Shanghai Able Digital Science&Tech Co., Ltd. — Annual Report 2021

Mar 25, 2022

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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(incorporated in Bermuda with limited liability)

(Stock Code: 1205)

ANNOUNCEMENT OF ANNUAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2021 AND PROPOSED ADOPTION OF NEW BYE-LAWS

The board of directors (the “ Board ”) of CITIC Resources Holdings Limited (the “ Company ”) announces the consolidated results of the Company and its subsidiaries (collectively, the “ Group ”) for the year ended 31 December 2021.

FINANCIAL HIGHLIGHTS

Year ended 31 December	2021	2020	Change
	HK$ million	HK$ million
Revenue	4,349.4	2,850.1	52.6%
EBITDA1	1,852.6	257.4	619.6%
Adjusted EBITDA2 Proft/(loss) attributable to shareholders	2,426.9 1,103.4	618.7 (363.8)	292.3% N/A

1 profit/(loss) before tax + finance costs + depreciation + amortisation

2 EBITDA + (share of finance costs, depreciation, amortisation, income tax credit/expense and non-controlling interests of a joint venture)

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The global economy and commodity markets are recovering from the historic collapse in demand caused by the coronavirus disease 2019 (“ COVID-19 ”). The surplus in global crude oil inventories that built up last year is being consumed and global oil inventories are returning to prepandemic levels in 2021.

In comparing with 2020, the average Dated Brent and Platts Dubai crude oil prices increased by approximately 69.6% and approximately 64.1% to US$70.9 per barrel and US$69.4 per barrel respectively. The revenue of the Group climbed up by approximately 52.6% year-on-year. The Group recorded a profit attributable to shareholders of HK$1,103.4 million in 2021 as compared with a loss attributable to shareholders of HK$363.8 million in 2020. This was mainly due to a combination effect of a sharp increase in crude oil and other related commodity prices in 2021. The substantial turnaround from a loss to a profit attributable to shareholders was primarily attributable to the following factors:

• a significant improvement in operating results of the oil business of the Group, including a substantial share of profit of HK$306.3 million from the Group investment in Karazhanbas oilfield when comparing with a record of share of loss of HK$279.9 million of last year. The improvement in operating results, from the oil business of the Group as a whole was mainly attributable to an increase in average realised crude oil price and stringent ongoing costs control during the year;

• the Group’s aluminium smelting segment and coal segment recorded turnaround in operating results from losses in 2020 to a profit in 2021 which was mainly due to an increase in average selling price of aluminium and coal as compared with 2020; and

• a reduction in finance costs of the Group by approximately HK$66.5 million, representing a drop of approximately 44.2% year-on-year, which was mainly due to the Group having successfully refinanced its loan at a significant lower finance cost, and its debt reduction with loan prepayment by utilising internal sources of fund in 2021.

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FINANCIAL RESULTS

CONSOLIDATED INCOME STATEMENT Year ended 31 December

Notes REVENUE 3 Cost of sales Gross proft Other income, gains and losses, net 4 Selling and distribution costs General and administrative expenses Other expenses, net Finance costs 5 Share of proft/(loss) of: Associates A joint venture PROFIT/(LOSS) BEFORE TAX 6 Income tax expense 7 PROFIT/(LOSS) FOR THE YEAR ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS OF THE COMPANY 8 Basic Diluted	2021 HK$’000 4,349,406 (3,162,643) 1,186,763 188,531 — (324,906) (52,762) (83,822) 116,220 306,299 1,336,323 (222,176) 1,114,147 1,103,366 10,781 1,114,147 HK cents 14.04 14.04	2020 HK$’000 2,850,058 (2,717,115) 132,943 402,721 (11,406) (268,117) (47,689) (150,315) (40,070) (279,894) (261,827) (98,690) (360,517) (363,848) 3,331 (360,517) HK cents (4.63) (4.63)

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CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December

PROFIT/(LOSS) FOR THE YEAR OTHER COMPREHENSIVE INCOME/(LOSS) Other comprehensive income/(loss) that may be reclassifed to proft or loss in subsequent periods: Cash fow hedges: Efective portion of changes in fair value of hedging instruments Income tax efect Exchange diferences on translation of foreign operations Reclassifcation adjustments for foreign operations deregistered or disposed of, net Share of other comprehensive (loss)/income of associates Share of other comprehensive income/(loss) of a joint venture Reclassifcation adjustments for an associate disposed of Net other comprehensive loss that may be reclassifed to proft or loss in subsequent periods Other comprehensive income/(loss) that will not be reclassifed to proft or loss in subsequent periods: Re-measurement gain/(loss) on defned beneft plan: Changes in fair value Income tax efect Share of other comprehensive income/(loss) of a joint venture Share of other comprehensive income/(loss) of an associate Net other comprehensive income/(loss) that will not be reclassifed to proft or loss in subsequent periods OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR, NET OF TAX TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR ATTRIBUTABLE TO: Shareholders of the Company Non-controlling interests	2021 HK$’000 1,114,147 (13,405) 4,022 (9,383) 77,158 (3,967) (65,519) 1,488 — (223) 11,996 (3,599) 8,397 8,647 25,038 42,082 41,859 1,156,006 1,136,702 19,304 1,156,006	2020 HK$’000 (360,517) (328,108) 98,432 (229,676) 185,100 (23,091) 22,755 (1,987) 1,086 (45,813) (4,444) 1,333 (3,111) (7,332) (5,678) (16,121) (61,934) (422,451) (442,694) 20,243 (422,451)

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December

Notes NON-CURRENT ASSETS Property, plant and equipment Right-of-use assets Goodwill Mining assets and stripping costs Exploration, evaluation and development expenditure Investment in an associate Investment in a joint venture Prepayments, deposits and other receivables Time deposit Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade receivables 10 Prepayments, deposits and other receivables Derivative fnancial instruments Pledged deposit Cash and deposits 11 Total current assets CURRENT LIABILITIES Accounts payable 12 Tax payable Accrued liabilities and other payables Derivative fnancial instruments Bank and other borrowings Lease liabilities Provisions for long-term employee benefts Provisions Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES	2021 HK$'000 3,838,772 83,123 24,682 112,049 112,627 2,893,101 2,073,765 38,594 88,754 187,832 9,453,299 431,595 704,889 167,372 21,012 — 1,925,573 3,250,441 135,803 54,113 919,545 643 240,669 26,463 46,667 1,163 1,425,066 1,825,375 11,278,674	2020 HK$'000 3,481,533 93,635 24,682 113,378 146,347 2,954,414 1,757,333 58,734 65,538 187,240
		8,882,834
		385,931 412,653 166,178 71,712 41,706 2,314,285
		3,392,465
		113,921 502 839,084 14,071 141,106 29,900 49,741 1,235
		1,189,560
		2,202,905
		11,085,739

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 December

TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Bank and other borrowings Lease liabilities Deferred tax liabilities Provisions for long-term employee benefts Provisions Total non-current liabilities NET ASSETS EQUITY Equity attributable to shareholders of the Company Issued capital Reserves Non-controlling interests TOTAL EQUITY	2021 HK$'000 11,278,674 3,418,480 41,102 256,016 19,919 619,833 4,355,350 6,923,324 392,886 6,551,531 6,944,417 (21,093) 6,923,324	2020 HK$'000 11,085,739 4,673,760 55,953 90,919 26,944 470,845 5,318,421 5,767,318 392,886 5,414,829 5,807,715 (40,397) 5,767,318

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NOTES

1. BASIS OF PREPARATION

The significant accounting policies applied in the preparation of the consolidated financial statements of the Group are set out below. The consolidated financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) (which include all Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards (“ HKASs ”) and Interpretations) issued by the Hong Kong Institute of Certified Public Accountants, accounting principles generally accepted in Hong Kong and the disclosure requirements of the Hong Kong Companies Ordinance. The consolidated financial statements have been prepared under the historical cost convention, except for derivative financial instruments which have been measured at fair value. The consolidated financial statements are presented in Hong Kong dollar (“ HK$ ”) and all values are rounded to the nearest thousand (HK$’000) except when otherwise indicated.

Certain balances in prior year have been reclassified in conformity with current year’s presentation.

Basis of consolidation

The consolidated financial statements include the financial statements of the Group for the year ended 31 December 2021. A subsidiary is an entity (including a structured entity), directly or indirectly, controlled by the Company. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee (i.e., existing rights that give the Group the current ability to direct the relevant activities of the investee).

When the Company has, directly or indirectly, less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• (a) the contractual arrangement with the other vote holders of the investee;

• (b) rights arising from other contractual arrangements; and

• (c) the Group’s voting rights and potential voting rights.

The financial statements of the subsidiaries are prepared for the same reporting period as the Company, using consistent accounting policies. The results of subsidiaries are consolidated from the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Profit or loss and each component of other comprehensive income are attributed to shareholders of the Company and also to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. Accounting policies of subsidiary companies have been changed where necessary in the Financial Statements to ensure consistency with the accounting policies adopted by the Group.

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control described above. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.

When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in consolidated profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. It means the amounts previously recognised in other comprehensive income are reclassified to profit or loss or transferred to another category of equity as specified or permitted by applicable HKFRSs.

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2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the following new and revised HKFRSs which are effective for the current accounting period beginning on 1 January 2021:

HKFRS 16 (Amendments) Covid-19-Related Rent Concessions HKFRS 9, HKAS 39, HKFRS 7, Interest Rate Benchmark Reform — Phase II HKFRS 4 and HKFRS 16 (Amendments)

The adoption of the new and revised HKFRSs in the current year has no material impact to the Group.

3. OPERATING SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services and has four reportable operating segments as follows:

• (a) the aluminium smelting segment comprises the operation of the Portland Aluminium Smelter (“ PAS which sources alumina and produces aluminium ingots in Australia;

• (b) the coal segment comprises the operation of coal mines and the sale of coal in Australia;

• (c) the import and export of commodities segment comprises the export of various commodity products such as aluminium ingots and alumina; and the import of other commodity products and manufactured goods such as steel, and vehicle and industrial batteries and tyres into Australia; and

• (d) the crude oil segment comprises the operation of oilfields and the sale of oil in Indonesia and China.

Management monitors the results of the Group’s operating segments separately for the purposes of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit/(loss), which is a measure of adjusted profit/(loss) before tax. The adjusted profit/ (loss) before tax is measured consistently with the Group’s profit/(loss) before tax except that interest income, finance costs, and share of profit/(loss) of associates and a joint venture as well as head office and corporate expenses are excluded from such measurement.

Segment assets exclude investment in an associate, investment in a joint venture, deferred tax assets, pledged deposit, cash and deposits, and other unallocated head office and corporate assets as these assets are managed on a group basis.

Segment liabilities exclude bank and other borrowings, lease liabilities, deferred tax liabilities and other unallocated head office and corporate liabilities as these liabilities are managed on a group basis.

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3. OPERATING SEGMENT INFORMATION (continued)

Year ended 31 December 2021 HK$’000 Segment revenue: Sales to external customers Other income Segment results Reconciliation: Interest income and unallocated gains Unallocated expenses Unallocated fnance costs Share of proft of: An associate A joint venture Proft before tax Segment assets Reconciliation: Investment in an associate Investment in a joint venture Unallocated assets Total assets Segment liabilities Reconciliation: Unallocated liabilities Total liabilities Other segment information: Depreciation and amortisation Unallocated amounts Impairment losses recognised in the consolidated income statement Impairment losses reversed in the consolidated income statement Capital expenditure Unallocated amounts Additions to right-of-use assets	Aluminium smelting 1,257,121 76,430 1,333,551 364,912 554,361 436,538 26,814 91 — 140,752 3,549	Coal 740,707 11,770 752,477 141,420 602,759 258,612 32,395 31,902 — 5,329 10,399	Import and export of commodities 1,003,404 7,715 1,011,119 28,607 622,664 66,916 — — (1,510) — —	Crude oil 1,348,174 13,622 1,361,796 646,872 3,759,396 803,860 355,021 1,039 (4,668) 516,206 10,000	Total 4,349,406 109,537 4,458,943 1,181,811 78,994 (263,179) (83,822) 116,220 306,299 1,336,323 5,539,180 2,893,101 2,073,765 2,197,694 12,703,740 1,565,926 4,214,490 5,780,416 414,230 18,202 432,432 33,032 (6,178) 662,287 4,697 666,984 1 23,948

1 Capital expenditure consists of additions to property, plant and equipment, mining assets and stripping costs, exploration, evaluation and development expenditure.

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3. OPERATING SEGMENT INFORMATION (continued)

Year ended 31 December 2020 HK$’000 Segment revenue: Sales to external customers Other income Segment results Reconciliation: Interest income and unallocated gains Unallocated expenses Unallocated fnance costs Share of loss of: Associates A joint venture Loss before tax Segment assets Reconciliation: Investments in an associate Investment in a joint venture Unallocated assets Total assets Segment liabilities Reconciliation: Unallocated liabilities Total liabilities Other segment information: Depreciation and amortisation Unallocated amounts Impairment loss recognised in the consolidated income statement Impairment losses reversed in the consolidated income statement Capital expenditure Unallocated amounts Additions to right-of-use assets	Aluminium smelting 836,431 119,942 956,373 (31,594) 400,318 406,577 12,966 — (378) 16,117 1,663	Coal 400,401 35,650 436,051 (67,459) 666,396 216,946 45,502 1,629 — 31,975 23,746	Import and export of commodities 805,755 40,096 845,851 53,321 385,107 64,206 2,352 2,462 (6,245) — —	Crude oil 807,471 11,221 818,692 166,067 3,433,465 665,987 289,846 — (410) 576,637 —	Total 2,850,058 206,909 3,056,967 120,335 195,812 (107,695) (150,315) (40,070) (279,894) (261,827) 4,885,286 2,954,414 1,757,333 2,678,266 12,275,299 1,353,716 5,154,265 6,507,981 350,666 18,293 368,959 4,091 (7,033) 624,729 2,562 627,2911 25,409

1 Capital expenditure consists of additions to property, plant and equipment, mining assets and stripping costs, exploration, evaluation and development expenditure.

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3. OPERATING SEGMENT INFORMATION (continued)

Geographical information

(a) Revenue from external customers

China Australia Europe Other Asian countries Others	2021 HK$'000 1,247,524 978,617 520,924 1,214,270 388,071 4,349,406	2020 HK$'000 726,371 719,915 348,485 1,021,724 33,563
		2,850,058

The revenue information above is based on the location of the customers.

(b) Non-current assets

Hong Kong China Australia Kazakhstan Other Asian countries	2021 HK$'000 38,217 3,464,537 3,625,394 2,073,991 63,328 9,265,467	2020 HK$'000 56,611 3,211,761 3,627,457 1,757,477 42,288
		8,695,594

The non-current assets information above is based on the location of the assets which exclude deferred tax assets.

Information about major customers

During the year, revenue of HK$1,247,524,000 (2020: HK$701,413,000) was derived from sales to a customer of the crude oil segment, which amounted to more than 10% of the Group’s revenue for the year.

During the year, revenue of HK$532,381,000 and HK$503,228,000 (2020: HK$337,094,000 and HK$309,310,000) was derived from sales to two customers of the aluminium smelting segment respectively. Each of these two customers amounted to more than 10% of the Group’s revenue for the year.

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4. OTHER INCOME, GAINS AND LOSSES, NET

An analysis of the Group’s other income, gains and losses, net is as follows:

Interest income Handling service fees Sale of scrap Reversal of provision for abandonment cost Gain on disposal of investment in an associate Reclassifcation adjustments for foreign operations deregistered or disposed of, net Reversal of provision for inventories Gain on disposal of items of exploration, evaluation and development expenditure Gain/(loss) on disposal of items of property, plant and equipment, net Government subsidies Fair value gain on derivative fnancial instruments Compensation for inventories held at Qingdao Port The government loan forgiveness Exchange gains/(losses), net Others 5. FINANCE COSTS An analysis of fnance costs is as follows: Interest expense on bank and other borrowings Interest expense on lease liabilities Other fnance charges: Increase in discounted amounts of provisions arising from the passage of time Others	2021 HK$'000 18,615 7,308 4,382 — — 3,967 — — 7,752 2,691 7,698 — 64,157 54,656 17,305 188,531 2021 HK$'000 78,439 2,586 81,025 684 2,113 83,822	2020 HK$'000 16,430 4,673 2,167 2,830 192,040 23,091 410 15,112 (1,690) 4,086 50,167 19,143 67,585 (36,825) 43,502 402,721 2020 HK$'000 132,875 3,451 136,326 13,872 117 150,315

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6. PROFIT/(LOSS) BEFORE TAX

The Group’s profit/(loss) before tax was arrived at after charging/(crediting):

	2021	2020
	HK$’000	HK$’000
Cost of inventories sold	3,162,643	2,717,115
Depreciation of property, plant and equipment	404,410	334,662
Depreciation of right-of-use assets	26,114	30,748
Amortisation of mining assets and stripping costs Reclassifcation adjustments for foreign operations	1,908	3,549
deregistered or disposed of, net	(3,967)	(23,091)
(Gain)/loss on disposal of items of
property, plant and equipment, net Fair value loss/(gain) on derivative fnancial instruments, net	(7,752) 28,704	1,690 (43,512)
Exchange (gains)/losses, net	(54,656)	36,825
Reversal of write-down of inventories to net realisable value	(6,178)	(6,655)
Provision for impairment of trade receivables, net	91	2,231
Compensation payable *	—	21,583
Provision for impairment of exploration, evaluation and
development expenditure*	31,902	1,482

• These amounts were included in “Other expenses, net” in the consolidated income statement.

7. INCOME TAX EXPENSE

Current – Hong Kong Current – Elsewhere Charge for the year Overprovision in prior years Deferred Total tax expense for the year	2021 HK$’000 — 61,670 (19) 160,525 222,176	2020 HK$’000 — 8,854 — 89,836
		98,690

Hong Kong profits tax is calculated at the rate of 16.5% (2020: 16.5%) on the estimated assessable profit for the year. No provision for Hong Kong profits tax was made as the Group had no assessable profits arising in Hong Kong during the year (2020: Nil).

Taxes on profits assessable elsewhere were calculated at the rates of tax prevailing in the jurisdictions in which the Group operates.

Australia: The Group’s subsidiaries incorporated in Australia were subject to Australian income tax at a rate of 30% (2020: 30%).

Indonesia: The corporate tax rate applicable to the subsidiary which is operating in Indonesia was 25% (2020: 22%). The Group’s subsidiary owning a participating interest in the oil and gas properties in Indonesia was subject to branch tax at the effective tax rate of 15% (2020: 15.6%).

China: The Group’s subsidiaries registered in China were subject to corporate income tax at a rate of 25% (2020: 25%).

Kazakhstan: The Group’s subsidiary incorporated in Kazakhstan was subject to corporate income tax at the rate of 20% (2020: 20%).

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8. EARNINGS/(LOSS) PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS OF THE COMPANY

The calculation of the basic earnings per share (2020: loss per share) amount was based on the profit for the year attributable to ordinary shareholders of the Company of HK$1,103,366,000 (2020: loss of HK$363,848,000) and the weighted average number of ordinary shares in issue during the year, which was 7,857,727,149 (2020: 7,857,727,149) shares.

The Group had no potentially dilutive ordinary shares in issue during the year and for the year ended 31 December 2020.

9. DIVIDEND

	2021	2020
	HK$’000	HK$’000
Proposed fnal dividend of HK4.50 cents (2020: Nil)
per ordinary share	353,598	—

The proposed final dividend for the year is subject to the approval of shareholders at the forthcoming annual general meeting of the Company.

10. TRADE RECEIVABLES

An ageing analysis of the trade receivables, based on the invoice date and net of loss allowance, was as follows:

Within one month One to two months Two to three months Over three months	2021 HK$’000 331,680 216,475 82,314 74,420 704,889	2020 HK$’000 192,336 68,921 69,319 82,077
		412,653

The Group normally offers credit terms of 30 to 120 days to its established customers.

11. CASH AND DEPOSITS

Cash and bank balances Time deposits Less: Time deposit with original maturity over three months Time deposits with original maturity more than one year Pledged deposit for a litigation Cash and cash equivalents Deposits with a fellow subsidiary Time deposit with original maturity over three months Cash and deposits	2021 HK$’000 748,355 706,062 1,454,417 (58,939) (88,754) — 1,306,724 559,910 58,939 1,925,573	2020 HK$’000 505,763 1,915,766 2,421,529 — (65,538) (41,706) 2,314,285 — — 2,314,285

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12. ACCOUNTS PAYABLE

An ageing analysis of the accounts payable, based on the invoice date, was as follows:

Within one month One to three months Over three months	2021 HK$’000 135,719 61 23 135,803	2020 HK$’000 113,839 — 82
		113,921

The accounts payable are non-interest-bearing and are normally settled on terms of 30 to 90 days.

13. EVENTS AFTER THE REPORTING PERIOD

State of emergency in Kazakhstan

On 5 January 2022 the state of emergency in Kazakhstan was declared until 19 January 2022, and restrictions were imposed on communication and transportation of both people and vehicles, including railway and airline carriage.

Currently, the situation in all regions of the country has stabilised and the state of emergency was cancelled. Utilities and life support systems have been fully restored, and restrictions on communication and transportation of both people and vehicles have been relieved.

The events have not had a material impact on the Kazakhstan oilfield’s operations; however, the tensions remain in the country, and further development of the events and their impact on the Kazakhstan oilfield’s operations is not possible to predict.

Russia-Ukraine war

In 2021, ongoing political tensions in the region have intensified as a result of further developments in the situation with Ukraine, which affected commodity and financial markets and increased volatility, especially in exchange rates. Since December 2021, the situation has continued to deteriorate and remains highly volatile. There is increased volatility in the financial and commodity markets. Additional sanctions and restrictions on the business activity of organisations operating in Russia are imposed, with consequences for the economies in the region as a whole, the full range and possible consequences of which cannot be assessed. Due to the geopolitical events around Ukraine and Russia, on 24 February 2022, the oil prices exceeded US$100 per barrel.

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BUSINESS REVIEW

Review

In 2021, the global economic recovery was underway amid fluctuations, and the industrial production and commodity trade also gradually recovered. Driven by multiple factors such as the growth in demand spurred by the popularization of vaccines, the weakening of the US dollar, and intensified geopolitical influences, the crude oil prices have fluctuated upwards. Brent crude oil prices averaged US$70.9 per barrel in 2021, representing an increase of approximately 69.6% year-on-year. The prices of other commodities related to the Company’s principal business also increased significantly. Meanwhile, the Group continued to carry out cost reduction and efficiency improvement as well as asset value enhancement work, and strived for management and technology effectiveness. As a result, the Group recorded a turnaround from loss and achieved substantial improvement in performance during the year.

During the year, the results of each business segment of the Company all recorded profits. In 2021, the Group achieved revenue of HK$4,349.4 million, representing an increase of approximately 52.6% year-on-year; and recorded profit attributable to shareholders of HK$1,103.4 million, turning from losses into profits year-on-year.

Crude oil

In 2021, the acceleration of global vaccine popularisation and the gradual relaxation of epidemic prevention and control measures, such as border closure and travel restriction, had stimulated the growth of crude oil demand. Meanwhile, affected by the production limit in the previous year, the production of crude oil was in slow recovery, and the chaos in global shipping led to a shortage of supply in some areas. Various factors have spurred the continuous rise in crude oil prices. The Group seized the opportunity of rising oil prices, strived to increase production, and took advantage of the market rebound to further improve its operating results.

During the year, the Group’s overall production was 17,686,000 barrels (100% basis), representing an increase of 934,000 barrels (100% basis) compared with 2020. The Karazhanbas oilfield has made great efforts to promote the recovery of production subsequent to the production limit in 2020, and the production has gradually restored and increased by 4.7% compared with last year. Due to the new wells of Yuedong oilfield being put into production pursuant to the development plan and the effective adjustment of workload, the production of Yuedong oilfield increased significantly by approximately 14.1% compared with last year.

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In terms of results, a significant year-on-year increase in the realised sales price and the benefit of “upstream and downstream integration” formed with the newly acquired oilfield ancillary business Caspi Bitum JV LLP led to a substantial increase in share of profit of a joint venture. In Yuedong oilfield, the revenue was approximately 1.8 times that of last year as a result of an increase in both crude oil price and sales volume. The Seram block in Indonesia actively launched sales bidding, and changed the sales pricing benchmark from the original 380 CST to Brent crude oil, and the significant increase in sales price offset the adverse impact of the decline in production, and the revenue of the Seram block decreased by approximately 5.1% compared with last year. The continuous stringent cost control and the rebound of international oil prices have resulted in a significant increase in the performance of the Group’s crude oil business segment compared with last year.

Metals

During the year, despite the favourable external environment, the high freight rates and shipping delays continued to plague the aluminium market. The sales volume of PAS decreased due to the limit of shipping capacity but its revenue increased significantly due to the rebound in aluminium prices compared with last year. In addition to the fair value gain on derivative financial instruments and net exchange gains, the segment results of PAS recorded a turnaround from loss compared with last year.

During the year, the Group's share of profit in Alumina Limited using the equity method increased compared with 2020 due to the increase in alumina prices.

Coal

In the fourth quarter of 2021, the coal market in China was in short supply and the supply in the international shipping market remained tight. As a result, the selling price of coal segment surged in the fourth quarter, and the average price for the whole year rebounded sharply compared with last year. The Group’s sales volume of this segment increased significantly compared with last year because the segment seized the opportunity from the recovery of market demand to increase production and sales. Together with the flourishing results arising from the optimization of production organization as well as cost reduction and efficiency improvement measures, the cost of sales per tonne also decreased. The result of the coal segment recorded a turnaround from loss into profits compared with last year.

Import and export of commodities

During the year, the Group’s segment of import and export of commodities was affected by the rebound in commodity prices, and the selling prices increased significantly compared with last year. Coupled with the consolidation and expansion of the Group's iron ore export agency business and the disposal of the auto parts business at the end of 2020, the overall operational efficiency and profitability were greatly improved.

FINANCIAL MANAGEMENT

During the year, the Group managed to reduce its debt by internal generated cash flow, with its net debt to net total capital ratio reduced to 20.6%. The Group’s financial position and liquidity remained robust throughout the year.

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OUTLOOK

Currently, the spread of the COVID-19 pandemic around the globe continues, and it is still severe in certain overseas locations where the Group operates its business. While maintaining strict epidemic prevention and control measures, the Group has also gradually popularised vaccination in accordance with government guidelines. As at 31 December 2021, the Group had maintained “zero confirmed cases” at all oilfield operation sites. Chinese employees in the Group’s overseas business locations have been fully vaccinated and the vaccination rate of the foreign personnel has reached over 60%. In 2022, the Group will strive to overcome the impact of the pandemic, maintain the health and safety of employees, and ensure the smooth operation of both production and operations.

Looking ahead, with the end of production limits imposed by the Organization of the Petroleum Exporting Countries and major oil-producing countries, the rapid increase of tight oil production in the U.S. and the market’s concerns that the Omicron variant of COVID-19 would curb the demand, and taking into account the geopolitics, regional conflicts, trade protection, high inflation and other political and economic factors, the trend of international oil prices is still uncertain, the downside risks of the global economy are still prominent, and the prices of commodities may be volatile. On one hand, the Group will continue to implement budget control and cost reduction and efficiency improvement measures, “plan before doing”, and strictly control major capital expenditures. Based on its work experience in previous years, the Group will further solidify the long-term mechanism of cost reduction and efficiency improvement, continuously cultivate the potential of cost reduction, improve the Group’s overall risk resilience and profitability, and take the opportunity of market recovery to further improve operating performance. On the other hand, the Group will strengthen our refined management, continuously promote management improvement and institutional reform, increase management efficiency and improve the level of scientific decision-making, and continue to strive for technology effectiveness. The Group will maintain and improve oilfield reserves by conducting reservoir research as well as launching and applying new technologies, so as to enhance the sustainable value of our existing assets. Meanwhile, the Group will also carry out research work in new fields and new projects, and strive to explore a new direction for business development.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

Cash and Deposits

As at 31 December 2021, the Group maintained strong liquidity with undrawn bank facilities of HK$1,711.3 million and had cash and deposit, in total amount of HK$1,925.6 million.

During the year, the outstanding balance of the A Loan (as defined below) totaling US$500.0 million (HK$3,900.0 million) were fully prepaid prior to the final maturity date of the loan facility on 29 June 2022.

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Borrowings

As at 31 December 2021, the Group had total debt of HK$3,726.7 million, which comprised:

• unsecured bank borrowings of HK$2,489.1 million;

• unsecured other borrowings of HK$1,170.0 million; and

• lease liabilities HK$67.6 million

Most of the transactions of the Group’s import and export of commodities business are debt funded. However, in contrast to term loans, these borrowings are self-liquidating, transaction specific and of short durations, and matching the terms of the underlying transaction. Upon the receipt of sale proceeds following the completion of a transaction, the related borrowings are repaid accordingly.

In June 2017, a wholly-owned subsidiary of the Company entered into a facility agreement with a subsidiary of CITIC Limited (a substantial shareholder of the Company) in respect of an unsecured 5-year term loan facility of US$500.0 million (HK$3,900.0 million) (the “ A Loan ”). The proceeds of the A Loan were used mainly to finance the repayment of a term loan of US$490.0 million (HK$3,822.0 million) signed in June 2015. On 31 March 2021, a partial amount of the A Loan totaling US$300.0 million (HK$2,340.0 million) were prepaid by utilizing the Company’s internal sources of available fund amounting to US$150.0 million (HK$1,170.0 million) and by refinancing from a loan drawdown of the C Loan (as defined below) amounting to US$150.0 million (HK$1,170.0 million). On 30 June 2021, the remaining balance of the A Loan amounting to US$200.0 million (HK$1,560.0 million) was fully prepaid by refinancing from a loan drawdown of the D Loan (as defined below). As at 31 December 2021, there was no outstanding balance of the A Loan.

In December 2019, the Company entered into an unsecured 4-year committed US$200.0 million (HK$1,560.0 million) credit facility agreement comprising of US$100.0 million term loan and US$100.0 million revolving loan in form of a self-arranged club loan with 5 financial institutions (the “ B Loan ”) commencing from 31 December 2019. The purpose of the B Loan is to refinance existing indebtedness and/or general corporate funding requirement to support the operation and growth of the business of the Group. As at 31 December 2021, the outstanding balance of the B Loan was US$100.0 million (HK$780.0 million).

In March 2021, the Company entered into a facility agreement with CITIC Finance International Limited (a fellow subsidiary of the Company) in respect of an unsecured 3-year term loan facility of US$150.0 million (HK$1,170.0 million) (the “ C Loan ”). The proceeds of the C Loan was used for refinancing the prepayment of partial amount of US$150.0 million (HK$1,170.0 million) of the A Loan on 31 March 2021. As at 31 December 2021, the outstanding balance of the C Loan was US$150.0 million (HK$1,170.0 million).

In June 2021, a wholly-owned subsidiary of the Company entered into an unsecured 3-year committed US$200.0 million (HK$1,560.0 million) credit facility agreement with China CITIC Bank International Limited (a fellow subsidiary of the Company) (the “ D Loan ”) commencing from 24 June 2021. The proceeds of the D Loan was mainly used for the prepayment of the remaining outstanding balance of the A Loan amounting to US$200.0 million (HK$1,560.0 million) on 30 June 2021. As at 31 December 2021, the outstanding balance of the D Loan was US$200.0 million (HK$1,560.0 million).

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The Group leases certain plant and machinery for its aluminium and coal mining operations under finance leases. The lease liabilities arising from these finance leases as at 31 December 2021 were HK$21.2 million.

As at 31 December 2021, the Group’s net debt to net total capital ratio was 20.6% (31 December 2020: 30.8%). Of the Group’s total debt, HK$267.1 million was repayable within one year, including the D Loan, trade finance and lease liabilities.

Share capital

There was no movement in the share capital of the Company during the year.

Financial risk management

The Group’s diversified business is exposed to a variety of risks, such as market risks (including foreign currency risk, price risk, interest rate risk and inflation risk), credit risk and liquidity risk. The management of such risks is dictated by a set of internal policies and procedures designed to minimise potential adverse effects to the Group. The policies and procedures have proved effective.

The Group enters into derivative transactions, including principally forward currency contracts, forward commodity contracts, interest rate swap contracts, embedded derivatives and electricity hedge agreements. Their purpose is to manage the foreign currency risk, price risk, interest rate risk and inflation risk arising from the Group’s operations and sources of finance.

Opinion

The Board is of the opinion that, after taking into account the existing available borrowing facilities and internal resources, the Group has sufficient resources to meet its foreseeable working capital requirements.

EMPLOYEES AND REMUNERATION POLICIES

As at 31 December 2021, the Group had 179 full time employees, including management and administrative staff.

The Group’s remuneration policy seeks to provide fair market remuneration in a form and value to attract, retain and motivate high quality staff. Remuneration packages are set at levels to ensure comparability and competitiveness with other companies in the industry and market competing for a similar talent pool. Emoluments are also based on an individual’s knowledge, skill, time commitment, responsibilities and performance and by reference to the Group’s profits and performance. Rent-free quarters are provided to some employees in Indonesia.

FINAL DIVIDEND AND CLOSURE OF REGISTER OF MEMBERS

The Board has resolved to recommend the payment of a final dividend of HK4.50 cents per ordinary share for the year ended 31 December 2021 (the “ Final Dividend ”) to shareholders whose names appear on the register of members of the Company on Monday, 27 June 2022. Subject to approval by shareholders at the forthcoming annual general meeting of the Company, the Final Dividend is payable to entitled shareholders on or around Tuesday, 19 July 2022.

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For determining the entitlement of shareholders to the Final Dividend, the register of members of the Company will be closed from Thursday, 23 June 2022 to Monday, 27 June 2022, both days inclusive, during which period no transfer of shares will be registered. For the purpose of ascertaining entitlement of shareholders to the Final Dividend, all transfers of shares accompanied by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not later than 4:30 p.m. on Wednesday, 22 June 2022.

CORPORATE GOVERNANCE CODE

The Board is of the view that the Company has, for the year ended 31 December 2021, applied the principles and complied with the applicable code provisions, and also complied with certain recommended best practices, of the Corporate Governance Code as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS

The Company has adopted a code of conduct for dealings in the securities of the Company by its directors (the “ Securities Dealings Code ”) that is based on the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) as set out in Appendix 10 to the Listing Rules (or on terms no less exacting than the Model Code).

All directors have confirmed, following specific enquiry by the Company, that they have complied with the required standards set out in the Securities Dealings Code throughout the year ended 31 December 2021.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries had purchased, redeemed or sold any of the Company’s listed securities during the year ended 31 December 2021.

AUDIT COMMITTEE

The Company has an audit committee which was established in compliance with rule 3.21 of the Listing Rules with responsibility for reviewing and providing supervision over the Group’s financial reporting process. The audit committee comprises the three independent non-executive directors of the Company.

The audit committee has reviewed the annual results of the Group for the year ended 31 December 2021 with senior management and the external auditor of the Company.

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The figures in respect of the Group’s consolidated statement of financial position, consolidated income statement, consolidated statement of comprehensive income and the related notes thereto for the year ended 31 December 2021 as set out in the preliminary results announcement have been agreed by the Group’s auditor, PricewaterhouseCoopers (“ PwC ”), to the amounts set out in the Group’s draft consolidated financial statements for the year. The work performed by PwC in this respect did not constitute an assurance engagement in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the Hong Kong Institute of Certified Public Accountants and consequently no assurance has been expressed by PwC on the preliminary results announcement.

EVENTS OCCURRING AFTER THE REPORTING PERIOD

Save as disclosed in the note headed "13. EVENTS AFTER THE REPORTING PERIOD" of this announcement and the Company's positive profit alert announcement dated 28 January 2022, there was no other important event or transaction affecting the Group and which is required to be disclosed by the Company to its shareholders from 1 January 2022 up to the date of this announcement.

PROPOSED AMENDMENTS TO THE BYE-LAWS AND ADOPTION OF NEW BYELAWS

The Board proposes to amend the existing bye-laws of the Company (the “ Existing Bye-laws ”) for, among others, conforming with the latest amendments to the Listing Rules. The Board proposes to seek the approval of the shareholders of the Company by way of special resolution (“ Special Resolution ”) at the forthcoming annual general meeting of the Company to be held on 17 June 2022 (the “ 2022 AGM ”) to adopt a new set of bye-laws to replace the Existing Bye-laws. Full text of the Special Resolution will be contained in the notice of the 2022 AGM. A circular containing, inter alia, the proposed amendments to the Existing Bye-laws, together with the notice of the 2022 AGM, will be despatched to shareholders in due course.

By Order of the Board CITIC Resources Holdings Limited Sun Yufeng Chairman

Hong Kong, 25 March 2022

As at the date hereof, Mr. Sun Yufeng and Mr. Suo Zhengang are executive directors of the Company, Mr. Chan Kin is a non-executive director of the Company, and Mr. Fan Ren Da, Anthony; Mr. Gao Pei Ji and Mr. Look Andrew are independent non-executive directors of the Company.

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