On March 21, Ge Longhui | Haojiang Electromechanical (01408.HK) announced that for the year ended December 31, 2023, the company's total revenue was MOP 128.3 million (2022: MOP 143.0 million). Gross profit and gross margin were MOP 7.4 million (2022: MOP 25.1 million) and 5.8% (2022:17.5%), while net loss and net loss rates were MOP 3.8 million (2022: net profit of MOP 9.3 million) and 2.9% (2022: net profit ratio 6.5%), respectively.
The shift from net profit to net loss in the current year was mainly due to a decrease in the number of winning projects compared to fiscal year 2022, and the profit margin of the winning projects narrowed sharply. However, to a certain extent, these projects have helped the Group to cover some of its fixed costs and back-office expenses. Negotiating and bargaining for engineering changes to the project proved particularly difficult, as many orders had lower returns than expected. The Group's main pressure comes from payroll expenses. Since there were no layoffs this year, the Group had to bear a heavy burden of employee costs, and the meager project profits were insufficient to cover fixed costs and salaries.
This year, the Group has a total of about 19 projects, 9 in the private sector and 10 in the public sector. Furthermore, the Group continues to submit bids for new projects to drive revenue growth and maintain business stability.