For the six months ended June 30, 2020, Yue Yuen reported a loss of US$136.8 million, compared with a profit of US$165.9 million in the first half of 2019. The Group said it faced headwinds in the period due to the Covid-19 pandemic, starting with temporary factory shutdowns in China and Southeast Asian countries due to lockdowns and other social distancing measures imposed by local governments. Yue Yuen said this hindered the operating efficiencies of its manufacturing segment and also led to temporary supply chain disruptions. Furthermore, there were delayed shipments, reduced and cancelled order books from customers. As a response, the Hong Kong headquartered Group further adjusted its capacity allocations to strengthen its flexibility to cater to changing customer demand and closed its manufacturing facilities in Hubei, China during the first half of 2020. It also temporarily adjusted its manufacturing capacity in Southeast Asia in response to ongoing uncertainty and low visibility on customer demand.
Revenue attributed to footwear manufacturing activity in the first half, including athletic shoes, casual/outdoor shoes and sports sandals, decreased 16.7%, year-on-year, to US$2,240.8 million. The volume of shoes shipped decreased 20.4% to 129.9 million pairs and the average selling price increased 4.6% to US$17.25 per pair. Yue Yuen’s athletic footwear category accounted for 90.1% of footwear manufacturing revenue in the period, with casual/outdoor shoes accounting for 8% of footwear manufacturing revenue. When considering the Group’s consolidated revenue, athletic shoes represented the main category, accounting for 49.4% of total revenue in the first half of 2020, followed by casual/outdoor shoes, which accounted for 4.4%.
Yue Yuen also operates one of the largest and most integrated sportswear retail networks in the Greater China region through its listed subsidiary, Pou Sheng International, whose revenue decreased 15.3% to US$1,667.1 million in the first half of the year. As of June 30, 2020, Pou Sheng had 5,597 directly operated retail outlets and 3,839 stores operated by sub-distributors across the Greater China region.
