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Unaudited Quarterly Results Announcement For The Three Months Ended 31 March 2018
This announcement is made on a voluntary basis by Guangnan (Holdings) Limited (the "Company") for the purpose of further increasing the level of corporate governance and enhancing its transparency.
Financial highlights
Three months ended 31 March
2018 (Unaudited)
2017 (Unaudited)
HK$'000
HK$'000
Change
Revenue
652,825
550,555 18.6%
Profit from operations
4,718
3,990 18.2%
Profit attributable to shareholders
14,317
27,171 -47.3%
At 31 March 2018 (Unaudited)
At
31 December
2017 (Audited)
HK$'000
HK$'000
Change
Total assets
3,140,611
3,003,711 4.6%
Shareholders' equity
2,536,055
2,452,849 3.4%
Note:
The financial information relating to the year ended 31 December 2017 included in this announcement as comparative information does not constitute the statutory annual consolidated financial statements of the Company for that year but is derived from those financial statements. Further information relating to these statutory financial statements required to be disclosed in accordance with section 436 of the Hong Kong Companies Ordinance is as follows:
The Company will deliver the financial statements for the year ended 31 December 2017 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Hong Kong Companies Ordinance in due course. The Company's auditor has reported on those financial statements. The auditor's report was unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its report; and did not contain a statement under sections 406(2), 407(2) or (3) of the Hong Kong Companies Ordinance.
SUMMARISED INFORMATION
Results
In the first quarter of 2018, the unaudited consolidated revenue of the Company and its subsidiaries (collectively the "Group") was HK$652,825,000, representing an increase of 18.6% as compared to that for the corresponding period last year. The unaudited consolidated profit attributable to shareholders was HK$14,317,000, representing a decrease of 47.3% as compared to that for the corresponding period last year. It is the Group's plan to consider dividends declaration at the half-year and year ends. Therefore, no dividend is proposed for the first quarter of 2018 (the first quarter of 2017: HK$Nil).
Tinplating business
In the first quarter of 2018, the Group produced 77,152 tonnes of tinplate products, representing an increase of 9.5% as compared to that for the corresponding period last year, and sold 74,955 tonnes of tinplate products, representing an increase of 13.5% as compared to that for the corresponding period last year.
The revenue for the current period was HK$546,351,000, representing an increase of 20.3% as compared to that for the corresponding period last year. The segment loss was HK$16,362,000, representing a decrease of HK$1,279,000 from the segment loss of HK$17,641,000 for the corresponding period last year. With the impact of slow recovery of the global economy and the slowing down of growth of the Chinese economy, the overall imbalance between supply and demand in the iron and steel industry still existed. The excess capacity in the tinplating industry and weak demand of downstream business have still been placing pressure on the sales of tinplate products. Notwithstanding the selling price and sales volume of tinplate products of the Group increased during the period, resulting in an increase in gross profit for the current period as compared to that for the corresponding period last year, the tinplating business still generated a significant segment loss.
Fresh and Live Foodstuffs business
In the first quarter of 2018, the revenue of the fresh and live foodstuffs business amounted to HK$100,984,000, representing an increase of 10.2% as compared to that for the corresponding period last year. Together with the share of losses of the two associates of HK$2,005,000 (the first quarter of 2017: share of profits of HK$4,371,000), the segment profit was HK$15,004,000, representing a decrease of 41.4% as compared to that for the corresponding period last year. The significant drop in the price of live pigs during the current period led to the decrease in profit of live pigs' distribution business and losses incurred by the two associates which are engaged in pig farming and sales of pigs. The Group's overall market share in the live pigs supply into Hong Kong was about 46%. This provided a certain contribution to the earnings of the Group.
Other information
In respect of our property leasing business, valuation gains on investment properties of HK$9,289,000 (the first quarter of 2017: HK$5,190,000) was recorded for the first quarter of 2018.
In the first quarter of 2018, Yellow Dragon Food Industry Co., Ltd., an associate of the Group engaged in the processing and sale of corn food and feed products, recorded a loss as a result of the increase in the cost of raw materials and the decrease in government grants income. The Group's share of loss from this associate was HK$6,286,000 (the first quarter of 2017: share of profit of HK$11,719,000).
CAUTION STATEMENT
The Group's tinplating business are affected by demands from customers and fluctuations of raw material prices, which is expected to continue. Although the Company is now issuing quarterly information, investors should be aware that due to fluctuations in market conditions, raw material prices, exchange rates of Renminbi against other currencies and changes in the operating environment from time to time, certain income and expenses may vary substantially from quarter to quarter. Hence, comparisons between different periods within a single financial year, or between different periods in different financial years, are not necessarily meaningful and cannot be relied upon as indicators of the Group's performance due to the seasonality factors. Also, quarterly results should not be used to estimate or extrapolate to project the Group's half-year or full-year performance.
In addition, the board of directors (the "Board") of the Company would like to remind investors that the information contained in this announcement is only based on internal records and management accounts of the Group and such financial information was not reviewed nor audited by the auditor of the Company. Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.
By Order of the Board
Tan Yunbiao
Chairman
Hong Kong, 25 April 2018
As at the date of this announcement, the Board is composed of three Executive Directors, namely Messrs. Tan Yunbiao, He Jinzhou and Lau Kin Man; one Non-Executive Director, namely Ms. Liang Jianqin; and three Independent Non-Executive Directors, namely Mr. Gerard Joseph McMahon, Mr. Li Kar Keung, Caspar and Dr. Wong Yau Kar, David.