Li & Fung focuses on streamlining operating costs in H2

16 Aug '11

3 min read

Hong Kong-based Li & Fung Limited, the multinational consumer goods export and logistics group, announced strong turnover growth for the first six months of 2011. The increase reflects the continuing expansion of its market share through both organic growth and acquisitions.

For the first six months ending 30 June 2011, the Group's turnover was US$8,798 million, 33% higher than same period in 2010. Growth impetus came from all three business Networks of Trading, Logistics and Distribution. Compared to the same period last year, turnover growth from Trading Network and Distribution Network was 18% and 85% respectively.

Core Operating Profit down by 16% to US$282 million, due to higher operating expenses arising from investing in the Group's new Three-Year Plan and recent acquisitions.

The Group reported profit attributable to shareholders of US$236 million, a decrease of 15% over the same period in 2010. Basic earnings per share was 2.92 US cents, a decrease of 21% compared to 3.69 US cents during the same period in 2010.

The Board of Directors has proposed an interim dividend of 19 HK cents per share (2010 interim: 19 HK cents, adjusted for the effect of Share Subdivision in May 2011).

Mr. William K Fung, Executive Deputy Chairman of Li & Fung Limited said, “During the past three years we have come through one of the worst recessions in our export markets but we continued to gain market share and increased our top line through acquisitions and from organic growth”.

“While recent acquisitions and investing in the new Three-Year Plan have contributed to higher operating costs, resulting in a lower profit for the first six months of this year, we remain disciplined as always in cost management and continue to implement our cost control initiatives, the benefits of which will keep us on track for the year and we are confident of meeting our target of US$1.5 billion in core operating profit by 2013.”

Mr. Bruce Rockowitz, Group President and CEO of Li & Fung Limited, said, “We expect the gains from streamlining and cost reductions to have a positive impact on our full year results.”

“Furthermore, the integration of our three business Networks is progressing well, and we are realizing encouraging results from cross-selling opportunities,” he observed.

“The acquisitions we made and are making are allowing us to enter or expand in new niche markets such as costume jewelry, footwear, teenage casual clothing, boy's and young men's sportswear whose growth prospects are significant,” Mr. Rockowitz added.

Li & Fung Limited, the Hong Kong-headquartered multinational group, is recognized as the world's leader in consumer goods design, development, sourcing and distribution. It manages the supply chain for retailers and brands worldwide from about 240 offices and distribution centers in more than 40 economies spanning across the Americas, Europe, Africa and Asia.

Li & Fung Limited

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