OneConnect Announces Second Quarter and First Half 2024 Unaudited Financial Results
Net
Margin
of
Continuing
Operations to
Shareholders
Improved to -2.4%
Second Quarter 2024 Financial Highlights
- Revenue from continuing operations was
RMB692 million , compared toRMB939 million for the same period of the prior year. - Gross margin of continuing operations was 36.6%, compared to 37.5% for the same period of the prior year; non-IFRS gross margin of continuing operations was 38.8%, compared to 40.0% for the same period of the prior year.
- Net loss from continuing operations attributable to shareholders was
RMB17 million , compared toRMB41 million for the same period of the prior year. Net margin of continuing operations to shareholders improved to -2.4% from -4.4% for the same period last year. - Net loss from continuing operations per basic and diluted ADS was
RMB-0.46 , compared toRMB-1.13 during the same period last year. - Net profit from continuing and discontinued operations attributable to shareholders was
RMB243 million , primarily due to the gains derived from the disposal of virtual banking business, compared to net loss ofRMB82 million for the same period of the prior year. Net margin of continuing and discontinued operations to shareholders improved by 43.8ppt to 35.1% compared to -8.7% during the same period last year. - Earnings from continuing and discontinued operations per basic and diluted ADS was
RMB6.70 , compared toRMB-2.25 during the same period last year.
[1] As previously reported, the Company completed the disposal of its virtual bank business (the "discontinued operations") to Lufax Holding Ltd ("Lufax") for a consideration of
In RMB'000, except percentages |
Three Months Ended |
|
Six Months Ended |
|
||
|
|
YoY |
|
YoY |
||
|
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
|
Revenue |
|
|
|
|
|
|
Revenue from |
401,084 |
580,795 |
-30.9 % |
822,880 |
1,117,649 |
-26.4 % |
Revenue from Lufax[1] |
54,463 |
73,142 |
-25.5 % |
112,719 |
144,499 |
-22.0 % |
Revenue from third-party customers[2] |
236,952 |
285,222 |
-16.9 % |
480,170 |
570,837 |
-15.9 % |
Total |
692,499 |
939,159 |
-26.3 % |
1,415,769 |
1,832,985 |
-22.8 % |
Gross profit |
253,379 |
352,385 |
|
525,782 |
687,042 |
|
Gross margin |
36.6 % |
37.5 % |
|
37.1 % |
37.5 % |
|
Non-IFRS gross margin |
38.8 % |
40.0 % |
|
39.4 % |
40.1 % |
|
Operating loss |
(39,154) |
(38,226) |
|
(105,502) |
(116,368) |
|
Operating margin |
-5.7 % |
-4.1 % |
|
-7.5 % |
-6.3 % |
|
|
|
|
|
|
|
|
Net loss from continuing operations |
(16,789) |
(41,170) |
|
(70,485) |
(113,649) |
|
Net margin of continuing operations to |
-2.4 % |
-4.4 % |
|
-5.0 % |
-6.2 % |
|
Net loss from continuing operations per |
(0.46) |
(1.13) |
|
(1.94) |
(3.13) |
|
Net profit/(loss) from continuing and |
243,348 |
(81,592) |
|
139,014 |
(190,465) |
|
Net margin of continuing and |
35.1 % |
-8.7 % |
|
9.8 % |
-10.4 % |
|
Earnings/(loss) from continuing and |
6.70 |
(2.25) |
|
3.83 |
(5.24) |
|
[1] Reference is made to announcements made by Lufax dated |
[2] Third-party customers refer to each customer with revenue contribution of less than 5% of the Company's total revenue in the relevant period. These customers are a key focus of the Company's diversification strategy. |
[3] In RMB. Each ADS represents 30 ordinary shares. |
Chairman, CEO and CFO Comments
Mr. Chongfeng Shen, Chairman of the Board and Chief Executive Officer, commented, "During the first half of 2024, we achieved encouraging results in overseas markets and improved our bottom-line despite the year-over-year decrease in revenue. Throughout this time, we focused on our strategic goal of achieving mid-term profitability by upgrading and integrating products, deepening customer engagement, and expanding our presence in overseas markets. Consequently, our high-value products, protected by high barriers to entry, gained broader appeal from customers, reflected in the 14.8% year-over-year increase in revenue from third-party overseas customers in our continuing operations during the first half of the year. We completed the disposal of our non-core virtual banking business to focus on our core businesses, and continued to implement disciplined expense control measures. As a result, we recorded net profit from continuing operations and discontinued operations during the first half of the year while further cost reductions continued to narrow our loss from continuing operations."
"Despite our recent decision to gradually phase out the FinCloud business starting in
Mr. Yongtao Luo, Chief Financial Officer, commented, "Since the start of this year, our focus on improving resource and capital allocation efficiency has generated solid results. We completed the sale of our virtual banking business to refocus resources on our core businesses, resulting in a one-time gain recognized from the disposal in the amount of
Revenue from Continuing Operations Breakdown
|
Three Months Ended |
|
Six Months Ended |
|
||
In RMB'000, except percentages |
|
YoY |
|
YoY |
||
|
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
Implementation |
168,627 |
233,089 |
-27.7 % |
326,086 |
443,023 |
-26.4 % |
Transaction-based and support revenue |
|
|
|
|
|
|
Business origination services |
9,940 |
32,081 |
-69.0 % |
22,775 |
81,127 |
-71.9 % |
Risk management services |
61,031 |
72,574 |
-15.9 % |
126,514 |
150,317 |
-15.8 % |
Operation support services |
131,329 |
249,040 |
-47.3 % |
265,391 |
471,585 |
-43.7 % |
Cloud services platform |
289,109 |
322,373 |
-10.3 % |
607,416 |
614,620 |
-1.2 % |
Post-implementation support services |
14,427 |
13,308 |
8.4 % |
29,348 |
25,649 |
14.4 % |
Others |
18,036 |
16,694 |
8.0 % |
38,239 |
46,664 |
-18.1 % |
Sub-total for transaction-based and support |
523,872 |
706,070 |
-25.8 % |
1,089,683 |
1,389,962 |
-21.6 % |
Total Revenue from Continuing Operations |
692,499 |
939,159 |
-26.3 % |
1,415,769 |
1,832,985 |
-22.8 % |
Revenue from continuing operations in the second quarter of 2024 decreased by 26.3% to
|
Three Months Ended |
|
Six Months Ended |
|
||
In RMB'000, except percentages |
|
YoY |
|
YoY |
||
|
2024 |
2023 |
|
2024 |
2023 |
|
|
|
|
|
|
|
|
Digital Banking segment |
100,279 |
235,332 |
-57.4 % |
261,832 |
494,069 |
-47.0 % |
|
127,091 |
190,587 |
-33.3 % |
258,977 |
367,244 |
-29.5 % |
Gamma Platform segment |
465,129 |
513,240 |
-9.4 % |
894,960 |
971,671 |
-7.9 % |
Total
Revenue from Continuing |
692,499 |
939,159 |
-26.3 % |
1,415,769 |
1,832,985 |
-22.8 % |
Revenue from Gamma Platform segment in the second quarter of 2024 decreased by 9.4% to
Second Quarter 2024 Financial Results
Revenue from Continuing Operations
Revenue from continuing operations in the second quarter of 2024 decreased by 26.3% to
Cost of Revenue from Continuing Operations
Cost of revenue from continuing operations in the second quarter of 2024 decreased by 25.2% to
Gross Profit from Continuing Operations
Gross profit from continuing operations in the second quarter of 2024 decreased to
Operating Loss and Expenses from Continuing Operations
Total operating expenses from continuing operations in the second quarter of 2024 decreased to
-
Research and Development expenses
from continuing operations in the second quarter of 2024 decreased to
RMB186 million fromRMB252 million in the prior year, mainly due to a decrease in personnel costs and the ROI-oriented approach we are taking to manage research and development projects. As a percentage of revenue, research and development expenses from continuing operations slightly increased to 26.9% from 26.8% in the prior year. -
Sales and Marketing expenses
from continuing operations in the second quarter of 2024 decreased to
RMB44 million fromRMB57 million in the prior year, mainly due to a decrease in personnel costs as we enhance sales efficiency and capabilities. As a percentage of revenue, sales and marketing expenses from continuing operations were 6.4%, compared to 6.1% in the prior year. -
General and Administrative expenses from continuing operations in the second quarter of 2024 decreased to
RMB66 million fromRMB93 million in the prior year. As a percentage of revenue, general and administrative expenses from continuing operations decreased to 9.5% from 9.9% during the same period last year, primarily due to a decrease in personnel costs.
Operating loss from continuing operations in the second quarter of 2024 increased slightly to
Net Loss from Continuing Operations Attributable to Shareholders
Net loss from continuing operations attributable to OneConnect's shareholders in the second quarter of 2024 decreased by 59.2% to
Net Profit from Continuing and Discontinued Operations Attributable to Shareholders
Net profit from continuing and discontinued operations attributable to OneConnect's shareholders in the second quarter of 2024 was
Cash Flow
For the second quarter of 2024, net cash used in operating activities was
Conference Call Information
Date/Time |
|
|
|
Online registration |
https://www.netroadshow.com/events/login?show=1b2c1d6f&confId=69140 |
The financial results and an archived transcript will be available at OneConnect's investor relations website at ir.ocft.com.
About OneConnect
The Company has established long-term cooperation relationships with financial institutions to address their needs of digital transformation. The Company has also expanded its services to other participants in the value chain to support the digital transformation of financial services eco-system. In addition, the Company has successfully exported its technology solutions to overseas financial institutions.
For more information, please visit ir.ocft.com.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the
Use of Unaudited Non-IFRS Financial Measures
The unaudited consolidated financial information is prepared in accordance with IFRS Accounting Standards ("IFRS") issued by the
Contacts
Investor Relations:
OCFT IR Team
OCFT_IR@ocft.com
Media Relations:
OCFT PR Team
pub_jryztppxcb@pingan.com.cn
ONECONNECT |
||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |
||||
(Unaudited) |
||||
|
||||
|
Three Months Ended June 30 |
Six Months Ended June 30 |
||
|
2024 |
2023 |
2024 |
2023 |
|
RMB'000 |
RMB'000 |
RMB'000 |
RMB'000 |
Continuing operations |
|
|
|
|
Revenue |
692,499 |
939,159 |
1,415,769 |
1,832,985 |
Cost of revenue |
(439,120) |
(586,774) |
(889,987) |
(1,145,943) |
Gross profit |
253,379 |
352,385 |
525,782 |
687,042 |
Research and development expenses |
(186,457) |
(251,893) |
(399,640) |
(528,039) |
Selling and marketing expenses |
(44,068) |
(56,828) |
(92,568) |
(116,030) |
General and administrative expenses |
(65,507) |
(92,904) |
(146,027) |
(173,117) |
Net impairment losses on financial and |
(9,543) |
(8,739) |
(23,233) |
(32,804) |
Other income, gains or loss–net |
13,042 |
19,753 |
30,184 |
46,580 |
Operating loss |
(39,154) |
(38,226) |
(105,502) |
(116,368) |
Finance income |
19,346 |
5,726 |
29,686 |
11,516 |
Finance costs |
(3,710) |
(5,312) |
(7,988) |
(11,453) |
Finance income - net |
15,636 |
414 |
21,698 |
63 |
Share of gain of associate and joint venture - |
- |
- |
- |
7,157 |
Impairment charges on associate |
- |
- |
- |
(7,157) |
Loss before income tax |
(23,518) |
(37,812) |
(83,804) |
(116,305) |
Income tax benefit/(expense) |
2,435 |
(7,274) |
2,346 |
(5,402) |
Loss from continuing operations |
(21,083) |
(45,086) |
(81,458) |
(121,707) |
|
|
|
|
|
Profit/(loss) from discontinued operations |
260,137 |
(40,422) |
209,499 |
(76,816) |
Profit/(loss) for the period |
239,054 |
(85,508) |
128,041 |
(198,523) |
|
|
|
|
|
Profit/(loss) attributable to: |
|
|
|
|
- Owners of the Company |
243,348 |
(81,592) |
139,014 |
(190,465) |
- Non-controlling interests |
(4,294) |
(3,916) |
(10,973) |
(8,058) |
|
239,054 |
(85,508) |
128,041 |
(198,523) |
|
|
|
|
|
Other comprehensive income/(loss), net of |
|
|
|
|
Items that may be subsequently reclassified to |
|
|
|
|
- Foreign currency translation differences |
(3,979) |
(1,660) |
(2,645) |
(4,863) |
- Exchange differences on translation of |
- |
33,884 |
177 |
22,233 |
- Changes in the fair value of debt instruments |
- |
4,781 |
6,056 |
1,057 |
- Disposal of subsidiaries |
18,237 |
- |
18,237 |
- |
Item that will not be reclassified subsequently |
|
|
|
|
- Foreign currency translation differences |
11,866 |
74,846 |
13,808 |
44,191 |
|
|
|
|
|
Other comprehensive income for the period, |
26,124 |
11,851 |
35,633 |
62,618 |
|
|
|
|
|
Total comprehensive income/(loss) for the |
265,178 |
26,343 |
163,674 |
(135,905) |
|
|
|
|
|
Total comprehensive income/(loss) |
|
|
|
|
- Owners of the Company |
269,472 |
30,259 |
174,647 |
(127,847) |
- Non-controlling interests |
(4,294) |
(3,916) |
(10,973) |
(8,058) |
|
265,178 |
26,343 |
163,674 |
(135,905) |
|
|
|
|
|
Total comprehensive income/(loss) |
|
|
|
|
- Continuing operations |
9,335 |
32,016 |
(41,085) |
(74,321) |
- Discontinued operations |
260,137 |
(1,757) |
215,732 |
(53,526) |
|
269,472 |
30,259 |
174,647 |
(127,847) |
|
|
|
|
|
Loss from continuing operations per share |
|
|
|
|
(expressed in RMB per share) |
|
|
|
|
- Basic and diluted |
(0.02) |
(0.04) |
(0.06) |
(0.10) |
Loss from continuing operations per ADS |
|
|
|
|
(expressed in RMB per share) |
|
|
|
|
- Basic and diluted |
(0.46) |
(1.13) |
(1.94) |
(3.13) |
|
|
|
|
|
Earnings/(loss) per share attributable to the |
|
|
|
|
(expressed in RMB per share) |
|
|
|
|
- Basic and diluted |
0.23 |
(0.07) |
0.13 |
(0.17) |
Earnings/(loss) per ADS attributable to the |
|
|
|
|
(expressed in RMB per share) |
|
|
|
|
- Basic and diluted |
6.70 |
(2.25) |
3.83 |
(5.24) |
ONECONNECT |
||
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS |
||
(Unaudited) |
||
|
||
|
|
|
|
2024 |
2023 |
|
RMB'000 |
RMB'000 |
ASSETS |
|
|
Non–current assets |
|
|
Property and equipment |
65,832 |
85,076 |
Intangible assets |
340,483 |
471,371 |
Deferred tax assets |
768,398 |
768,276 |
Financial assets measured at fair value through |
3,204 |
1,372,685 |
Restricted cash and time deposits over three |
200 |
5,319 |
Prepayments and other receivables |
6,962 |
6,663 |
Total non-current assets |
1,185,079 |
2,709,390 |
|
|
|
Current assets |
|
|
Trade receivables |
930,258 |
710,669 |
Contract assets |
79,941 |
95,825 |
Prepayments and other receivables |
898,296 |
905,691 |
Financial assets measured at amortized cost from |
- |
3,081 |
Financial assets measured at fair value through |
- |
853,453 |
Financial assets measured at fair value through |
640,431 |
925,204 |
Derivative financial assets |
52,750 |
38,008 |
Restricted cash and time deposits over three |
469,405 |
447,564 |
Cash and cash equivalents |
1,438,886 |
1,379,473 |
Total current assets |
4,509,967 |
5,358,968 |
|
|
|
Total assets |
5,695,046 |
8,068,358 |
|
|
|
EQUITY AND LIABILITIES |
|
|
EQUITY |
|
|
Share capital |
78 |
78 |
Shares held for share option scheme |
(149,544) |
(149,544) |
Other reserves |
11,027,689 |
10,989,851 |
Accumulated losses |
(7,734,600) |
(7,873,614) |
Equity attributable to equity owners of the |
3,143,623 |
2,966,771 |
Non-controlling interests |
(29,952) |
(18,979) |
Total equity |
3,113,671 |
2,947,792 |
|
|
|
LIABILITIES |
|
|
Non–current liabilities |
|
|
Trade and other payables |
14,379 |
28,283 |
Contract liabilities |
12,901 |
17,126 |
Deferred tax liabilities |
520 |
2,079 |
Total non–current liabilities |
27,800 |
47,488 |
|
|
|
Current liabilities |
|
|
Trade and other payables |
2,008,719 |
1,981,288 |
Payroll and welfare payables |
267,881 |
385,908 |
Contract liabilities |
134,192 |
138,563 |
Short-term borrowings |
142,783 |
251,732 |
Customer deposits |
- |
2,261,214 |
Other financial liabilities from virtual bank |
- |
54,373 |
Total current liabilities |
2,553,575 |
5,073,078 |
|
|
|
Total liabilities |
2,581,375 |
5,120,566 |
|
|
|
Total equity and liabilities |
5,695,046 |
8,068,358 |
|
|
|
ONECONNECT |
||||
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||
(Unaudited) |
||||
|
||||
|
Three Months Ended |
Six Months Ended June 30 |
||
|
2024 |
2023 |
2024 |
2023 |
|
RMB'000 |
RMB'000 |
RMB'000 |
RMB'000 |
Net cash used in operating |
(182,757) |
(19,650) |
(297,993) |
(632,914) |
Net cash generated
from/(used in)
|
224,450 |
(108,947) |
480,298 |
298,119 |
Net cash used in financing |
(28,821) |
(44,480) |
(129,792) |
(88,901) |
Net
increase/(decrease)
in cash and |
12,872 |
(173,077) |
52,513 |
(423,696) |
Cash and cash equivalents at the |
1,420,891 |
1,420,891 |
1,379,473 |
1,907,776 |
Effects of exchange rate changes |
5,123 |
46,159 |
6,900 |
35,433 |
Cash and cash equivalents at the |
1,438,886 |
1,519,513 |
1,438,886 |
1,519,513 |
ONECONNECT |
||||
RECONCILIATION OF IFRS AND NON-IFRS RESULTS |
||||
FOR CONTINUING OPERATIONS |
||||
(Unaudited) |
||||
|
||||
|
Three Months Ended |
Six Months Ended |
||
|
2024 |
2023 |
2024 |
2023 |
|
RMB'000 |
RMB'000 |
RMB'000 |
RMB'000 |
Gross profit from continuing operations |
253,379 |
352,385 |
525,782 |
687,042 |
Gross m argin of c ontinuing o perations |
36.6 % |
37.5 % |
37.1 % |
37.5 % |
Non-IFRS adjustment |
|
|
|
|
Amortization of intangible assets recognized in cost |
13,686 |
21,374 |
29,228 |
43,583 |
Depreciation of property and equipment recognized |
1,056 |
1,469 |
2,208 |
2,823 |
Share-based compensation expenses recognized in |
334 |
894 |
562 |
1,330 |
Non-IFRS g ross profit from continuing operations |
268,455 |
376,122 |
557,780 |
734,778 |
Non-IFRS g ross m argin of c ontinuing o perations |
38.8 % |
40.0 % |
39.4 % |
40.1 % |
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