|
|
|
|
|
|
|
|
(Loss) / profit
for the period / year |
|
|
(3,364,244) |
|
(1,688,148) |
|
1,423,699 |
|
|
|
|
|
|
|
|
(Loss) / profit per share – basic, HK cents |
8 |
|
(5.03) |
|
(2.46) |
|
1.84 |
– diluted, HK cents |
|
|
(5.03) |
|
(2.46) |
|
1.84 |
|
|
|
|
|
|
|
|
UNAUDITED CONSOLIDATED STATEMENT
OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE
INCOME
FOR THE SIX MONTHS ENDED 30 JUNE
2017
|
Note |
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
|
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
|
(Loss) / profit
for the period / year |
|
|
(3,364,244) |
|
(1,688,148) |
|
1,423,699 |
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
Exchange difference on translation
of |
|
|
|
|
|
|
|
financial statements of
overseas subsidiaries |
|
|
1,571,508 |
|
(669,340) |
|
(2,603,259) |
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
|
|
|
|
|
|
for the period /
year |
|
|
(1,792,736) |
|
(2,357,488) |
|
(1,179,560) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
|
|
|
|
|
|
attributable
to: |
|
|
|
|
|
|
|
Owners of the Company |
|
|
(2,027,469) |
|
(2,419,944) |
|
(1,356,994) |
Non-controlling interests |
|
|
234,733 |
|
62,456 |
|
(177,434) |
|
|
|
|
|
|
|
|
Total comprehensive loss |
|
|
|
|
|
|
|
for the
period / year |
|
|
(1,792,736) |
|
(2,357,488) |
|
(1,179,560) |
UNAUDITED CONSOLIDATED BALANCE
SHEET
AT 30 JUNE 2017
|
Note |
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
|
|
HK$ |
|
HK$ |
|
HK$ |
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS |
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
5,821,135 |
|
1,383,334 |
|
4,832,774 |
Patents |
|
|
1,681,327 |
|
1,946,865 |
|
1,814,096 |
Goodwill |
|
|
- |
|
- |
|
- |
|
|
|
7,502,462 |
|
3,330,199 |
|
6,646,870 |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
Inventories |
|
|
2,890,996 |
|
1,759,975 |
|
1,380,728 |
Trade and other receivables |
10 |
|
9,279,392 |
|
7,475,382 |
|
9,028,156 |
Cash and cash
equivalents
Restricted cash |
11
11 |
|
4,397,076
111,768 |
|
11,428,764
106,794 |
|
9,012,203
105,210 |
|
|
|
16,679,232 |
|
20,770,915 |
|
19,526,297 |
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
|
24,181,694 |
|
24,101,114 |
|
26,173,167 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
Share capital |
12 |
|
688,344 |
|
688,344 |
|
688,344 |
Reserves |
|
|
13,155,690 |
|
14,120,209 |
|
15,183,159 |
TOTAL EQUITY
ATTRIBUTABLE TO
OWNERS OF THE COMPANY |
|
|
13,844,034 |
|
14,808,553 |
|
15,871,503 |
Non-controlling interests |
|
|
2,498,762 |
|
2,149,051 |
|
2,264,029 |
TOTAL EQUITY |
|
|
16,342,796 |
|
16,957,604 |
|
18,135,532 |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
Trade and other payables |
13 |
|
5,133,569 |
|
4,561,715 |
|
4,744,113 |
Tax payables |
|
|
400,916 |
|
241,793 |
|
1,057,636 |
Bank borrowings |
14 |
|
2,304,413 |
|
2,340,002 |
|
2,235,886 |
|
|
|
7,838,898 |
|
7,143,510 |
|
8,037,635 |
TOTAL LIABILITIES |
|
|
7,838,898 |
|
7,143,510 |
|
8,037,635 |
|
|
|
|
|
|
|
|
TOTAL EQUITY AND
LIABILITIES |
|
|
24,181,694 |
|
24,101,114 |
|
26,173,167 |
|
|
|
|
|
|
|
|
NET CURRENT ASSETS |
|
|
8,840,334 |
|
13,627,405 |
|
11,488,662 |
|
|
|
|
|
|
|
|
TOTAL ASSETS
LESS CURRENT LIABILITIES |
|
|
16,342,796 |
|
16,957,604 |
|
18,135,532 |
UNAUDITED CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30
JUNE 2017
|
|
|
|
|
|
|
Share-based |
|
|
|
|
|
|
|
|
|
Non- |
|
|
|
Share |
|
Share |
|
Merger |
|
compensation |
|
Exchange |
|
Surplus |
|
Accumulated |
|
|
|
controlling |
|
Total |
|
capital |
|
premium |
|
reserve |
|
reserve |
|
reserve |
|
reserve |
|
losses |
|
Total |
|
interests |
|
equity |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January
2016 |
688,344 |
|
95,298,644 |
|
23,852,469 |
|
1,568,769 |
|
225,525 |
|
3,263,694 |
|
(107,668,948) |
|
17,228,497 |
|
2,086,595 |
|
19,315,092 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(1,690,571) |
|
(1,690,571) |
|
2,423 |
|
(1,688,148) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange difference on translation
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial statements of overseas
subsidiaries |
- |
|
- |
|
- |
|
- |
|
(729,373) |
|
- |
|
- |
|
(729,373) |
|
60,033 |
|
(669,340) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss for the period |
- |
|
- |
|
- |
|
- |
|
(729,373) |
|
- |
|
(1,690,571) |
|
(2,419,944) |
|
62,456 |
|
(2,357,488) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapse of share option |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2016 |
688,344 |
|
95,298,644 |
|
23,852,469 |
|
1,568,769 |
|
(503,848) |
|
3,263,694 |
|
(109,359,519) |
|
14,808,553 |
|
2,149,051 |
|
16,957,604 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 1 January
2017 |
688,344 |
|
95,298,644 |
|
23,852,469 |
|
1,568,769 |
|
(2,394,755) |
|
3,602,327 |
|
(106,744,295) |
|
15,871,503 |
|
2,264,029 |
|
18,135,532 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive loss |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the period |
- |
|
- |
|
- |
|
- |
|
- |
|
- |
|
(3,458,992) |
|
(3,458,992) |
|
94,748 |
|
(3,364,244) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchange difference on translation
of |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial statements of overseas
subsidiaries |
- |
|
- |
|
- |
|
- |
|
1,431,523 |
|
- |
|
- |
|
1,431,523 |
|
139,985 |
|
1,571,508 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
loss for the period |
- |
|
- |
|
- |
|
- |
|
1,431,523 |
|
- |
|
(3,458,992) |
|
(2,027,469) |
|
234,733 |
|
(1,792,736) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lapse of share options |
- |
|
- |
|
- |
|
(684,771) |
|
- |
|
- |
|
684,771 |
|
- |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At 30 June 2017 |
688,344 |
|
95,298,644 |
|
23,852,469 |
|
883,998 |
|
(963,232) |
|
3,602,327 |
|
(109,518,516) |
|
13,844,034 |
|
2,498,762 |
|
16,342,796 |
UNAUDITED CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE SIX MONTHS ENDED
30 JUNE 2017
|
Note |
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
|
|
HK$ |
|
HK$ |
|
HK$ |
Cash flow from operating
activities |
|
|
|
|
|
|
|
(Loss) / profit before income
tax |
|
|
(3,251,635) |
|
(1,447,232) |
|
2,740,174 |
Amortisation of patents |
|
|
132,769 |
|
132,769 |
|
265,538 |
Depreciation |
|
|
144,293 |
|
151,229 |
|
288,704 |
Foreign exchange loss / (gain),
net |
|
|
968,688 |
|
(685,765) |
|
(2,083,712) |
Interest received |
|
|
(8,861) |
|
(36,618) |
|
(63,460) |
Interest paid |
|
|
65,151 |
|
68,125 |
|
133,802 |
(Gain) / loss on disposal of
property, plant and equipment |
|
|
(23) |
|
3,419 |
|
11,317 |
|
|
|
|
|
|
|
|
Operating (loss)/
profit before |
|
|
|
|
|
|
|
working capital
changes |
|
|
(1,949,618) |
|
(1,814,073) |
|
1,292,363 |
(Increase) / decrease in
inventories |
|
|
(1,510,268) |
|
487,909 |
|
867,156 |
(Increase) / decrease in trade
and other receivables |
|
|
(251,236) |
|
328,909 |
|
(1,209,281) |
Increase / (decrease) in trade
and other payables |
|
|
389,456 |
|
(393,204) |
|
(210,806) |
|
|
|
|
|
|
|
|
Net cash (used in) / generated
from operations |
|
|
(3,321,666) |
|
(1,390,459) |
|
658,432 |
Corporate income tax paid |
|
|
(769,329) |
|
(768,579) |
|
(961,878) |
Interest paid |
|
|
(65,151) |
|
(68,125) |
|
(133,802) |
Net cash used in operating activities |
|
|
(4,156,146) |
|
(2,227,163) |
|
(437,248) |
|
|
|
|
|
|
|
|
Cash flow from investing
activities |
|
|
|
|
|
|
|
Purchase of property, plant and
equipment |
|
|
(816,090) |
|
(9,768) |
|
(3,649,857) |
Proceeds from disposal of fixed
assets |
|
|
23 |
|
- |
|
- |
Interest received |
|
|
8,861 |
|
36,618 |
|
63,460 |
Net cash (used in)/
generated from investing activities |
|
|
(807,206) |
|
26,850 |
|
(3,586,397) |
|
|
|
|
|
|
|
|
Cash flow from financing
activities |
|
|
|
|
|
|
|
Repayment of bank
borrowings |
|
|
- |
|
- |
|
(2,387,205) |
Proceeds from new
bank borrowings |
|
|
- |
|
- |
|
2,235,886 |
Increase in
restricted bank balance |
|
|
(4,974) |
|
(2,981) |
|
(1,397) |
Net cash used in financing
activities |
|
|
(4,974) |
|
(2,981) |
|
(152,716) |
|
|
|
|
|
|
|
|
Net decrease in cash and cash
equivalents |
|
|
(4,968,326) |
|
(2,203,294) |
|
(4,176,361) |
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the beginning of the period / year |
|
|
9,012,203 |
|
13,670,351 |
|
13,670,351 |
|
|
|
|
|
|
|
|
Exchange
profit/(loss) on cash and cash equivalents |
|
|
353,199 |
|
(38,293) |
|
(481,787) |
|
|
|
|
|
|
|
|
Cash and cash
equivalents at the end of the period / year |
11 |
|
4,397,076 |
|
11,428,764 |
|
9,012,203 |
NOTES TO THE UNAUDITED
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2017
(1) BASIS OF
PREPARATION AND SIGNIFICANT ACCOUNTING POLICIES
The unaudited consolidated financial statements have been
prepared using accounting policies consistent with International
Financial Reporting Standards and in accordance with International
Accounting Standard (IAS) 34 Interim Financial Reporting.
The unaudited consolidated financial statements have been
prepared under the historical cost convention. The same accounting
policies, presentation and methods of computation are followed in
these unaudited consolidated financial statements as were applied
in the preparation of the group’s financial statements for the year
ended 31 December 2016.
(2) SEGMENT
REPORTING
(a) Primary
reporting format - Geographical Segment
The group’s operations are mainly located in Hong Kong, PRC, Thailand. The group’s sales revenue by
geographical location of customers are analysed as follows:
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
PRC |
10,821,546 |
|
11,824,924 |
|
26,447,044 |
Thailand |
7,894,388 |
|
7,289,399 |
|
16,643,536 |
Others |
845,021 |
|
1,578,720 |
|
3,378,461 |
|
19,560,955 |
|
20,693,043 |
|
46,469,041 |
(b) Secondary
reporting format - Business Segment
The Group is principally engaged in the manufacture,
distribution and sale of chemical feed and additive products. All
of the group’s products are of a similar nature and subject to
similar risk and returns. Accordingly, the group’s activities are
attributable to a single business segment and no business segment
analysis is presented.
(c)
Segment assets by geographical location of assets
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
PRC |
13,854,608 |
|
14,446,142 |
|
14,882,387 |
Thailand |
8,039,316 |
|
3,454,609 |
|
8,287,443 |
Hong Kong |
606,442 |
|
4,253,498 |
|
1,499,263 |
Others |
1,681,328 |
|
1,946,865 |
|
1,504,074 |
|
24,181,694 |
|
24,101,114 |
|
26,173,167 |
(3)
REVENUE
Revenue represents the sales value of goods supplied to the
customers less returns, discounts, value added tax and sales
taxes.
(4) OTHER
INCOME
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
Government subsidy |
- |
|
- |
|
248,841 |
Gain on disposal of property, plant
and |
|
|
|
|
|
equipment |
23 |
|
- |
|
- |
Sundry income |
15,819 |
|
13,173 |
|
26,428 |
|
15,842 |
|
13,173 |
|
275,269 |
(5) OPERATING
(LOSS) / PROFIT
Operating (loss) / profit is stated after charging the following
items:-
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
Amortisation of patents |
132,769 |
|
132,769 |
|
265,538 |
Auditor’s remuneration |
182,040 |
|
180,879 |
|
312,226 |
Cost of inventories |
8,139,119 |
|
8,426,009 |
|
17,675,779 |
Depreciation |
96,012 |
|
107,795 |
|
210,131 |
Loss on disposal of property, plant
and equipment |
- |
|
3,419 |
|
11,317 |
Rental charges under
operating leases
in respect of land and buildings |
410,733 |
|
442,955 |
|
878,599 |
Staff costs
(including directors’ emoluments) |
|
|
|
|
|
- wages and salaries |
5,549,091 |
|
5,664,518 |
|
10,275,948 |
- contributions to retirement
benefits |
419,466 |
|
425,378 |
|
839,484 |
- other staff benefits |
1,527,712 |
|
1,684,273 |
|
3,545,683 |
(6) NET FINANCE (EXPENSES)/
INCOME
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
Bank interest income |
8,861 |
|
36,618 |
|
63,460 |
Interest expense on bank loans |
(65,151) |
|
(68,125) |
|
(133,802) |
|
(56,290) |
|
(31,507) |
|
(70,342) |
(7) INCOME TAX
EXPENSE
No provision for Hong Kong Profits Tax has been made
(June 2016: HK$nil; 2016: HK$nil) as
the group’s assessable profit subject to Hong Kong profits tax for the period is fully
set-off by tax loss brought forward from last year.
Taxation on overseas profits has been calculated on the
estimated assessable profit for the period/year at the rate of
taxation prevailing in the countries in which the group companies
operate. The overseas income tax provided for the six months ended
30 June 2017 is HK$112,609 (June
2016: HK$240,916; 2016:
HK$1,316,475).
(8) LOSS PER
SHARE
The calculation of the basic loss per share for the six months
ended 30 June 2017, is based on the
loss attributable to ordinary equity shareholders of the company of
HK$3,458,992 (June 2016: HK$1,690,571; 2016: Profit HK$1,263,286) during the period and the weighted
average number of 68,834,388 ordinary shares (June 2016: 68,834,388; 2016: 68,834,388) in issue
during the period/year. No diluted loss per share is to be reported
for the period/year.
(9)
DIVIDENDS
No payment of dividend was recommended for the first six months
of 2017 (June 2016: HK$ nil; 2016:
HK$nil).
(10) TRADE AND OTHER
RECEIVABLES
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
Trade receivables |
8,275,752 |
|
6,880,895 |
|
8,019,256 |
Less: provision for impairment
loss |
(508,758) |
|
(508,758) |
|
(508,758) |
|
7,766,994 |
|
6,372,137 |
|
7,510,498 |
Other receivables |
524,206 |
|
229,745 |
|
280,487 |
Prepayments and deposits |
988,192 |
|
873,500 |
|
1,237,171 |
|
9,279,392 |
|
7,475,382 |
|
9,028,156 |
(a) All
trade and other receivables, are expected to be recovered within
one year.
(b)
Impairment of trade receivables
The movement in the provision of impairment for doubtful debts
during the period/year, including both specific and collective loss
components, is as follows:
|
Unaudited
six months ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
At 1 January |
508,758 |
|
508,758 |
|
508,758 |
Written off |
- |
|
- |
|
- |
Exchange difference |
- |
|
- |
|
- |
At 30 June/31 December |
508,758 |
|
508,758 |
|
508,758 |
At 30 June 2017, the Group’s trade
receivables of HK$508,758
(June 2016: HK$508,758, 2016: HK$508,758) have been outstanding for a certain
period of time. The management assessed that only a portion of the
receivables is expected to be recoverable. Consequently,
specific allowance for doubtful debts was recognised for the
individually impaired receivables.
The Group does not hold any collateral over these balances.
(11) CASH AND CASH
EQUIVALENTS
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
Cash at bank and on hand |
4,508,844 |
|
11,535,558 |
|
9,117,413 |
Less: Cash at bank - restricted |
(111,768) |
|
(106,794) |
|
(105,210) |
Cash and cash
equivalents
in the cash flow statement |
4,397,076 |
|
11,428,764 |
|
9,012,203 |
|
|
|
|
|
|
|
|
|
|
|
(12) SHARE CAPITAL
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
Authorised |
|
|
|
|
|
150,000,000 (June 2016: 150,000,000 and Dec 2016: 150,000,000)
ordinary shares of HK$0.01 each |
1,500,000 |
|
1,500,000 |
|
1,500,000 |
|
|
|
|
|
|
Issued and fully paid |
|
|
|
|
|
68,834,388 (June 2016: 68,834,388
and
Dec 2016: 68,834,388) ordinary
shares of HK$0.01 each |
688,344 |
|
688,344 |
|
688,344 |
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company. All ordinary shares rank
equally with regard to the Company’s residual assets.
(13) TRADE AND OTHER
PAYABLES
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
Trade payables |
1,478,806 |
|
1,416,707 |
|
1,318,966 |
Other payables and accrued
expenses |
3,654,763 |
|
3,145,008 |
|
3,425,147 |
|
5,133,569 |
|
4,561,715 |
|
4,744,113 |
All of the trade and other payables are expected to be settled
within one year.
(14) BANK BORROWINGS
|
|
Unaudited
30 June 2017 |
|
Unaudited
30 June 2016 |
|
Audited
31 December 2016 |
|
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
Current |
|
|
|
|
|
|
Bank borrowings, unsecured |
(a) |
2,304,413 |
|
2,340,002 |
|
2,235,886 |
|
|
|
|
|
|
|
- The effective interest rate per annum for bank borrowings at
balance sheet date is at 5.7% (June
2016: 7.8%, 2016: 5.7%) per annum.
(15) RECONCILIATION OF (LOSS)
/ PROFIT BEFORE INCOME TAX TO EBITDA
|
Unaudited
six months
ended
30 June 2017 |
|
Unaudited
six months
ended
30 June 2016 |
|
Audited
year ended
31 December 2016 |
|
HK$ |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
(Loss) / profit before income
tax |
(3,251,635) |
|
(1,447,232) |
|
2,740,174 |
Depreciation |
144,293 |
|
151,229 |
|
288,704 |
Amortisation of patents |
132,769 |
|
132,769 |
|
265,538 |
Interest income |
(8,861) |
|
(36,618) |
|
(63,460) |
Interest expenses |
65,151 |
|
68,125 |
|
133,802 |
(Gain) / loss on
disposal of property, plant and equipment |
(23) |
|
3,419 |
|
11,317 |
EBITDA |
(2,918,306) |
|
(1,128,308) |
|
3,376,075 |
EBITDA is defined herein as earnings before depreciation,
amortization, interest and tax, plus specific charges which are
considered non-recurring in nature. Specific charges include
impairment loss in value and gain/loss in disposal of non-current
assets, and amortization of fair value of share-based compensation.
EBITDA is not a recognised term under generally accepted accounting
principles and does not purport to be an alternative to net income
as a measure of operating performance or to cash flows from
operating activities as a measure of liquidity. Because not all
companies use identical calculations, this presentation may not be
comparable to other similarly titled measures of other
companies.
(16) COPIES OF
THE HALF YEARLY REPORT
Copies of the half-yearly report will be available shortly from
the Company’s website www.walcomgroup.com .