Analogue Grows FY2022 Revenue and Contracts Awarded by 21.0% and 41.8% Respectively
Defying Challenging Market Conditions
Bodes Well for Future Opportunities Across Segments
Hong Kong, 24 March 2023
- Total revenue reached HK$6,474.7 million, an increase of 21% year-on-year
- Contracts awarded during the year grew by 41.8% year-on-year to HK$6,822 million
- Contracts-in-hand rose to a high of HK$11,656 million
- Profit attributable to owners of the Company was HK$114.6 million
- The Board has resolved to pay a special dividend of HK4.5 cents per share as a special celebration of the 45th Anniversary of the Group
Analogue Holdings Limited (“Analogue” or the “Company”, together with its subsidiaries, collectively the “Group”) (stock code: 1977), a leading electrical and mechanical (“E&M”) engineering service provider in Hong Kong, today announced its annual results for the year ended 31 December 2022 (“the Year” or “FY2022”) with growth in revenue and contract awarded, achieving solid trading performance despite impact from global economic adversity and the lingering pandemic.
During the Year, the Group’s total revenue increased by 21.0% year-on-year to HK$6,474.7 million. Gross profit rose by 15.2% to HK$1,011.5 million, with gross profit margin at 15.6%. Profit attributable to owners of the Company for FY2022 was HK$114.6 million. If excluding the provision for litigation liabilities of HK$150 million and the impairment loss on Group’s interest in an associate of HK$75.6 million, the FY2022 profit for the year would be HK$340.2 million, representing a year-on-year increase of 8.2%.
The Group’s contracts-in-hand increased to approximately HK$11,656.3 million as at 31 December 2022, providing a strong foundation for the core businesses’ growth in the immediate term. Tendering activities remained active throughout the Year, with a total of 1,409 tenders or quotations valued at over HK$1 million each.
The Board did not recommend a payment of a second interim dividend for the year ended 31 December 2022. The Board has resolved to pay a special dividend of HK4.5 cents per share for FY2022 as a special celebration of the 45th Anniversary of the Group.
Dr. Otto Poon Lok-to, Chairman of Analogue Holdings Limited, said, “The business environment in 2022 has proved to be even more challenging than in preceding years, with the growing geopolitical tensions, the Russia-Ukraine conflict, rising inflation and interest rates contributing to global supply chain disruptions and material shipment interruptions, coupled with strict pandemic control measures in Hong Kong and Mainland China, resulting in project delays. Even so, the market demand for E&M engineering services remained strong. Backed by our three strategic pillars of ‘New Technology’, ‘New Market’, and ‘New Business Model’, we were able to sustain business growth owing to our industry-leading position, diversified business portfolio, innovative technologies and strong financial position.”
Building Services segment’s contracts-in-hand increased by 11.1% to HK$5,438 million as of 31 December 2022.The Group’s exceptional project execution capability enabled it to deliver on the order book throughout FY2022, boosting the segment revenue by 26.0% to HK$4,257 million. In particular, the recurring revenue stream from infrastructure operation, data centres, and housing programmes was fortified by the HK$415 million of new maintenance contracts secured in FY2022, up by 111.7% year-on-year. While the Group’s proprietary ATAL Building Services Prefabrication and Modularisation (“ABSPM”) construction technology was successfully completed in a number of contracts during the Year, a number of key projects were secured, including three projects related to the Three Runway System at Hong Kong International Airport with a total value of over HK$800 million. The Group also successfully completed the largest data centre project of its team in a decade, with a value of over HK$1,000 million. Ongoing operation and maintenance (“O&M”) contracts for the aforementioned data centre were also secured, worth over HK$70 million. Demand for available space in data centres in Hong Kong is expected to double over the 5 years from 2022. Highlighted by a significant market share and continued recognition from prestigious customers, the Group remains at the forefront in the field of data centres.
Environmental Engineering segment’s contracts-in-hand amounted toHK$4,791 million. During the Year, the Group won seven new contracts that underscore its expertise in project management services for quality water, wastewater, and solid waste infrastructure. Priding itself on innovation and technology advancement, the Group advanced its proprietary “Digital Twin technology” for monitoring the influent quality of incoming sewage at a sewage plant in one of its wastewater project sites, enhancing optimisation of its operational efficiency. In addition, two projects in which the Group participated received international awards, namely, O･PARK1, the first organic resource recovery centre in Hong Kong, which was awarded the National Overall Winner and FIRE Category Winner in the “Energy Globe Award 2022” for its outstanding performance in adopting innovative design to tackle climate change; and the Yuen Long Effluent Polishing Plant project of the Drainage Services Department, which was awarded the “2022 Edmund Hambly Medal” from the Institution of Civil Engineers, U.K. for its excellence in adopting innovative design to combat climate change. Furthermore, a wastewater treatment plant project in Croatia was secured during the Year, an important step in establishing the Group’s expertise in water infrastructure projects overseas. Leveraging its proven technical and project management capabilities, the Group is well-positioned for a major growth opportunity in the years to come.
Information, Communications and Building Technologies (“ICBT”) segment’s contracts-in-hand increased slightly to HK$888 million during the Year. Revenue increased by 27.6% year-on-year to HK$631 million, thanks to its strong order book. Continuing to support Hong Kong’s “Smart City” and “Smart Economy” visions, the Group provides green and intelligent building solutions that integrate a wide range of information and communications technologies with AI-enabled Digital Twin, energy and management technologies, ESG dashboard, Indoor Environment Quality Management, robotic solutions, and Smart Lampposts. The Group has been awarded another contract of the smart lampposts pilot scheme for deploying smart lampposts across Hong Kong, marking a milestone towards the city’s visionary goal of smart city development. Recognised as a key player in new technology, the Group’s comprehensive AI Energy Management Platform, Internet of Things (“IoT”) applications, Video Analytics technology, and “walkable” Photovoltaic (“PV”) were adopted in a new world-class smart office and commercial building being constructed in Hong Kong’s prestigious Central Business District. The Group’s IoT-based smart hostel solutions will also be installed at one of the largest and most prestigious universities in Hong Kong. The Group will continue to invest in digital transformation across smart building technologies and rollout innovations in a timely manner.
Lifts and Escalators segment’s contracts-in-hand amounted to HK$540 million. During the Year, Anlev Elevator Group (“Anlev”), the Group’s global brand of lifts, escalators, and moving walkways, secured strategic orders ranging from mass transportation in Brazil and hotels in Mexico, prestige government offices in Hong Kong, to orders in Mainland China, the US and other countries in Asia. The Group’s wholly owned subsidiary Anlev (UK) Limited has also taken significant steps towards establishing itself in the United Kingdom’s high rise lift market by obtaining safe contractor and construction supplier accreditations and finalising the order for the iconic and prestigious residential Victoria Riverside project in Manchester, United Kingdom. The Group will seek new distributors in the United States, Europe, Middle East and Southeast Asia to further its global expansion plan. In parallel, the Group is completing a RMB60 million expansion of its Nanjing factory facilities to increase production capacity for lifts and escalators to meet the anticipated demand and growth of its global business.
“Over the decades, the Group has grown in tandem with Hong Kong, overcoming many challenges and helping make our city a smarter and more sustainable place. To deliver many more years of success, digitalisation and embedding sustainability into every aspect of business is key. With our strong emphasis on innovation, R&D capability and ESG strategies, Analogue is well-positioned to provide solutions to support our clients in achieving their ESG goals, optimising energy consumption and reducing their carbon footprint. To enhance efficiency and prepare for the future, operating units were re-organised and new appointments as well as procedures were established. We are continuing to provide staff training, as well as enhancing staff engagement to directly tackle the industry shortage of labour. We will also make good use of technologies to boost safety, quality and productivity,” added Dr Poon.
The Group’s strong tender activity in 2022 is evidence of the high market demand and opportunities for growth that will support its further development and expansion in 2023. In the coming years, Hong Kong will continue to develop as a smart and sustainable city. The business opportunities that emerge from this process will allow the Group, supported by its proprietary technologies, to bring benefits to its customers and Hong Kong through its projects, including energy-efficient buildings, digital solutions to improve operational efficiency, and improved healthcare and other service delivery for the betterment of Hong Kong.
Dr Poon concluded, “While we are mindful of the many global and local challenges experienced over the past year, numerous developments such as the reopening of Mainland China’s borders and committed public projects spending by the Hong Kong Government present valuable opportunities to the E&M engineering sector. Having already established footholds in the United States and Europe, the latter via the United Kingdom, we will develop organically in the two regions while concurrently looking out for M&A and equity participation opportunities that can promote synergies among our businesses and create healthy income sources.”
For more details of the 2022 Annual Results, please refer to the announcement that has been filed with The Stock Exchange of Hong Kong Limited.
About Analogue Holdings Limited
Established in 1977, Analogue Holdings Limited is a leading electrical and mechanical (“E&M”) engineering service provider headquartered in Hong Kong, with operations in Macau, Mainland China, the United States and the United Kingdom. Serving a wide spectrum of customers from public and private sectors, the Group provides multi-disciplinary and comprehensive E&M engineering and technology services in four major segments, including Building Services, Environmental Engineering, Information, Communications and Building Technologies (“ICBT”) and Lifts & Escalators.
The Group also manufactures and sells Anlev lifts and escalators internationally and has entered into an alliance with Transel Elevator & Electric Inc. (“TEI”), one of the largest independent lifts and escalators companies in New York, the United States. The Group’s associate partner, Nanjing Canatal Data Centre Environmental Tech Company Limited (603912.SS), is specialised in manufacturing of precision air conditioners.