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Dear Shareholders,
I
would like to begin by extending my sincerest gratitude for your
continued support throughout the year. As we reflect on the
financial year ended 30 June 2024 (FY2024), I am pleased to
report that APAC Resources Limited achieved a remarkable
turnaround, posting a net profit attributable to shareholders of
HK$390 million, compared with a loss of HK$319 million in
FY2023. This performance was underpinned by strong results from
our Securities Trading & Investments Division, generating a
segment profit of HK$404 million, and improved outcomes from our
strategic investments.
Our strategic
investments in companies like Mount Gibson, Tanami Gold, and
Metals X have demonstrated resilience in a volatile market
environment. Mount Gibson, in particular, saw higher sales and
higher iron ore prices drive a significant increase in net cash
and investments from A$139 million to A$441 million, while
Metals X posted solid tin production with a robust balance sheet
cornerstoned by A$175m in net cash. However, our results were
tempered by non-cash impairment losses on some assets, including
Mount Gibson and Tanami Gold, reflecting the challenging
conditions in commodity markets.
As we look ahead,
we remain cautiously optimistic but recognise that the global
economic outlook presents significant challenges. In the US,
high interest rates and a slowdown in consumer spending are
raising concerns of a potential recession, which could impact
industrial activity and demand for key commodities such as oil,
copper and iron ore. Meanwhile, China’s economy, despite recent
signs of recovery, continues to face headwinds from structural
issues, particularly in the property sector, which weighs
heavily on demand for steel and related commodities. These
factors have contributed to somewhat bearish near-term commodity
price moves.
In spite of this
challenging backdrop, we believe that the long-term fundamentals
for commodities remain strong. The green energy transition,
driven by global efforts to reduce carbon emissions, is set to
bolster demand for metals such as copper, tin, and rare earths.
Additionally, continued urbanisation and infrastructure
development, particularly in emerging markets, will create
sustained demand for bulk commodities and base metals. We are
well positioned to capitalise on these trends through our
diversified portfolio and disciplined investment approach.
Our strategy remains focused on
generating long-term value for our shareholders by selectively
investing in high-quality assets that are poised to benefit from
these structural trends. While we maintain a cautious stance in
the near term due to macroeconomic uncertainties, we are
confident in the long-term growth prospects of our investments
in the resources sector.
In closing, I
want to thank our shareholders for their trust and commitment.
We will continue to navigate these complex market conditions
with prudence, while remaining focused on unlocking value from
our strategic investments. Your support remains crucial as we
embark on this journey together.
As a token of our appreciation for your
continued support, I am pleased to announce that the Board has
declared a final dividend of HK10 cents per share, reflecting
our strong financial performance in FY2024. However, we must
flag that this dividend cannot be relied on moving forward. We
are committed to delivering value to our shareholders while
maintaining a balanced and sustainable approach to capital
allocation.
Andrew Ferguson
Chief Executive Officer
25 September 2024
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