irasia.com



SILVERNET GROUP LIMITED
(incorporated in Bermuda with limited liability)

INTERIM RESULTS

UNAUDITED INTERIM RESULTS

The Board of Directors (the "Directors") of Silvernet Group Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim financial statements of the Company and its subsidiaries (the "Group") for the six months ended June 30, 2001, together with the comparative figures for the six months ended February 29, 2000, as follows:

Condensed Consolidated Income Statement

                                                     Six months ended
                                                30.6.2001       29.2.2000
                                              (unaudited)     (unaudited)
                                    Notes         HK$'000         HK$'000

Turnover                            2 & 3           4,383          66,639
Cost of sales                                      (3,871)        (39,983)
                                              -----------     -----------
                                                      512          26,656
Other revenue                                       7,318           2,409
Selling and administration costs                  (10,722)        (49,185)
Other operating expenses                           (4,439)            (34)
                                              -----------     -----------
Loss from operations before
  finance costs                       4            (7,331)        (20,154)
Finance costs                                      (1,178)         (4,772)
                                              -----------     -----------
Loss from operations                               (8,509)        (24,926)
Share of results of associates                      2,732               -
                                              -----------     -----------
Loss before tax                                    (5,777)        (24,926)
Taxation                              5              (789)              -
                                              -----------     -----------
Loss after tax                                     (6,566)        (24,926)
Minority interest                                     461               -
                                              -----------     -----------
Net loss for the period                            (6,105)        (24,926)
Dividend                              6                 -               -
                                              -----------     -----------
Loss retained for the period                       (6,105)        (24,926)
                                              ===========     ===========
Loss per share - basic (cents)        7             (0.17)          (2.38)
                                              ===========     ===========

Notes:

1. Accounting policies

The unaudited interim financial statements of the Group have been prepared in compliance with Hong Kong Statements of Standard Accounting Practice (the "SSAP") No. 25 "Interim financial reporting", and on a basis consistent with the accounting policies as adopted in the Group's audited financial statements for the period ended December 31, 2000.

2. Segmental information

The analysis of the principal activities and the geographical location of the operations of the Company and its subsidiaries during the financial period are as follows:

                                                     Contribution to loss
                                   Turnover             before taxation
                               Six months ended        Six months ended
                                  (unaudited)             (unaudited)
                            30.6.2001   29.2.2000   30.6.2001   29.2.2000
                              HK$'000     HK$'000     HK$'000     HK$'000
By principal activity:
  Continuing operations:
    Property investment           151       2,639        (129)       (263)
    Investment holdings         4,232           -     (10,308)     (6,794)
                          ----------- ----------- ----------- -----------
                                4,383       2,639     (10,437)     (7,057)
  Discontinued operations:
    Sales of Goods                  -      64,000           -     (13,678)
                          ----------- ----------- ----------- -----------
                                4,383      66,639     (10,437)    (20,735)
                          =========== ===========

    Unallocated Corporate expenses                          -         (54)
    Share of results of associates                      2,732           -
    Net interest income/(expenses)                      1,928      (4,137)
                                                  ----------- -----------
                                                       (5,777)    (24,926)
                                                  =========== ===========
By geographical location
  of operations:
    PRC                             -      15,726       6,057     (11,688)
    Korea                           -           -      (5,520)          -
    Hong Kong                   4,383      50,913      (8,242)     (9,101)
                          ----------- ----------- ----------- -----------
                                4,383      66,639      (7,705)    (20,789)
                          =========== ===========

Net interest income/(expenses)                          1,928      (4,137)
                                                  ----------- -----------
                                                       (5,777)    (24,926)
                                                  =========== ===========

3. Turnover

                                                     Six months ended
                                                30.6.2001       29.2.2000
                                              (unaudited)     (unaudited)
                                                  HK$'000         HK$'000

An analysis of turnover by activities
  during the period is as follows:
    Income from sale of investments
      in securities                                 4,232               -
    Income from investment properties                 151           2,639
    Income from retailing business                      -          64,000
                                              -----------     -----------
                                                    4,383          66,639
                                              ===========     ===========

4. Loss from operations before finance costs

The Group's loss from operating activities has been arrived at after charging:

                                                     Six months ended
                                                30.6.2001       29.2.2000
                                              (unaudited)     (unaudited)
                                                  HK$'000         HK$'000
Depreciation and amortization                         223           2,304
Staff costs (including Directors' remuneration)     5,307          15,671
                                              ===========     ===========

5. Taxation

The taxation charge for the period represented the share of taxation other than in Hong Kong attributable to associates calculated at rates prevailing in the relevant jurisdictions.

No provision for Hong Kong Profits Tax has been made in the financial statements for the current period as the Group incurred losses for both periods.

6. Interim dividend

The Directors do not declare any interim dividend for the six months ended June 30, 2001 (29.2.2000: Nil).

7. Loss per share

The calculation of the basic loss per share is based on the unaudited consolidated net loss of the period of HK$6,105,000 (29.2.2000: HK$24,926,000) and on the weighted average of 3,632,428,440 (29.2.2000: 1,054,181,924) ordinary shares in issue during the period.

No diluted loss per share has been calculated for the current period and the corresponding period last year as the exercise of the share options would result in a decrease in the loss per share.

DISCUSSION AND ANALYSIS OF THE GROUP'S PERFORMANCE

Business review

For the six months ended June 30, 2001, the Group recorded a consolidated turnover of HK$4,383,000. Loss before taxation for the period was HK$5,777,000, representing a significant improvement of 77% over that of the corresponding period last year. Based on the weighted average of 3,632,428,440 shares in issue during the period, the basic loss per share was reduced to 0.17 cents as compared with 2.38 cents of the corresponding period last year.

Investment activities

Since disposing of the retailing business in 2000, management repositioned the Group's business to investing in technology-related ventures primarily in China. A number of investments were made and committed in 2000. However, on the back of a deteriorating market condition for technology companies, the Group adopted a cautious approach to making new investments and instead focused on strengthening the business of existing investments. In early 2001, additional capital of US$1,000,000 was injected into Egochina together with US$2,000,000 from minority shareholders to further capitalize the company for its business development. In April, the Group completed the acquisition of 49% of a leading digital network provider and information system integrator in Beijing. The Group also completed the acquisition of a 14.7% stake in 9xo9.com, a wine and sugar trading portal with the top 10 wine producers in China as members, for a total investment of US$2,000,000.

During the period, the Group shared approximately HK$2,732,000 in profits from its portfolio companies. Management believes that over the medium to long term, the portfolio of investments should provide the Group with significant capital growth value.

Investment properties

The income from investment properties dropped by over 90% to approximately HK$150,000. The drastic decrease was due to the continuous decline of the real estate market caused by a slowing economy, both the occupancy rate and the rental yield on investment properties suffered as a consequence.

In February, the Group disposed of a commercial property at a consideration of approximately HK$4,800,000. The profit on the disposal was approximately HK$500,000. The disposal was in line with the Group's strategy to gradually dispose of the entire property portfolio.

Liquidity and financial resources

The Group maintained a strong financial position. At June 30, 2001, the net working capital of the Group totaled approximately HK$159,831,000, representing an increase of 30.5% over that at December 31, 2000.

The Group primarily finances its operation with internal resources and banking facilities provided by its principal bankers in Hong Kong. At June 30, 2001, the Group's cash and bank balances totaled approximately HK$145,120,000, together with a bank loan of HK$31,525,000. Apart from this loan, the Group had nominal amounts of current liabilities and commitments. The gearing of the Group was closely monitored by management so as to maintain a healthy financial position at all time.

Pledge of assets

Certain investment properties and time deposits of the Group, together with corporate guarantees of the Company, are used to secure general banking facilities. The outstanding balance as at June 30, 2001 of such facilities was approximately HK$31,525,000.

Prospects

Management believes the China market will remain the center stage for global investors with her imminent accession to the World Trade Organisation. Abundant investment opportunities will arise in the process in which China transits into a technology based industrial economy. The Group is well positioned to take advantage of this transition with the market knowledge and investment expertise of its major shareholders.

While building an investment portfolio, management will also be alert for opportunities with which the Group could build into a core business. This strategy will require significant resources but will eventually create substantial value for shareholders. The Group will pursue this strategy with an aggressive yet cautious approach. As for market conditions, it is expected that sentiments will begin to recover later this year or early next year. When market condition improves, we should see our portfolio companies become more active in terms of pursuing initial public offerings and/or mergers and acquisitions that would in turn create value for our investments. Meanwhile, the Group will build on its existing platform and maintain a healthy operating environment with stringent cost control measures. Management is confident that the business strategies currently in place will drive the Group into sustainable long-term growth and profitability.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES

During the six months ended June 30, 2001, the Company repurchased its own shares on the Stock Exchange of Hong Kong Limited (the "Stock Exchange") as follows:

                                          Price per share       Aggregate
Month of repurchase   Number of shares   Highest   Lowest   Consideration
                                           (HK$)    (HK$)             HK$

January 2001                 2,050,000     0.194    0.209          85,280

The above shares were cancelled upon repurchase and accordingly the issued share capital of the Company was reduced by the nominal value of these shares. The premium on repurchase was charged against the share premium.

Save as disclosed above, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company's listed securities during the period.

AUDIT COMMITTEE

The Group has an audit committee comprising Mr. Lau Yuen Sun, Adrian and Mr. Xin Luo Lin, both being independent non-executive directors of the Company.

The audit committee has reviewed the unaudited interim report for the period, and discussed with management the accounting principles and practices and internal controls of the Group.

CORPORATE GOVERNANCE

None of the Directors of the Company is aware of any information that would reasonably indicate that the Company is not, or was not for any part of the six months ended June 30, 2001 in compliance with the Code of Best Practice as set out in Appendix 14 of the Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules").

PUBLICATION OF INTERIM RESULT

All the information as required by paragraph 46(1) to 46(6) of Appendix 16 to the Listing Rules will be published on the website of the Stock Exchange in due course.



By Order of the Board
Sun Qiang Chang
Chairman

Hong Kong, September 7, 2001


Source: Silvernet Group Limited
  • Interim Reports
  • Company's Index
  • irasia.com

  • © Copyright 1996-2005 irasia.com Ltd. All rights reserved. Tel: (852) 2831-9792.
    DISCLAIMER: irasia.com Ltd makes no guarantee as to the accuracy or completeness of any information provided on this website. Under no circumstances shall irasia.com Ltd be liable for damages resulting from the use of the information provided on this website.
    TRADEMARK & COPYRIGHT: All intellectual property rights subsisting in the contents of this website belong to irasia.com Ltd or have been lawfully licensed to irasia.com Ltd for use on this website. All rights under applicable laws are hereby reserved. Reproduction of this website in whole or in part without the express written permission of irasia.com Ltd is strictly prohibited.
    TERMS OF USE: Please read the Terms of Use governing the use of our website.