Theme International (990) H1 2024 earnings summary

Executive summary

• Revenue increased by 14% year-over-year to HK$26.58 billion for the six months ended 30 June 2024, driven by higher trading volumes in silver, gold ingots, and other commodities, offsetting a decline in iron ore trading volume.

• Net profit attributable to owners dropped to HK$294.4 million (previous year: HK$830 million/872.5 million), mainly due to lower profit margins, absence of prior year fair value gains, and a HK$167.7 million provision for suspected fund misappropriation in a Singapore subsidiary.

• Gross profit remained stable at HK$625.1 million.

• Basic earnings per share fell to HK2.19 cents from HK6.16 cents.

Financial highlights

• Distribution, trading, and processing revenue rose to HK$26.16 billion (2023: HK$23.09 billion), with financial services revenue up to HK$425.4 million (2023: HK$307.1 million).

• Other losses of HK$146.7 million were recorded, including a HK$167.7 million provision for suspected misappropriation of funds and a HK$5.4 million loss on fair value changes of financial assets.

• Share of profits from associates increased to HK$64.8 million (2023: HK$24 million).

• Finance costs were HK$14.6 million (2023: HK$15.2 million).

• Income tax expense decreased to HK$32.9 million (2023: HK$56.7 million).

Outlook and guidance

• Focus remains on expanding both the financial services and distribution, trading, and processing businesses.

• The company will continue to seek acquisition opportunities, particularly in chemical trading and related sectors.

• No interim dividend is recommended or declared for the period.

• A joint venture with Shandong Energy was announced post-period, with a registered capital of HK$800 million (49% owned by the company).