For the first half, on a like-for-like basis when excluding the impact of the strategic divestment of the Asian consumer and healthcare distribution business, core operating profit increased by 11.9 per cent to $170 million and profit attributable to shareholders increased by 51.3 per cent to $101 million. Turnover stabilised with a slight decrease of 2.1 per cent to $7,264 million, and total margin as a percentage of turnover increased from 11.4 to 11.5 per cent. Ongoing measures to improve operating efficiency and productivity resulted in an operating cost decrease of 4.5 per cent to $665 million. Core operating profit as a percentage of turnover increased from 2.0 to 2.3 per cent.
The company reported positive first half 2017 results, highlighting continued business progress despite challenges in the retail industry and a volatile macroeconomic environment. Initiatives launched under the new three-year plan (2017-2019) to introduce greater speed, innovation and digitalisation for the benefit of the company’s business and its customers are starting to gain traction.
"I am very pleased that our first half results reflect early success in our three-year plan initiatives. Our goal is to create the supply chain of the future to help our customers navigate the disruption the retail industry is facing. The new supply chain model we are creating is gaining traction and customers are reacting positively to new supply chain solutions such as our speed model and virtual design service. Meanwhile, our logistics business continues its multi-year, double-digit organic growth driven by e-logistics, geographic expansion and entry into new verticals such as electronics," Spencer Fung, Group CEO of Li & Fung said.
The company maintained a strong balance sheet and maximum flexibility in its capital structure, aided by recent efforts to strategically divest non-core assets, such as the Asian consumer and healthcare distribution business, as well as the issuance of perpetual securities, raising $1 billion to fund future growth. $150 million will be used to fund digitalisation efforts over the next three years.
"We are making substantial progress across many areas of the business. Our wide network of suppliers gives us the ability to quickly adjust supply chain solutions for our customers as new situations emerge. Adding to this core strength, we are singularly focused on greater speed, innovation and digitalisation. We will not only meet and exceed the expectations of our existing and new customers for a supply chain that meets changing consumer demands, but we will also employ new technologies to create an end-to-end digitalised supply chain of the future that will anticipate future requirements," said Group chairman William Fung. (RR)
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