CR Construction Announces Annual Results, Gross profit increased by nearly 20% YoY

Strong points:

• Revenue from environmental operations increased by 49.8% to approximately HK$213.9 million.

• Gross profit increased by 19.3% to approximately HK$306.0 million.

• Basic earnings per share were 14.38 HK cents. The board of directors has recommended payment of a final dividend of 1.8 Hong Kong cents per share.

Financial Highlights:

HONG KONG SAR – Media OutReach Newswire – March 22, 2024 –
CR Construction Group Holdings Limited (“CR Construction” or the “Company”, together with its subsidiaries, the “Group”; stock code: 1582.HK), construction contractor in Hong Kong, announced its annual results for the financial year ended December 31, 2023 (the “Financial year under review”).

During the financial year under review, the revenue recorded by the Group was approximately HK$5,445.6 million, a decrease of approximately 15.0% from approximately HK$6,409.4 million Hong Kong dollars for the financial year ended December 31, 2022 (the “corresponding last year period”).

The Group’s net profit during the reporting year was approximately HK$72.2 million, a decrease of 1.0% compared to the corresponding period last year. During the financial year under review, the Group’s gross profit was approximately HK$306.0 million, an increase of approximately 19.3% from HK$256.5 million. of Hong Kong approximately for the corresponding period last year. The Group’s gross profit margin was approximately 5.6% and 4.0% for the financial years ended December 31, 2023 and 2022, respectively.

During the reporting year, the Group’s earnings per share were approximately HK14.38 cents (for the year ended December 31, 2022: HK14.42 cents). The board of directors has recommended payment of a final dividend of 1.8 Hong Kong cents per share.

ACTIVITY REPORT

Construction operations



Building construction work

For the financial year ended December 31, 2023, revenue generated from the construction work of the building was HK$4,703.0 million, a decrease of approximately 5.9% from approximately 4 HK$995.3 million for the financial year ended December 31, 2022.

During the reporting financial year, the gross profit of building construction works was approximately 204.4 million Hong Kong dollars, an increase of approximately 38.9% from 147. approximately HK$2 million for the corresponding period last year. Gross profit margin increased to approximately 4.3% for the year ended December 31, 2023.

Repair, Maintenance, Modification and Addition (“RMAA”)

Revenue generated from RMAA works decreased by approximately 58.4%, from approximately HK$1,271.3 million for the year ended December 31, 2022 to approximately HK$528.7 million Kong for the financial year ended December 31, 2023. The decrease is mainly attributable to existing projects which were completed during the financial year under review.

During the reporting year, the gross profit of RMAA works was approximately HK$61.7 million, a decrease of approximately HK$11.7 million compared to the profit gross profit of approximately HK$73.4 million for the year ended December 31, 2022. Gross profit margin increased to approximately 11.7% for the year ended December 31, 2023. The decrease in gross profit and increase in gross profit margin are mainly due to decrease in revenue from RMAA works projects with higher gross profit margin during the financial year under review.

Environmental Operations

For the year ended December 31, 2023, revenue generated from environmental operations was approximately HK$213.9 million, an increase of approximately 49.8% from approximately HK$142.8 million. of Hong Kong dollars for the financial year ended December 31, 2022. The increase was mainly attributable to increased revenue from new and existing projects in construction and rehabilitation services during the reporting year.

In the reporting year, the respective gross profit amounted to approximately 39.9 million Hong Kong dollars, an increase of approximately 4.0 million Hong Kong dollars compared to approximately 35. 9 million Hong Kong dollars for the year ended December 31, 2022. Gross profit margin decreased to approximately 18.7% for the year ended December 31, 2023. The increase in gross profit and the decrease in gross profit margin for the year ended December 31, 2023 are mainly due to increased revenue from construction and rehabilitation services which contributed to the decline in gross profit margin during the year under review. .

CONTRACT COSTS

The Group’s contractual costs mainly consist of subcontracting costs, material costs, direct personnel costs, general site costs and provisions for rectification work and claims. For the financial year ended December 31, 2023, the contract costs recorded by the Group were approximately HK$5,139.6 million, a decrease of 16.5% from approximately HK$6,152.9 million. of Hong Kong dollars for the financial year ended December 31, 2022.

OUTLOOK

After December 31, 2023, the Group was further awarded 4 new projects relating to 3 building construction contracts with an initial amount of approximately HK$96.4 million and 1 RMAA contract of initial amount of approximately HK$599.0 million.

The Group has also focused on technological innovation to strengthen its core competitiveness in the construction sector. The total expenditure on research and development was approximately HK$17.5 million. Our self-developed “CR Smart Site Safety System” (working name) has integrated various systems including environmental sensors, Enertainers, gate monitoring systems, Building Information Modeling (BIM), building monitoring systems. security based on artificial intelligence and an IoT system. Management personnel can comprehensively monitor the construction site in real time via mobile and web portal, ensuring the safety of construction activities. At the same time, the Group is installing smart helmets on certain construction sites, capable of detecting the heart rate, blood pressure and body temperature of site workers, as well as providing real-time location. These smart helmets also incorporate radio frequency identification (RFID) tags for matching with heavy equipment equipped with RFID sensors present on site. If workers enter unauthorized restricted areas, the alarm system will be triggered, ensuring the safety of workers.

As the digitalization of construction continues to accelerate, the Group is keeping pace with the industry by adopting more digital tools to improve construction management and safety, in line with the government’s development of smart site.

Additionally, ZCIEE collaborates with various universities for technological research. This includes research and development of rural wastewater treatment technology with Zhejiang University of Technology, as well as conducting research on fly ash smelting technology in partnership with Zhejiang Gongshang University. These research results contribute to improving the technological level of the environmental industry.

The outlook for 2024 is expected to remain stable. The Hong Kong government recently announced in the 2024-2025 Hong Kong Budget that it has canceled all demand management measures for residential properties, namely the Special Stamp Duty (SSD), the Stamp Duty Buyer’s Fee (BSD) and the New Residential Stamp Duty (NRSD). ). In addition, with ongoing projects in new development areas such as the Northern Metropolis, they should have a positive impact on the Group’s activities. However, the Group will still face challenges such as talent shortage in the construction sector. To address these challenges, the Group will strengthen the use of the labor importation program and the Top Talent Pass program for the construction sector, continuing its efforts to seek new potential construction opportunities for growth profitable. Additionally, by leveraging industry experience and expertise, the Group aims to explore suitable business opportunities in the construction sector, both locally and overseas.

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The issuer is solely responsible for the content of this announcement.