Announcement of Interim Results for the Six Months Ended 30 June 2020
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Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Stock Code: 0832) ANNOUNCEMENT OF INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2020 FINANCIAL HIGHLIGHTS • Revenue for the six months ended 30 June 2020 amounted to RMB13,019 million, an increase of 43.6% compared with the corresponding period in 2019. • Gross profit margin for the period was 23.7%, a decrease of 3.6 percentage points compared with 27.3% for the corresponding period in 2019. • Profit attributable to equity shareholders of the Company for the period amounted to RMB727 million, an increase of 10.5% compared with the corresponding period in 2019. • Net profit margin for the period was 6.0%, a decrease of 2.5 percentage points compared with 8.5% for the corresponding period in 2019. • Basic earnings per share for the period was RMB26.43 cents, an increase of 9.8% compared with the corresponding period in 2019. • An interim dividend of HK11.0 cents per share for the six months ended 30 June 2020. 1 INTERIM RESULTS The board (the “Board”) of directors (the “Directors” and each a “Director”) of Central China Real Estate Limited (the “Company”) hereby announces the unaudited consolidated results of the Company and its subsidiaries (collectively, the “Group”) for the six months ended 30 June 2020, together with the relevant comparative figures in 2019 as follows: CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2020 – unaudited (Expressed in Renminbi) Six months ended 30 June 2020 2019 Note RMB’000 RMB’000 Revenue 3 13,018,858 9,068,042 Cost of sales 5 (9,930,084) (6,593,702) Gross profit 3,088,774 2,474,340 Other revenue 4 170,131 124,672 Other net income 4 522,151 597,388 Selling and marketing expenses (907,309) (751,395) General and administrative expenses (822,815) (771,813) Impairment losses on trade and other receivables, including contract assets 5 (95,498) (61,419) 1,955,434 1,611,773 Finance costs 5 (369,524) (230,098) Share of profits less losses of associates (2,557) (3,897) Share of profits less losses of joint ventures (41,259) 164,617 Profit before change in fair value of investment property and income tax 1,542,094 1,542,395 Net valuation (losses)/gains on investment property (84,789) 20,420 Profit before taxation 5 1,457,305 1,562,815 Income tax 6 (671,148) (794,526) Profit for the period 786,157 768,289 2 CONSOLIDATED INCOME STATEMENT for the six months ended 30 June 2020 – unaudited (Continued) (Expressed in Renminbi) Six months ended 30 June 2020 2019 Note RMB’000 RMB’000 Attributable to: Equity shareholders of the Company 726,982 657,720 Non-controlling interests 59,175 110,569 Profit for the period 786,157 768,289 Earnings per share 7 – Basic (RMB cents) 26.43 24.08 – Diluted (RMB cents) 25.93 23.64 3 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME for the six months ended 30 June 2020 – unaudited (Expressed in Renminbi) Six months ended 30 June 2020 2019 RMB’000 RMB’000 Profit for the period 786,157 768,289 Other comprehensive income for the period (after tax and reclassification adjustments) Items that will not be reclassified to profit or loss: Equity investments at fair value through other comprehensive income – net movement in fair value reserve (non-recycling) 456 (27,640) Items that may be reclassified subsequently to profit or loss: Exchange differences on: – translation of financial statements to the presentation currency (120,184) 105,855 – arising on a monetary item that forms part of net investment in foreign operations (99,355) (8,070) Cash flow hedge: – effective portion of changes in fair value – 5,937 Other comprehensive income for the period (219,083) 76,082 Total comprehensive income for the period 567,074 844,371 Attributable to: Equity shareholders of the Company 510,927 732,564 Non-controlling interests 56,147 111,807 Total comprehensive income for the period 567,074 844,371 4 CONSOLIDATED STATEMENT OF FINANCIAL POSITION at 30 June 2020 – unaudited (Expressed in Renminbi) At At 30 June 31 December 2020 2019 Note RMB’000 RMB’000 Non-current assets Property, plant and equipment 7,466,584 5,343,435 Investment property 3,151,630 3,212,830 Goodwill 1,045,660 – Biological assets 215,698 245,349 Interests in associates 8 306,844 310,518 Interests in joint ventures 9 4,382,653 9,533,912 Other financial assets 726,544 1,425,571 Deferred tax assets 579,118 412,877 17,874,731 20,484,492 Current assets Trading securities 66,360 70,596 Biological assets 42,904 42,643 Inventories and other contract costs 10 88,701,381 69,992,554 Contract assets 171,909 214,828 Trade and other receivables 11 5,342,931 4,435,453 Deposits and prepayments 12 16,304,181 15,146,290 Tax recoverable 3,891,314 2,795,431 Restricted bank deposits 6,215,084 8,077,443 Cash and cash equivalents 25,554,776 22,707,659 146,290,840 123,482,897 Current liabilities Bank loans 13 (4,234,394) (3,734,424) Other loans 14 (2,333,674) (2,437,022) Trade and other payables 15 (42,372,587) (43,615,817) Contract liabilities (68,520,768) (52,954,902) Corporate bonds 17 (2,999,126) (1,489,608) Senior notes 16 (9,855,142) (4,857,923) Lease liabilities (46,006) (54,268) Taxation payable (1,288,775) (1,153,501) (131,650,472) (110,297,465) Net current assets 14,640,368 13,185,432 Total assets less current liabilities 32,515,099 33,669,924 5 CONSOLIDATED STATEMENT OF FINANCIAL POSITION at 30 June 2020 – unaudited (Continued) (Expressed in Renminbi) At At 30 June 31 December 2020 2019 Note RMB’000 RMB’000 Non-current liabilities Bank loans 13 (2,866,375) (3,504,035) Other loans 14 (1,381,075) (850,325) Corporate bonds 17 – (1,499,870) Senior notes 16 (12,651,137) (13,117,418) Lease liabilities (523,493) (481,508) Deferred tax liabilities (2,005,131) (1,614,447) (19,427,211) (21,067,603) NET ASSETS 13,087,888 12,602,321 CAPITAL AND RESERVES Share capital 244,306 240,662 Reserves 9,354,945 9,477,363 Total equity attributable to equity shareholders of the Company 9,599,251 9,718,025 Non-controlling interests 3,488,637 2,884,296 TOTAL EQUITY 13,087,888 12,602,321 6 NOTES: Central China Real Estate Limited (“the Company”) is a limited liability company incorporated in the Cayman Islands on 15 November 2007. Its principal place of business is at Room 7701B-7702A, 77th Floor, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong and its registered office is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands. This interim financial report as at and for the six months ended 30 June 2020 comprise the Company and its subsidiaries (together referred to as “the Group”) and the Group’s interests in associates and joint ventures. The principal activity of the Company is investment holding and the Group are principally engaged in property development, property leasing, hotel operations and provision of project management service in Henan Province in the People’s Republic of China (“the PRC”). 1 BASIS OF PREPARATION This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, including compliance with Hong Kong Accounting Standard (HKAS) 34, Interim financial reporting, issued by the Hong Kong Institute of Certified Public Accountants (HKICPA). It was authorised for issue on 25 August 2020. The interim financial report has been prepared in accordance with the same accounting policies adopted in the 2019 annual financial statements, except for the accounting policy changes that are expected to be reflected in the 2020 annual financial statements. Details of any changes in accounting policies are set out in note 2. The preparation of an interim financial report in conformity with HKAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates. This interim financial report contains condensed consolidated financial statements and selected explanatory notes. The notes include an explanation of events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the 2019 annual financial statements. The condensed consolidated interim financial statements and notes thereon do not include all of the information required for a full set of financial statements prepared in accordance with HKFRSs. The interim financial report is unaudited, but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, Review of interim financial information performed by the independent auditor of the entity, issued by the HKICPA. 7 2 CHANGES IN ACCOUNTING POLICIES The HKICPA has issued several amendments to HKFRSs that are first effective for the current accounting period of the Group. None of these developments have had a material effect on how the Group’s results and financial position for the current or prior periods have been prepared or presented in this interim financial report.