China drives Yue Yuen prosperity
Shoe giant Yue Yuen produced 165.7 million pairs of shoes in the first half of this year – 4.1 per cent more than during the same period last year.
Increasing demand in China seems to be the driving force behind demand which has boosted profit attributable to shareholders by a healthy 18.3 per cent.
Yue Yuen designs and makes athletic and casual outdoor shoes as well as sandals, and also makes shoe components. It supplies brands such as Adidas, Asics, Converse, New Balance, Nike, Puma, Reebok, Timberland and Under Armour. It has factories in China, Indonesia, Vietnam, Mexico, the US and other areas in Asia.
The group recorded revenue of US$4.280 billion in the six months to June 30, 0.8 per cent more than during the same period in 2015. Profit attributable to shareholders rose to $248.7 million.
Revenue of athletic shoes was up by 3 per cent, but casual and outdoor shoes sales fell 9.6 per cent. The company’s retail and wholesale business of sportswear in the Greater China Region delivered a 6.8 per cent increase to $1.268 billion.
Gross profit increased by 10.5 per cent to US$1.059 billion. “When looking at the underlying business units, gross profit for the manufacturing operations involving international brands increased by 5.3 per cent to $607.9 million, with a gross profit margin of 20.2 per cent for the period. The improvement was mainly due to more stable operations during the period, while rising wages for workers, were partly offset by a reduction in material costs. [Subsidiary]Pou Sheng had a gross profit improvement of 18.2 per cent to $451.5 million due to the stronger retail demand and the fewer discounting activities.