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Li & Fung announces 2013 Interim Results
- Turnover of US$9,129 million at same level as in previous year
- Core operating profit of US$223 million represents an increase of 1%
- Overall margin percentage increased from 14.5% to 15.1%
- Strong operating cash flow of US$217 million on par with 2011 operating level
- Seasonality and change in business mix has increased skewing of core operating profit towards the 2nd half of the year
- Restructuring of LF USA on track for completion by the end of 2013
Hong Kong, 13 August 2013 – Hong Kong-based Li & Fung Limited (“Li & Fung”, or “the Group”, SEHK: 494), the multinational consumer goods sourcing, logistics, and distribution group, today announced that in the first six-month period ending 30 June 2013 it achieved a turnover of US$9,129 million. This was comparable to the US$9,128 million achieved in the first half of 2012, reflecting that, increasingly, the Group’s businesses are skewed towards the second half of the year due to seasonality effects and change in the business mix towards wholesale and distribution.
Overall, results across the Group were in line with its previously stated focus on returning to 2011 operating levels by the end of 2013.
Core operating profit grew by 1% to US$223 million in the first six months of 2013. Profit attributable to shareholders was US$96 million, representing a decrease of 69%. This was mainly due to the non-cash gain of US$198 million on the write- back of contingent considerations in 2012. Excluding such non-cash gain, profit attributable to shareholders decreased by 15%. Basic earnings per share was 9 HK cents (equivalent to 1.15 US cents), a decrease of 70% compared to 30 HK cents (equivalent to 3.80 US cents) during the same period in 2012.
The Board of Directors has proposed an interim dividend of 15 HK cents (equivalent to 1.9 US cents) per share (2012 interim: 15 HK cents – equivalent to 1.9 US cents).
Mr. Bruce Rockowitz, Group President and CEO of Li & Fung Limited, said, “Our business continues to achieve satisfactory results across our three Networks as we remain focused on returning to 2011 operating levels for the Group as a whole by the end of this year. The restructuring of LF USA has been progressing well and we are on track to complete the project by the end of 2013.”
Mr. Rockowitz noted, “The global economic environment in 2013 has remained uncertain, especially in Europe, which has resulted in continued weakness in consumer spending and sentiment. However, despite the prevailing macroeconomic conditions, our core sourcing business remains solid and continues to gain market share.” He added, “It should also be noted that the tragedies in Bangladesh over the past year have placed worker safety and sustainability at the heart of standards required by global retailers and brands. These attributes and adherence to the highest supply chain standards have always been in our DNA, and they have proven to be some of our core strengths that differentiate us in the global supply chain arena.”
Dr. William K Fung, Group Chairman of Li & Fung Limited, said, “Ever since Li & Fung established three interconnected Business Networks of Trading, Logistics, and Distribution, the synergy of cross-selling has been kicking in, as shown by the strong organic growth in our Asian-focused logistics business.”
He continued, “While the proportion of our Distribution business continues to increase, and as retailers are now placing orders with shorter lead times and pushing deliveries closer to their seasons, our core operating profit will increasingly be skewed towards the second half of the year. We expect that this trend will continue.”
“We will continue refining our business model of three interconnected Business Networks before unveiling the Group’s 2014 – 2016 Three-Year Plan next year to further leverage our unparalleled expertise in supply chain management for future growth,” Dr. Fung said.
For details of Li & Fung’s 2013 interim results, please refer to the announcement posted on the Stock Exchange of Hong Kong Limited website www.hkex.com.hk
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