BoardWare Intelligence Technology (1204) H1 2024 earnings summary

Executive summary

• FP2024 revenue fell 19.3% YoY to HK$318.1m as revenue from large Professional IT services projects completed in 2023 declined; gross profit rose 28.5% to HK$65.8m.

• Profit for the period was HK$1.0m, down 16.7% YoY; basic EPS fell to HK0.21 cents from HK0.25 cents.

• Management expects gaming-operator contracts and expanded Managed services and maintenance work to support revenue in H2 2024.

Financial highlights

• Revenue decreased 19.3% YoY to HK$318.1m; cost of sales and services fell 26.4% to HK$252.3m.

• Gross profit increased 28.5% to HK$65.8m; profit before tax declined 37.0% to HK$1.7m.

• Profit for the period declined 16.7% to HK$1.0m; income tax expense fell 53.3% to HK$0.7m.

• Other income increased to HK$5.8m from HK$2.5m, mainly reflecting higher government grants related to R&D.

Outlook and guidance

• High-complexity gaming-operator contracts were in early preparation with no significant FP2024 revenue; work was expected to progress in H2 2024 and compensate for lower sales.

• Additional Managed services and IT maintenance and consultancy contracts in Macau and Hong Kong are expected to help offset weaker Professional IT services revenue in H2 2024.

• Digital transformation, Macau diversification initiatives, smart-city and IoT development, and Greater Bay Area opportunities are expected to support demand for IT solutions.

• Continued BCI and AI R&D is planned, with financing sources to be sought for short- and long-term funding needs.