Mar 20, 2014
Li & Fung 2013 profit up 17 percent to $725 million
Mar 20, 2014
HONG KONG - Global exporter Li & Fung Ltd reported a 17 percent rise in full-year net profit, boosted by a strengthened foothold in Asia as the company moves to capture increasing consumer spending in the region.
The consumer goods exporter, which supplies retailers like Kohl's Corp and Wal-Mart Stores Inc with clothing, toys and other products, posted a net profit of $725 million for 2013, beating forecasts of $577.1 million, according to Thomson Reuters' Starmine SmartEstimate. That compared to a net profit of $617 million in 2012.
The Hong-Kong based group switched its strategy three years ago to become less of a middleman and more of a brand-management business as major clients sourced more goods directly from manufacturers. It also embarked on a string on mostly minor acquisitions.
As part of the new three-year plan, Li & Fung in January announced the establishment of a dedicated Vendor Support Services business unit to enhance factory and worker safety, raise standards and improve operational efficiencies in its global supply chain.
The company said core operating profit increased by 70 percent to $871 million and its core operating profit margin increased to 4.2 percent from 2.5 percent.
The company's shares, which have plunged about 60 percent from an all-time high hit in 2011, is the eighth best-performing stock on the benchmark Hang Seng index so far this year. The shares closed up 1 percent on Thursday ahead of the results announcement.
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