Realord Group (1196) H1 2024 earnings summary

Executive summary

• Revenue for 1H2024 was HK$349.6 million, down 10.9% year-over-year, mainly due to declines in Environmental Protection, Motor Vehicle Parts, Commercial Printing, and Department Store segments, partially offset by growth in Property and LAC segments.

• Net loss for 1H2024 was HK$551.0 million, compared to a net profit of HK$26.0 million in 1H2023, driven by a significant loss on fair value changes of investment properties and increased impairment losses.

• No interim dividend was declared for the period.

Financial highlights

• Gross profit decreased to HK$135.9 million from HK$155.1 million year-over-year.

• Other income was HK$16.3 million, mainly from imputed interest income on a gift receivable and interest on credit-impaired loans.

• Net foreign exchange gain was HK$77.9 million.

• Finance costs decreased to HK$377.5 million from HK$390.6 million, mainly due to lower interest on RMB borrowings.

• Loss on fair value changes of investment properties was HK$211.7 million, compared to a gain of HK$434.3 million in 1H2023.

Outlook and guidance

• The Group expects continued challenges in the property and retail sectors, with a focus on cost control and cautious expansion.

• Property segment to focus on five ongoing projects in Shenzhen, with continued development and leasing activities.

• Financial Services Segment anticipates stable growth as market conditions improve and plans new investment products.

• LAC Segment aims to leverage the Grenada Project for further expansion in the Caribbean and Latin America.

• EP and MVP segments to exercise cost control and risk management amid market uncertainties.