According to the Zhitong Finance App, Rongyang Industrial (02078) issued an announcement. The Group expects to obtain profit after tax of approximately HK$29.4 million for the year ended 31 December 2023, and an annual loss after tax of approximately HK$104.6 million for the year ended 31 December 2022.
Excluding the investment property business that was terminated after completing the sale of Hongrui Aluminum Co., Ltd. in the Changji Zhundong Economic and Technological Development Zone on December 30, 2023, the Group is expected to obtain a profit of about HK$32.6 million after tax from continuing operations this year, and an annual loss of about HK$51.6 million after tax from continuing operations during the same period.
According to the data analysis currently obtained by management, although the Group's total revenue has decreased compared to the same period, the main reasons for turning a loss into profit are: an increase in the overall gross margin of the Group through continuous cost control and production efficiency; a decrease in distribution and sales expenses due to an increase in sales ratio with lower transportation costs; a significant reduction in administrative expenses, mainly due to impairment losses, depreciation, and a decrease in salary and benefit expenses, offset by an increase in fixed asset disposal losses; a decrease in financial costs due to the reduction in interest expenses after strategic repayment of bank loans; the sale of subsidiaries Changji and Rongyang Industrial (Jiangmen) Co., Ltd. Non-recurring income; and the return of income tax over provisions made in previous years.