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H1 operating profit at Li & Fung slips 9%
23
Aug '14
In what global apparel and fashion accessories supply chain specialist Li & Fung termed as mixed economic landscape, operating profit declined 9 percent in the interim results for first half of 2014.

Li & Fung said a mixed economic landscape and investments in overall infrastructure to improve efficiencies for the longer-term, including the recently established Vendor Support Services business unit, impacted core operating profit which decreased by 9 percent to US$ 227 million.

Total turnover of the Trading division at Li & Fung, which supplies to retailers like Walmart and Target, rose 3 percent year-on-year to US$ 8,710 million, while revenues at the Logistics business surged 44 percent, from the prior year period.

Profit attributable to shareholders, excluding loss of discontinued operations shot up by 45 percent from a year earlier, to US$ 210 million in the first six months of 2014, which also includes a non-cash gain of US$ 98 million on the write-backs of contingent considerations.

Excluding loss of discontinued operations in the January to June 2014 period, basic earnings per share too skyrocketed 45 percent year-on-year to US$ 0.25 from US$ 0.17 from same period in 2013.

“The successful spin-off of Global Brands has paved the way for Li & Fung to focus on our core strengths of trading and logistics, as the world’s leading global supply chain manager,” said William Fung, Chairman of Li & Fung.

He added, “As in previous three year plans, the first year in our plan is always a period of investment. 2014 is also an important period of transition. We have reorganized our business, strengthened our management team and set the stage for our next phase of organic growth.”

Spencer Fung, CEO said, “Our trading business continues to be solid and our logistics business delivered robust organic growth, particularly throughout Asia, through new business wins and successful cross-selling opportunities.”

The Board of Directors at Li & Fung approved an interim dividend of US$ 0.17 per share.

Fibre2fashion News Desk - India

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