Asia drags down Li & Fung turnover
In this article (5)
Li & Fung turnover and core operating profit have been hit by a tough retail environment last year, particularly in Asia.
However, its resilient performance and cost control saw it improve total margin percentage, while logistics continued double-digit growth
Li & Fung turnover in Asia dropped by 36.1 per cent year on year to US$1.3 billion. Excluding the impact of the strategic divestment of the Asia consumer and healthcare distribution business last year, turnover in Asia fell by 13.3 per cent to $700 million, impacted by the muted economic environment.
Turnover in rest of world fell by 20.2 per cent to $1.1 billion, primarily because of soft consumer demand. Overall, turnover was down by 11 per cent to $16.8 billion, and excluding the Asia divestment the fall was 8.3 per cent.
Like-for-like operating profit fell 17.7 per cent to $408 million, but Li & Fung says it is making “sustained efforts” to improve operating efficiency and productivity through technology and streamlining of the cost base.
Total margin fell by 10.4 per cent to $1.9 billion, primarily because of the decline in total turnover. Excluding the Asia divestment, the decrease was 6 per cent.
Questions & Answers
Q.How much did Li & Fung's total turnover decrease by last year, and what was the main reason for this drop?
How much did Li & Fung's total turnover decrease by last year, and what was the main reason for this drop?
Overall turnover for Li & Fung was down by 11 per cent to $16.8 billion. This decline was primarily attributed to a tough retail environment, particularly in Asia, and soft consumer demand in the rest of the world.
Q.What was the impact of the strategic divestment in Asia on the company's turnover figures?
What was the impact of the strategic divestment in Asia on the company's turnover figures?
Excluding the Asia consumer and healthcare distribution business divestment, turnover in Asia fell by 13.3 per cent, and overall turnover decreased by 8.3 per cent. This indicates the divestment significantly influenced the reported figures.
Q.What actions is Li & Fung taking to improve its operating performance despite the challenging market?
What actions is Li & Fung taking to improve its operating performance despite the challenging market?
Li & Fung is making 'sustained efforts' to enhance operating efficiency and productivity. This is being achieved through the implementation of technology and by streamlining its cost base, aiming to mitigate the impact of the market.
Q.Which specific business segment showed positive growth despite the overall downturn?
Which specific business segment showed positive growth despite the overall downturn?
Despite the challenging retail environment and declines in other areas, the logistics segment within Li & Fung continued to demonstrate double-digit growth. This was a resilient performance highlight for the company last year.
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