Mar 24, 2010
Li & Fung second half profit up 67 percent, lags forecast
Mar 24, 2010
HONG KONG, March 24 (Reuters) - Consumer goods exporter Li & Fung Ltd (0494.HK) on Wednesday 24 March posted a 67 percent rise in profit for the second half of 2009, lagging analysts' forecasts, as it aggressively slashed expenses in a group-wide cost-saving programme.
Li & Fung Ltd
The company, which manages supply chains for retailers including Wal-Mart Stores Inc (WMT.N) and Target Corp (TGT.N), posted a net profit of HK$1.97 billion ($253 million) for the July-December period, against HK$1.18 billion in the same period in 2008.
The profit lagged a mean forecast of HK$2.307 billion for the second half of 2009, according to analysts polled by Thomson Reuters I/B/E/S.
Analysts said acquisitions would be Li & Fung's growth driver in 2010, but some worried the company may not be able to meet growth targets set in its three-year plan which ends this year.
Li & Fung, which earlier this year secured a sourcing agreement to supply Wal-Mart (WMT.N) and had planned to buy Visage Group in Britain to expand its European presence, aims to post annual turnover of $20 billion and a core operating profit of $1 billion under its current three-year plan for 2008-2010.
Shares of Li & Fung rose 55 percent in the second half of 2009, outperforming a 19 percent rise in the broader market .HSI. The shares are up another 29.8 percent so far this year, outpacing the broader market's .HSI 3.6 percent decline. (US$1=HK$7.76 yuan)
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