Paliburg (617) H1 2024 earnings summary

Executive summary

• Consolidated loss attributable to shareholders was HK$676.3 million for H1 2024, up 76.5% year-over-year, mainly due to lower property sales, higher finance costs, and increased taxation charges in China.

• Gross profit for H1 2024 was HK$414.2 million, down 35.5% from HK$641.8 million year-over-year; EBITDA was HK$78.0 million, down 72.6%.

• Hotel business achieved nearly 60% year-on-year growth in operating profit before depreciation, despite challenging market conditions.

• Depreciation charges on hotel properties in Hong Kong amounted to HK$338.4 million, impacting reported results but not cash flow.

• Loss from core business operations widened to HK$347.4 million, a 183.8% increase year-over-year.

Financial highlights

• Revenue for H1 2024 was HK$1,392.0 million, down 13.1% year-over-year.

• Operating loss was HK$278.6 million (H1 2023: HK$79.3 million loss); loss before tax was HK$933.5 million (H1 2023: HK$610.1 million loss).

• Net cash flows from operating activities were HK$21.0 million, a significant decrease from HK$368.1 million in H1 2023.

• No interim dividend declared for 2024.

• Net asset value per share (book) was HK$8.53, and adjusted net asset value per share was HK$14.00 as at 30 June 2024.

Outlook and guidance

• Hong Kong's economy is expected to grow 2.5% to 3.5% in 2024, with anticipated interest rate cuts in the US potentially improving financial conditions.

• The group is actively pursuing asset disposals and monetisation to reinforce liquidity and financial strength.

• Supportive government measures in Hong Kong and China are expected to benefit the hotel and property sectors, though market volatility remains.

• Directors are monitoring volatile economic and property market conditions in Hong Kong and Mainland China.