Mar 17, 2016
HK's Li & Fung 2015 profit down, but beats forecast
Mar 17, 2016
Global exporter Li & Fung Ltd's full-year profit fell 4.6 percent but beat analysts' estimates, as growth in its logistics and vendor support services business helped overcome headwinds from global retail disruption and macro environment.
The Hong Kong-based company, which grew to prominence by making clothing and toys in Asia for Western retailers, said on Thursday its net profit for the year ended Dec. 31 fell to $421 million from $441 million a year earlier.
That compared with an average forecast of $413.2 million by 10 analysts polled by Reuters.
Li & Fung, which supplies to companies like Kohl's Corp and Wal-Mart Stores Inc, said core operating profit fell 15.2 percent to $512 million.
Revenue fell to $18.8 billion from $19.3 billion a year ago, which was the biggest company by revenue for 2014 in Asia pacific in "Textiles & Apparel" industry.
Textile companies in China are expected to post a 12-month forward revenue growth of 23 percent, the highest expected increase in the Asia-Pacific region in the "Textile & Apparel" sector, according to Thomson Reuters StarMine SmartEstimates, which emphasizes on recent forecasts by top-rated analysts.
Li & Fung has refocused on its core asset-light supply-chain business following the sale of its loss-making brand-licensing and distribution business in 2014, helping it boost free cash flow and better control operating costs.
The company, with a market value of about $5.3 billion, posted a 34 percent rise in January-June profit last year at $149 million.
Analysts were concerned about inventory build-up at retailer level as inventories grew faster than sales growth in recent quarters. They worried that Li & Fung's turnover would be affected as U.S. retailers focus on resolving high inventory levels.
$1 = 7.7606 Hong Kong dollars
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