Shanghai Able Digital Science&Tech Co., Ltd. — Interim / Quarterly Report 2023

Jul 27, 2023

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 INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2023

The board of directors (the “ Board ”) of CITIC Resources Holdings Limited (the “ Company ”) announces the unaudited consolidated interim results of the Company and its subsidiaries (collectively, the “ Group ”) for the six months ended 30 June 2023 (the “ Period ”).

FINANCIAL HIGHLIGHTS

Six months ended 30 June	2023	2022	Change
Unaudited	HK$ million	HK$ million
Revenue	2,043.2	3,228.4	(36.7)%
EBITDA1	832.8	1,654.5	(49.7)%
Adjusted EBITDA2	1,140.2	1,947.3	(41.4)%
Profit attributable to ordinary shareholders
of the Company	383.2	893.3	(57.1)%

1 profit before tax + finance costs + depreciation + amortisation

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

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Oil prices have confounded expectations in the first quarter of 2023, with Brent oil price hitting a low of US$72.0 per barrel. The unexpectedly low prices remain as the war in Ukraine continues with no clear end in sight. Other developments have also failed to boost prices as expected. On the other hand, China, the world’s largest importer of crude oil, abandoned its zero-COVID policy in December 2022, which created expectations that Chinese oil demand would quickly return.

This shows that oil price forecasts continue to be unreliable. The economic outlook and Chinese consumption growth are key to demand expectations. Until uncertainty around these factors dissipates, there will not likely to be a clear direction in the global oil market.

During the Period, the Group recorded a profit attributable to ordinary shareholders of the Company of approximately HK$383.2 million, representing a decrease of approximately 57.1% as compared with the same period of last year. The decrease was mainly attributable to the following factors:

• (i) a significant decrease in average selling price of crude oil and the softening of the price of commodities sold by the Group, comparing to the same period of last year; and

• (ii) a significant decrease in the share of profit of an associate.

Despite that, all of the Group’s segments and investments recorded profits for the Period. Although the Group had repaid bank borrowings of approximately HK$761.6 million during the Period, the Group continues to maintain a strong financial position with cash and deposits of approximately HK$1,632.5 million as at 30 June 2023.

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FINANCIAL RESULTS

CONDENSED CONSOLIDATED INCOME STATEMENT

Six months ended 30 June Unaudited

Notes Revenue 3 Cost of sales Gross profit Other income, gains and losses, net 4 General and administrative expenses Other expenses, net Finance costs 5 Reversal of provision for impairment of trade and other receivables Share of profit of: An associate A joint venture Profit before tax 6 Income tax expense 7 Profit for the period Attributable to: Ordinary shareholders of the Company Non-controlling interests Earnings per share attributable to ordinary shareholders of the Company 8 Basic Diluted	2023 HK$’000 2,043,222 (1,615,721) 427,501 65,938 (111,866) (8,571) (89,951) 739 11,700 178,569 474,059 (64,071) 409,988 383,207 26,781 409,988 HK cents 4.88 4.88	2022 HK$’000 3,228,390 (2,167,863) 1,060,527 102,486 (132,932) (14,336) (55,122) 9,624 102,445 286,722 1,359,414 (430,942) 928,472 893,288 35,184 928,472 HK cents 11.37 11.37

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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Six months ended 30 June Unaudited Profit for the period Other comprehensive income/(loss) Other comprehensive income/(loss) that may be reclassified to profit or loss in subsequent periods: Cash flow hedges: Effective portion of changes in fair value of hedging instruments arising during the period Exchange differences on translation of foreign operations Share of other comprehensive income/(loss) of a joint venture Net other comprehensive loss that may be reclassified to profit or loss in subsequent periods Other comprehensive loss for the period, net of tax Total comprehensive income for the period Attributable to: Ordinary shareholders of the Company Non-controlling interests	2023 HK$’000 409,988 – (114,685) 7,617 (107,068) (107,068) 302,920 287,503 15,417 302,920	2022 HK$’000 928,472 13,060 (151,155) (5,994) (144,089) (144,089) 784,383 762,512 21,871 784,383

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Notes Non-current assets Property, plant and equipment Right-of-use assets Mining assets 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 financial instruments Cash and deposits Total current assets Current liabilities Accounts payable 11 Tax payable Accrued liabilities and other payables Dividend payable Bank and other borrowings Lease liabilities Provisions for long-term employee benefits Provisions Total current liabilities Net current assets Total assets less current liabilities	30 June 2023 Unaudited HK$’000 3,371,980 58,669 182,066 27,763 2,796,100 2,561,089 29,116 110,933 31,979 9,169,695 351,498 413,828 130,145 126,395 1,632,467 2,654,333 88,024 109,555 746,029 471,516 – 24,980 42,112 75 1,482,291 1,172,042 10,341,737	31 December 2022 Audited HK$’000 3,601,304 75,915 189,405 27,737 2,784,400 2,374,903 29,626 102,972 56,823 9,243,085 560,457 297,358 105,469 102,995 2,130,203 3,196,482 106,899 59,136 869,273 – 96,166 30,709 41,487 75 1,203,745 1,992,737 11,235,822

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Non-current liabilities Bank and other borrowings Lease liabilities Deferred tax liabilities Provisions for long-term employee benefits Provisions Total non-current liabilities Net assets Equity Equity attributable to ordinary shareholders of the Company Issued capital Reserves Non-controlling interests Total equity	30 June 2023 Unaudited HK$’000 1,826,760 27,086 267,286 15,069 608,392 2,744,593 7,597,144 392,886 7,168,584 7,561,470 35,674 7,597,144	31 December 2022 Audited HK$’000 2,486,640 30,898 328,871 15,268 608,457 3,470,134 7,765,688 392,886 7,352,545 7,745,431 20,257 7,765,688

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NOTES

1. BASIS OF PREPARATION

These unaudited interim condensed consolidated financial statements (“ Financial Statements ”) have been prepared in accordance with Hong Kong Accounting Standard (“ HKAS ”) 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”) and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”).

These Financial Statements do not include all the information and disclosures required in annual consolidated financial statements, and should be read in conjunction with the consolidated financial statements of the Group for the year ended 31 December 2022.

The accounting policies and methods of computation used in the preparation of these Financial Statements are consistent with the consolidated financial statements of the Group for the year ended 31 December 2022, except for the adoption of new and revised standards with effect from 1 January 2023 as detailed in note 2 below.

These Financial Statements were approved and authorised for issue by the Board on 27 July 2023.

2. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES

The Group has adopted the following new and revised Hong Kong Financial Reporting Standards (“ HKFRSs ”) (which include all Hong Kong Financial Reporting Standards, HKASs and Interpretations) issued by the HKICPA for the first time for these Financial Statements.

Amendments to HKFRS17	Insurance contracts
Amendments to HKAS 12	Deferred tax related to assets and liabilities arising from a
	single transaction
Amendments to HKAS 12	International tax reform - pillar two model rules1
Amendments to HKAS 1 and	Disclosure of accounting policies
HKFRS Practice Statement 2
Amendments to HKAS 8	Definition of accounting estimates

• 1 The deferred tax exemption and disclosure requirement of the fact that the exemption has been applied, is effective immediately. The other disclosure requirements are effective for annual periods beginning on or after 1 January 2023.

Several amendments apply for the first time in 2023, but do not have an impact on the interim Condensed Consolidated Financial Statements of the Group.

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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 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 and manufactured goods such as steel into Australia and New Zealand; and

• (d) the crude oil segment comprises the operation of oilfields and the sale of crude 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, which is a measure of adjusted profit before tax. The adjusted profit before tax is measured consistently with the Group’s profit before tax except that interest income, finance costs, and share of profit of an associate 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, 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.

For the six months ended 30 June 2022, revenue for the import and export of commodities comprise of the import of steel products from various countries for distribution in Australia and New Zealand.

In the second half of 2022, a Deed of Termination was signed to cease the import and distribution arrangement with its business partner for steel products. Sales of the Group’s steel products was last transacted in November 2022.

Notwithstanding the cessation of its import and distribution of the steel products, other trading activities, such as commission earned for export of commodities, have continued for the year ended 31 December 2022. In addition, management is in advanced negotiations with external parties to develop new trading product lines. During the Period, management is actively seeking to obtain the rights of sales for crude oil from our joint venture and also exploring the possibility of obtaining the rights of sales for alumina from our associate.

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3. OPERATING SEGMENT INFORMATION (Continued)

Six months ended 30 June Unaudited HK$’000

2023 Segment revenue: Sales to external customers Other income, gains and losses, net Segment results Reconciliation : Interest income and unallocated gains and losses, net Unallocated expenses Unallocated finance costs Share of profit of: An associate A joint venture Profit before tax 2022 Segment revenue: Sales to external customers Other income, gains and losses, net Segment results Reconciliation : Interest income and unallocated gains and losses, net Unallocated expenses Unallocated finance costs Share of profit of: An associate A joint venture Profit before tax	Aluminium smelting 770,240 32,489 802,729 682 Aluminium smelting 736,090 85,658 821,748 228,059	Coal Import and export of commodities 539,350 – 3,142 1,736 542,492 1,736 70,998 3,779 Coal Import and export of commodities 658,647 877,886 2,742 3,051 661,389 880,937 354,258 19,178	Crude oil 733,632 3,239 736,871 335,118 Crude oil 955,767 2,828 958,595 523,403	Total 2,043,222 40,606 2,083,828 410,577 25,332 (62,168) (89,951) 11,700 178,569 474,059 Total 3,228,390 94,279 3,322,669 1,124,898 8,207 (107,736) (55,122) 102,445 286,722 1,359,414

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3. OPERATING SEGMENT INFORMATION (Continued)

HK$’000 Segment assets 30 June 2023 (unaudited) 31 December 2022 (audited) Segment liabilities 30 June 2023 (unaudited) 31 December 2022 (audited)	Aluminium smelting 770,794 761,797 420,968 433,149	Coal Import and export of commodities 712,496 5 680,012 152,980 323,105 6,833 307,431 15,911	Crude oil 3,257,398 3,442,726 609,985 692,479	Total 4,740,693
				5,037,515
				1,360,891
				1,448,970

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 Gain on disposal of items of property, plant and equipment Fair value gain on derivative financial instruments Exchange losses, net Others	2023 HK$’000 39,130 – 2,186 37 23,400 (7,265) 8,450 65,938	2022 HK$’000 10,260 2,867 3,029 740 84,843 (6,468) 7,215
		102,486

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5. FINANCE COSTS

An analysis of finance costs is as follows:

Interest expense on bank and other borrowings Interest expense on lease liabilities Total interest expenses Other finance charges: Increase in discounted amounts of provisions arising from the passage of time Others	2023 HK$’000 74,442 764 75,206 10,914 3,831 89,951	2022 HK$’000 36,134 900
		37,034 11,901 6,187
		55,122

6. PROFIT BEFORE TAX

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

	2023	2022
	HK$’000	HK$’000
Depreciation of property, plant and equipment	240,760	223,568
Depreciation of right-of-use assets	19,127	15,599
Amortisation of other assets	8,912	766
Gain on disposal of items of property, plant and equipment, net	(37)	(738)
Fair value gain on derivative financial instruments	(23,400)	(84,843)
Exchange losses, net	7,265	6,468

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7. INCOME TAX EXPENSE

Current – Hong Kong Current – Elsewhere Charge for the period Underprovision/(overprovision) in prior periods Deferred taxation Total tax expense for the period	2023 HK$’000 – 28,570 16 35,485 64,071	2022 HK$’000 – 161,493 (6) 269,455 430,942

The statutory rate of Hong Kong profits tax was 16.5% (2022: 16.5%) on the estimated assessable profits arising in Hong Kong. No provision for Hong Kong profits tax was made as the Group had no assessable profits arising in Hong Kong during the Period (2022: 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% (2022: 30%).

Indonesia: The corporate tax rate applicable to the subsidiary which is operating in Indonesia was 25% (2022: 25%). 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% (2022: 15%).

Mainland China: The Group’s subsidiaries registered in Mainland China were subject to corporate income tax at a rate of 25% (2022: 25%).

Kazakhstan: The Group’s subsidiary incorporated in Kazakhstan was subject to corporate income tax at a rate of 20% (2022: 20%).

According to HKAS 12 Income Taxes, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.

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8. EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY SHAREHOLDERS OF THE COMPANY

The calculation of the basic earnings per share amount was based on the profit for the Period attributable to ordinary shareholders of the Company of approximately HK$383,207,000 (2022: HK$893,288,000) and the weighted average number of ordinary shares in issue during the Period, which was 7,857,727,149 (2022: 7,857,727,149) shares.

The Group had no potentially dilutive ordinary shares in issue during the Period and for the six months ended 30 June 2022.

9. DIVIDEND

The Board has resolved not to pay an interim dividend for the Period (2022: Nil).

The final dividend of HK6.00 cents per ordinary share for the year ended 31 December 2022, totalling HK$471,464,000, was approved by shareholders at the annual general meeting of the Company held on 16 June 2023 and was paid on 18 July 2023.

10. TRADE RECEIVABLES

An ageing analysis of the trade receivables as at the end of the reporting period, based on the invoice date and net of loss allowance, is as follows:

Within one month One to two months Two to three months Over three months	30 June 2023 Unaudited HK$’000 413,828 – – – 413,828	31 December 2022 Audited HK$’000 143,098 212 85,617 68,431 297,358

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

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11. ACCOUNTS PAYABLE

An ageing analysis of the accounts payable as at the end of the reporting period, based on the invoice date, is as follows:

Within one month One to three months Over three months	30 June 2023 Unaudited HK$’000 84,323 2,812 889 88,024	31 December 2022 Audited HK$’000 106,895 – 4 106,899

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

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BUSINESS REVIEW AND OUTLOOK

Review

Operating Environment

In the first half of 2023, pandemic containment policies were relaxed in China, and the global economy gradually came out of the shadow of the Covid-19 pandemic. The Russia-Ukraine conflict and the US interest rate hike were ongoing, the global supply chain and industrial chain remained fragile and were still seeking a balance. The expectation of global recession exerted a negative impact on the demand side, Europe and other economies were gradually adapting to the new energy landscape, and the Organization of the Petroleum Exporting Countries (“ OPEC ”) continued to curtail production to support the oil price, while commodity prices returned to a stable range. The Group’s resource and energy businesses were affected to varying degrees, and in particular, the product sales prices were under relatively high pressure.

During the Period, international oil prices, aluminium prices and coal prices declined significantly year-on-year. Brent oil price averaged US$79.9 per barrel for the first half of the year, decreasing by approximately 25.8% year-on-year. LME aluminium ingot price averaged US$2,443.3 per tonne for the Period, decreasing by approximately 24.4% year-on-year. Coal price averaged US$249.5 per tonne for the Period, decreasing by approximately 25.5% year-on-year. The above commodity prices resulted in a year-on-year decline in the Group’s economic benefits, which nevertheless remained at a reasonable range as a result of the stable production and operation.

Operating Results and Analysis

Under this operating environment, the Group has strived for the high-quality development of the Company, focused on the three core tasks of “resolving risks, improving quality and efficiency, and optimising management”, insisted on improving the mechanism to enhance operation, persisted with reforms and empowerment to tap its potential, and the Company has achieved a safe and stable production operation during the first half of the year. Firstly, the Group took various measures to intensively carry out measures to enhance quality and efficiency and to raise the team’s sense of commitment, and it took the initiative to draw up plans and introduce new technologies and processes to solve practical issues of production. Secondly, the Group planned the long-term sustainable development of the Company with key programmes and projects, strengthened scientific and technological researches, optimised the production structure, improved the quality of operations, and ensured that production tasks would be accomplished smoothly by all means. Thirdly, the Group gradually built up a competitive advantage in management by comprehensively enhancing its management structure and standard, adhering to a pragmatic approach, emphasising on problem solving and improving work efficiency.

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In the first half of 2023, the Group achieved revenue of approximately HK$2,043.2 million, representing a year-on-year decrease of approximately 36.7%, under the impact of the decline in commodity prices and the suspension of its steel trading operations; and recorded net profit attributable to ordinary shareholders of the Company of approximately HK$383.2 million, representing a year-on-year decrease of approximately 57.1%. As of 30 June 2023, the Group’s total assets amounted to approximately HK$11,824.0 million and net assets attributable to ordinary shareholders of the Company were approximately HK$7,561.5 million. The Group continued to proactively curtail its US-dollar denominated loans, bringing down its gearing ratio to approximately 35.7% and deliver an annualised return on net assets of approximately 10.0%. The Group’s operating results remained stable and in line with expectations, and its assets position was among the best in its history.

Oil and Gas Business

During the Period, the Group’s oil and gas business division was under the impact of, among others, the ongoing tension of the Russia-Ukraine conflict and the inflation in resource countries. The Group scientifically formulated measures to increase reserve and production volume, intensified safety management and promoted application of new processes and new technologies, thus maintaining the output and economic benefits of the oil and gas business to be in a reasonable range. In the first half of 2023, the Group’s oil and gas business achieved operating output of 8,740,000 barrels and working interest output of 4,672,000 barrels, representing a decrease of approximately 1.9% and 2.8%, respectively, as compared with the same period of last year. The oil and gas business achieved revenue for the first half of 2023 of approximately HK$733.6 million, representing a decrease of approximately 23.2% year-on-year, and contributed profit attributable to ordinary shareholders of the Company of approximately HK$425.5 million.

Non-oil-and-gas Businesses

During the Period, on the basis of the termination of steel trading operations at the end of last year, the Group has actively dealt with the follow-up matters. The Group proactively promoted the engagement of the non-oil-and-gas business team in the management and shareholders’ affairs of the Portland Aluminium Smelter (“ PAS ”) and Coppabella and Moorvale coal mines joint venture projects (“ CMJV ”), facilitating the optimisation of the operation modes, increasing production capacity and reducing costs. During the Period, the Group’s non-oiland-gas business contributed profit attributable to ordinary shareholders of the Company of approximately HK$65.9 million, representing a year-on-year decrease of approximately 83.4% which was mainly attributable to the decrease in the prices of aluminium and coal.

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Outlook

New challenges and opportunities will arise in the second half of 2023. There might be demand-side recovery in light of the advanced stage of the US interest rate hike, the unclear signs of economic recession and the steady growth in the world’s major economies. China’s economic recovery would be conducive to the stability of the global supply chain and industrial chain, and there is currently no basis for further decrease in commodity prices while the active production curtailment by the OPEC is expected to support oil prices.

In 2023, the Group will continue to uphold the mindset of insisting on the bottom-line, intensify the safety risk investigation, respond to potential risks in accordance with the law and regulations and strengthen the integration of risk management, compliance and internal control. The Group will also continue to promote the application of new technologies and processes, optimize production processes and refine management measures, striving to achieve a steady increase in production. The Group will endeavor to build a management system in line with the characteristics of its business, improve work efficiency and achieve continuous improvement in corporate value. In the meantime, we will strive to explore the business opportunities in the areas of new energy and materials and search for new development directions, achieving greater returns to shareholders of the Company.

LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE

Cash and deposits

As at 30 June 2023, the Group maintained strong liquidity with undrawn bank facilities of approximately HK$1,716.0 million (31 December 2022: HK$1,815.1 million) and had cash and deposits in total amount of approximately HK$1,632.5 million (31 December 2022: HK$2,130.2 million), comprising cash and cash equivalent of approximately HK$775.2 million and deposits with a fellow subsidiary of approximately HK$857.3 million.

Borrowings

As at 30 June 2023, the Group had total debt of approximately HK$1,878.9 million (31 December 2022: HK$2,644.4 million), which comprised:

• unsecured bank borrowings of approximately HK$656.8 million;

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

• lease liabilities of approximately HK$52.1 million.

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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.

The significant decrease in the Group’s borrowings was mainly due to the prepayment of bank loans in the amount of US$85.0 million (equivalent to approximately HK$663.0 million) from its surplus cash in 2023.

On 29 December 2022, the Company entered into a facility agreement with CITIC Finance International Limited (a fellow subsidiary of the Company, “ CITIC Finance ”) in respect of an unsecured 3-year revolving loan facility of US$150.0 million (equivalent to approximately HK$1,170.0 million) (the “ A Loan ”). The proceeds of the A Loan were used for refinancing the prepayment of the remaining outstanding balance of the then existing loans in the aggregate amount of US$150 million (equivalent to approximately HK$1,170.0 million). As at 30 June 2023, the outstanding balance of the A Loan was US$150.0 million (equivalent to approximately 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 (equivalent to approximately HK$1,560.0 million) credit facility agreement with China CITIC Bank International Limited (a fellow subsidiary of the Company) (the “ B Loan ”), effective from 24 June 2021. The proceeds of the B Loan were mainly used for the prepayment of the remaining outstanding balance of the then existing loan amounting to US$200.0 million (equivalent to approximately HK$1,560.0 million). On 30 June 2022, 31 August 2022, 30 April 2023 and 30 June 2023, partial prepayments of the B Loan in the aggregate amount of US$115.0 million (equivalent to approximately HK$897.0 million) were made by utilizing the Company’s internal sources. As at 30 June 2023, the outstanding balance of the B Loan was US$85.0 million (equivalent to approximately HK$663.0 million). On 30 June 2023, the Company exercised the loan extension option to extend the repayment date to 30 June 2026.

The Group leases certain plant and machinery for its aluminium and coal mine operations under finance leases. The lease liabilities arising from these finance leases as at 30 June 2023 were HK$16.6 million (31 December 2022: HK$14.2 million).

As at 30 June 2023, the Group’s net debt to net total capital was 3.2% (31 December 2022: 6.2%). Among the Group’s total debt, approximately HK$25.0 million (31 December 2022: HK$126.9 million) was repayable within one year, including unsecured bank loan, trade finance and lease liabilities.

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Share capital

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

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.

New investment

There was no new investment concluded during the Period.

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 30 June 2023, the Group had 202 full time employees (30 June 2022: 199), including management and administrative staff.

In the first half of 2023, the remuneration of these full-time employees was approximately HK$77.0 million (30 June 2022: HK$81.7 million). In addition, the Group would share the expenses of the subcontractor remuneration of its investments as an operator (including the Seram Block, Indonesia and Hainan-Yuedong Block, China) and jointly owned investments (PAS and CMJV and certain exploration rights), involving approximately 1,800 employees in total (30 June 2022: 1,800) and amounting to approximately HK$146.2 million (30 June 2022: HK$102.8 million).

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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.

DIVIDEND

The Board does not recommend the payment of any interim dividend for the Period (six months ended 30 June 2022: Nil).

CORPORATE GOVERNANCE CODE

The Company has 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 Listing Rules throughout the Period, save and except for the following deviations from code provision C.2.1 of the Corporate Governance Code.

Code provision C.2.1 of the Corporate Governance Code stipulates that the roles of chairman and chief executive should be separate and should not be performed by the same individual.

During the period from 1 January 2023 to 18 April 2023, Mr. Sun Yufeng, a former executive director of the Company, held the roles of both the chairman of the Board (the “ Chairman ”) and chief executive officer of the Company (the “ CEO ”). Following the resignation of Mr. Sun Yufeng as an executive director of the Company, Chairman and CEO on 18 April 2023, the roles of both the Chairman and CEO have been vested in the same person, namely Mr. Hao Weibao who was appointed as an executive director of the Company on the same date.

Vesting the role of CEO in Mr. Sun, who was then an executive director of the Company and the Chairman, could facilitate and ensure that there would be a smooth and continuous execution of the Group’s business strategies and effectiveness of its operation. In respect of the vesting of both the roles of the Chairman and CEO in Mr. Hao, in view of Mr. Hao’s personal profile, extensive relevant industry knowledge and working experience in multinational corporations, the Board has confidence in vesting both roles of the Chairman and CEO in Mr. Hao and believes that it will allow for more effective planning and execution of business strategies of the Group. Therefore, the Board considers that the deviations from the code provision C.2.1 of the Corporate Governance Code will not be inappropriate. In addition, under the supervision of the Board which, apart from an executive director, comprises a non-executive director and three independent non-executive directors, the Board is appropriately structured with balance of power to provide sufficient checks to protect the interests of the Company and its shareholders.

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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 of the Company 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 Period.

PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY

Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company’s listed securities during the Period.

REVIEW OF ACCOUNTS

The audit committee has reviewed these unaudited interim results with senior management of the Company.

EVENTS OCCURRING AFTER THE REPORTING PERIOD

Save as disclosed elsewhere in this announcement, 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 July 2023 up to the date of this announcement.

By Order of the Board CITIC Resources Holdings Limited Hao Weibao Chairman

Hong Kong, 27 July 2023

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

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