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Yue Yuen business moving forward at a steady pace

22
Jun '09
Yue Yuen Industrial (Holdings) Limited announced its unaudited consolidated results for the six months ended 31st March, 2009. The Group's turnover and profit attributable to equity holders of the company increased year-on-year by 9.70% to US$2,545.3 million and 4.0% to US$ 217.7 million, respectively.

The Directors are pleased to declare an interim dividend of HK$ 0.34 per share, unchanged from HK$0.34 per share last year. The business environment was very difficult due to the global economic decline. However during the period under review, the Group recorded sales growth as a result of the stable demand from its brand name footwear customers, further consolidation in the footwear manufacturing industry and sales growth for the Greater China wholesale and retail operations. The total volume of shoes produced rose by 1.7% year-on-year to 129.9 million pairs, thanks to the support of our existing customers and orders from new customers.

The total number of production lines remained at 440 by the end of March 2009. The Group continues to benefit from economies of scale and the close relationship it has with its brand name customers.

The sales contributions from the wholesale and retail operations in the Greater China region continued to increase and accounted for about 18.5% of the Group's total turnover for the period under review. The revenue from the wholesale and retail operations grew by 27.0% year-on-year to US$470.6 million, which was mainly derived from the Group's 2,062 directly operated retail stores/counters, as well as the wholesale operations in the Greater China region. In addition, the Group's regional joint venture companies operated about 2,823 directly operated retail stores/counters. This year the Group has been focusing on improving operating efficiency and eliminating low yielding stores/counters. As a result, the total number of directly operated retail outlets in China under the Group and its affiliates stood at about 4,885 by the end of March 2009.

Footwear manufacturing remained the Group's major operation accounting for 72.9% of total sales, whereas soles and components accounted for 8.6% of total sales. Retail sales accounted for 18.5% of total sales, compared to 16.0% last year. With the surge in retail sales, Asia has become the largest market for the Group and the turnover from the three major markets, the USA, Europe and Asia, has become more balanced.

In the first two months of the third quarter of FY2009 (April and May of 2009), the Group's total turnover amounted to approximately US$ 861.1 million, a slight decline of 1.6 % year-on-year. Sales for footwear manufacturing should be stable on the back of consistent demand from the brand name customers. Sales for the China retail operations should be steady given the healthy consumer spending in China.


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