Li & Fung H1 profit plummets 69%

Shift in product mix the culprit.

Hong Kong-based global sourcing firm Li & Fung, Ltd said first-half profit attributable to shareholders fell 69% to US$96 million. It also reported a flat turnover of US$9.13 billion while underlying profit stumbled 15%.

A change in its business mix and the absence of one-off gains led to the 69% plunge in first-half profit and flat revenues. The company blamed its static turnover on the increasing seasonality of its business due to a shift in product mix towards wholesale and distribution activities.

Profit in the same period last year was boosted by one-off non-cash gains of US$198 million without which it would have fallen by only 15%.

Group president and CEO Bruce Rockowitz said the company’s business, however, continues to achieve satisfactory results across its three networks and it remains focused on returning to 2011 operating levels for the group as a whole by the end of this year.

“The global economic environment in 2013 has remained uncertain, especially in Europe, which has resulted in continued weakness in consumer spending and sentiment,” he noted.