Sharp drop in profit for Yue Yuen

Hong Kong
Published:  16 November, 2018

Unaudited consolidated results for the nine months ending September 30, 2018, show that profit attributable to owners of the Company declined -48.3%, year-on-year.

The Hong Kong headquartered footwear manufacturing group recorded revenue of US$7,151.9 million in the first nine months of the year, representing a +6.5% increase against US$6,718.0 million recorded in the same period in 2017. However, Yue Yuen’s profit declined -48.3% to US$204.6 million (9M 2017: US$395.9 million), mainly attributed to operating deleverage within the manufacturing business, a reduction of the non-recurring gain for the period, as well as higher finance costs.

During the period, a non-recurring loss totalling US$31.6 million was recognised, which included a fair value loss of US$34.3 million on derivative financial instruments that was partly offset by one-off gains arising from the disposal of subsidiaries, according to Yue Yuen. Excluding all items of non-recurring in nature, the recurring profit attributable to owners of the Company amounted to US$236.2 million (-37%).

Total revenue attributable to footwear manufacturing activities, including athletic shoes, casual/outdoor shoes and sports sandals, is reported to have declined -2.8% to US$3,929.9 million, while the volume of shoes produced and average selling price per pair decreased -0.9% to 236.5 million pairs and -1.9% to US$16.62 per pair, respectively, year-on-year. As a result, the total revenue with respect to the manufacturing business, including footwear, as well as soles and components among others, and the apparel wholesale business during the period amounted to US$4,604.5 million, down -1.7%.

Revenue attributable to Pou Sheng, the Group’s retail subsidiary, increased +25.4% in the period to US$2,547.4 million, against US$2,031.5 million in the same period of 2017.