Shougang Concord Century : INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019 (in PDF)

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.

(Incorporated in Hong Kong with limited liability)

(Stock Code: 103)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

HIGHLIGHTS
	For the six months ended 30 June
	2019	2018
	(Unaudited)	(Unaudited)	%
	HK$'000	HK$'000	Change
Operations
Revenue	1,095,773	1,142,797	-4.1
Gross profit	181,821	116,547	+56.0
Adjusted EBITDA (Note)	119,479	74,740	+59.9
Profit/(loss) for the period	35,201	(22,543)	N/A
Basic earnings/(loss) per Share (HK cents)	1.83	(1.17)	N/A

Note:

Adjusted EBITDA represents profit/(loss) before finance costs (excluding foreign exchange losses on borrowings and Convertible Bonds), income tax, depreciation, amortization and change in fair value of a financial liability at fair value through profit or loss.

	As at	As at
	30 June 2019	31 December 2018
	(Unaudited)	(Audited)	%
	HK$'000	HK$'000	Change
Financial position
Total assets	3,280,743	3,414,467	-3.9
Shareholders' equity	1,367,899	1,339,150	+2.1
Net asset value per Share (HK$)	0.711	0.696	+2.1

- 1 -

The Board presents the unaudited consolidated interim results of the Group for the six months ended 30 June

2019 as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS

For the six months ended 30 June 2019

		Six months ended 30 June
		2019			2018
		(Unaudited)	(Unaudited)
	Notes	HK$'000	HK$'000
Revenue	6	1,095,773			1,142,797
Cost of sales	8	(913,952)			(1,026,250)
Gross profit		181,821			116,547
Other income	6	3,243			2,279
Other gains/(losses), net	7	1,691			(333)
Distribution and selling expenses	8	(39,498)			(35,386)
Administrative expenses	8	(31,095)			(34,772)
Research and development expenses	8	(36,854)			(40,220)
Foreign exchange losses, net		(77)			(2,222)
Changes in fair values of investment properties	13(a)	114			3,704
Net impairment losses on financial assets	15(c)	(9,459)			(1,499)
Operating profit		69,886			8,098
Finance costs, net	9	(33,011)			(32,658)
Change in fair value of a financial liability at fair
value through profit or loss	20	(1,763)			-
Profit/(loss) before income tax		35,112			(24,560)
Income tax credit	10	89			2,017
Profit/(loss) for the period		35,201			(22,543)
		HK cents	HK cents
Earnings/(loss) per share
Basic and diluted	11	1.83			(1.17)

- 2 -

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the six months ended 30 June 2019

		Six months ended 30 June
		2019	2018
		(Unaudited)		(Unaudited)
	Notes	HK$'000		HK$'000
Profit/(loss) for the period		35,201	(22,543)
Other comprehensive (loss)/income, net of tax
Items that will not be reclassified to profit or loss
Exchange differences arising on translation into
presentation currency		(6,397)	(11,589)
Revaluation of leasehold land and buildings	13(b)	(92)	16,312
Recognition of deferred income tax liability on
revaluation of leasehold land and buildings		37	(2,889)
Total comprehensive income/(loss) for the period, net
of tax		28,749	(20,709)

- 3 -

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

At 30 June 2019

		As at		As at
		30 June 2019		31 December 2018
		(Unaudited)		(Audited)
	Notes	HK$'000		HK$'000
ASSETS
Non-current assets
Investment properties	13(a)	55,448	55,449
Property, plant and equipment	13(b)	1,122,989	1,166,333
Right-of-use assets	14	2,186	-
Land use rights		68,372	-
Prepaid lease payments		-	70,897
Pledged deposit on loan from a related company		7,205	7,989
Prepayments for the acquisition of property, plant
and equipment		2,383		1,724
Total non-current assets		1,258,583	1,302,392
Current assets
Inventories		258,327	319,968
Trade receivables	15	703,780	690,931
Bills receivable	15	891,313	924,355
Prepayments, deposits and other receivables		26,599	31,509
Pledged bank deposits		10,402	78,630
Bank balances and cash		131,739		66,682
Total current assets		2,022,160		2,112,075
Total assets		3,280,743	3,414,467
LIABILITIES
Non-current liabilities
Other payables		491	566
Bank borrowings	19	209,179	268,407
Lease liabilities	14	1,014	-
Deferred income tax liabilities		29,575		29,617
Total non-current liabilities		240,259	298,590
Current liabilities
Trade and bills payables	16	697,020	808,951
Other payables and accruals	17	153,845	130,790
Current income tax liabilities		4,264	4,584
Loans from related companies	18	191,222	226,358
Bank borrowings	19	473,271	606,044
Lease liabilities	14	1,200	-
Financial liability at fair value through profit or loss	20	151,763		-
Total current liabilities		1,672,585		1,776,727
Total liabilities		1,912,844	2,075,317
EQUITY
Share capital	21	1,191,798	1,191,798
Reserves		176,101		147,352
		1,367,899		1,339,150
Total equity and liabilities		3,280,743	3,414,467

- 4 -

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION FOR THE SIX MONTHS ENDED 30 JUNE 2019

1. GENERAL INFORMATION
   Shougang Concord Century Holdings Limited (the "Company") is an investment holding company and together with its subsidiaries (collectively referred to as the "Group") are principally engaged in the manufacturing of steel cords and processing and trading of copper and brass products.
   The Company is a limited liability company incorporated in Hong Kong. The address of its registered office is Room 1215, 12/F., Honour Industrial Centre, 6 Sun Yip Street, Chai Wan, Hong Kong.
   The Company's shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
   This condensed consolidated interim financial information is presented in thousands of units of Hong
   Kong dollar (HK$'000), unless otherwise stated.
   This condensed consolidated interim financial information has not been audited.
2. BASIS OF PREPARATION
   This condensed consolidated interim financial information for the six months ended 30 June 2019 has been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA"). This condensed consolidated interim financial information should be read in conjunction with the annual consolidated financial statements for the year ended 31 December 2018, which have been prepared in accordance with Hong Kong Financial Reporting Standards
   ("HKFRS").
3. ACCOUNTING POLICIES
   The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except for the estimation of income tax (Note 10), accounting treatment for the financial liability at fair value through profit or loss and the adoption of new and amended standards as set out below.
   3.1 Financial liability at fair value through profit or loss
4. 1. Classification
      The Group, at initial recognition, irrevocably designates the convertible bonds issued by the Company as a financial liability at fair value through profit or loss.
   2. • 5 -