(28 August, 2024 – Hong Kong)

 

Highlights:

• Revenue was approximately HK$349.6 million, down 10.9% year-one-year
• Gross profit was approximately HK$135.9million, a year-on-year decrease of 12.4%
• Property segment Revenue increased near 1.5 time to HK$22 million
• Latin America and Caribbean Segment Revenue increased to HK$11.4 million

 

Financial Highlights:

	For the 6 months ended 30 June
HK$’000	1H2024	1H2023	Change
Revenue	349,608	392,469	-10.9%
Gross profit	135,898	155,081	-12.4%
Profit attributable to owners	(550,961)	26,035

 

(August 28, 2024 - Hong Kong) Realord Group Holdings Limited (the "Company", together with its subsidiaries collectively referred to as the "Group", Hong Kong stock code: 1196) announces the unaudited condensed consolidated results of the company and its subsidiaries for the six months ended 30 June 2024. During the period under review, the Group’s revenue was HK$392.46 million, down 10.9% from the same period last year; gross profit was HK$135.89 million, down 12.4% from the same period last year. The Group recorded a net loss of HK$551 million in 1H2024.

 

Business review and outlook and corporate strategy

The Group's main business segments include property, financial services, environmental protection (EP), department stores, and Latin America and the Caribbean (LAC).

 

Property Segment

The revenue from property classification mainly comes from rental income of investment properties. The Group generated rental income of 22.2 million Hong Kong dollars in 1H2024. The increase in rental income was mainly generated from the accrued rental income under rent-free period from the Phase I of Realord Technology Park in 1H2024. The number of tenants of Sincere Mall in Realord Villas in Longhua District has increased to 50, which include children's amusement center, education center, restaurants, fitness studios and billiard room. Realord Technology Park, located in Guangming District, Shenzhen and with a gross floor area (GFA) of about 111,000 square meters, For Phase I, a lease agreement was signed with hotel operator with international branded hotel operating experience under a lease term starting from 2024. For Phase II, the development plan will

be started once government approval is granted. 

 

The redevelopment works of urban renewal project of the Qiankeng Property (also known as the “Guanzhang Electric Factory Urban Renewal Unit”) with GFA of approximately 166,000 square meters located in Longhua District, Shenzhen were processing since the Group obtained the construction permit on earthwork and foundation construction in October 2023. In May 2024, the construction project planning permit was obtained from relevant government authority. In July 2024, the construction permit was obtained and the redevelopment works on basement main structure engineering were processing up to the date of report

 

The Zhangkengjing Industrial Park Property (also known as the Urban Renewal Project of Qianhai Realord Cross-border Logistics Park), located in Longhua District, Shenzhen and its application for changing the land use from industrial use to residential apartment and commercial use is still under review.

 

As for the Laiying Garden project in Nanshan District, Shenzhen, the Group obtained the land use permit from relevant government authority in July 2023 and obtained the construction permit on earthwork and foundation construction in March 2024 and the redevelopment works on foundation and earthwork construction were processing up to the date of report.

 

 

Latin American and Caribbean Segment

Grenada development project in (located in the Hartman Hill area of St. George's Parish and divided into three lots with an area of 450 acres) (the "Grenada Project") involves the development of a mixed property project, including educational facilities, student apartments residential properties, hotels and resort facilities, commercial developments and shopping facilities, and the longer planned establishment of university institutions and related amenities.

 

Through the Grenada Project's Citizenship by Investment Program (“CBI Program”), the Group is allowed to raise funds from investors of the project to finance the construction and development of the project. Qualified investors who invest real estate on the project will be granted a permanent citizenship and passport to Grenada. In the first half of 2024, the Group's revenue from CBI program consulting services was 11.4 million Hong Kong dollars. The increase in revenue was resulted from the client’s citizenship had been granted by the Minister as set out in Section 8 of the Grenada Citizenship by Investment Act 15 of 2013.

 

The Grenada Project provides the Group with a valuable opportunity to diversify its business and operations in the Caribbean and Latin America regions and to expand the scale of its overseas operations. By introducing foreign investment under Grenada's CBI program, the Group has launched the Grenada project, established a management and marketing team, as well as setting up offices in Beijing, Shanghai, Shenzhen and Hong Kong, and hired consultants in the United States to implement marketing strategies to promote CBI programmes.

 

Relying on the experience of the Grenada project, the group has further targeted investment in four other Caribbean countries, namely Antigua and Barbuda, Saint Lucia, Saint Kitts and Nevis, and Dominica. It is now looking for strong and capable investors. Business partners with outstanding track records, participating in projects in selected Caribbean countries and the Republic of Panama. Based on the planning and feasibility studies of the projects and the necessary approvals from various local governments, it is expected that the Group will launch such projects in the relevant areas in the near future.

 

Financial Services Segment

In terms of financial services, during the period under review, the revenue generated was approximately HK$87.3 million, and the profit was approximately HK$30.6 million. For Financial Services Segment, the Group will continue to develop various investment products to meet market needs and provide customers with diversified high-quality services in the international market.

 

Environmental Protection Segment

The revenue of Environmental Protection Segment decreased by HK$33.9 million from HK$170.6 million in 1H2023 to HK$136.7 million in 1H2024 since the Group imposed stricter credit control on customers and concentrated on its business in Japan market. The decrease in gross profit resulted from the decrease in revenue and the increase in provision for expected credit losses from long outstanding trade receivables resulting from the delay in repayments from customers. EP Segment remained to be the Group’s major revenue contributor which was benefited from the large scale of Realord EP Japan leased land in Osaka, Japan with approximately 19,609 square meters (4 pieces). The Group will concentrate on searching for new sources of metal scraps and exploring new customers in Japan.

 

Department Store Segment

For the department store segment, revenue generated during the period under review was approximately HK$65 million, representing a decrease of 12.6% as compared to the same period last year, and a decline in gross profit margin from 59% in 1H2023 to 55.4% in 1H2024 as a result of more price cutting to sales promotion. In the first half of 2024, Hong Kong's consumer and retail market experienced a period of weak consumption, resulting in fierce competition among retailers and more price reduction promotions. The overall stagnant market sentiment also had an impact on the Group's results in the first half of 2024. Taking into account the performance of the segment, the department store segment continues to take proactive measures to reduce operating costs; negotiate with store owners for rent concessions; and re-evaluate the profitability of stores and products.

 

Outlook

In the face of uncertainties such as the complex and volatile global economy, the Group will adopt a prudent and flexible approach to control operating costs and adjust business operations strategies to cope with the challenging market. It will continue to pay attention to the business plans of each business, associated risks and prospects to maximize shareholders’ returns.