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Li & Fung reports 13.3% increase in operating profit

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Hong Kong-based sourcing group, Li & Fung, has announced positive financial results for fiscal 2017 ended December 31. During the period under review, it reported a13.3 per cent increase in the core operating profit to US $ 356 million.

On a like-for-like basis, the supply chain leader reported a 5.8 per cent decline in operating costs which exclude the impact of the divestment of the Asia consumer and healthcare distribution business in 2016, it said in the press release issued.

Further, operating costs decreased by 12.4 per cent to US $1,030 million on a reported basis. Sustained efforts to enhance operating efficiency and productivity through the use of technology and process improvement were prime reason behind the plunge, the company said.

Enhanced service offerings by the company helped it to report a stabilised turnover with a decrease of 4.6 per cent to US $ 13.5 billion during the year under review.

On a reported basis, the  group turnover decreased by 8.3 per cent. The rate of decline was lower than that in 2016 as the drop in the turnover of its supply chain solutions business further narrowed.

Supply Chain Solutions business, Logistics business and Onshore Wholesale business in the Americas, Europe, and Asia, accounted for 81, 8 and 11 per cent of Group turnover, respectively.

Notably, in the beginning of 2017, the company reorganised its business into two segments, namely Services and Products, to support new strategy.

The company stated that its plans to further simplify the operations and focus on the core supply chain solutions business which is in turn supporting its customers to remodify their business setup and counter disruptions in other markets.

“We are on track to deliver a fully integrated digital platform that connects our suppliers and customers with end-to-end visibility to enhance decision making,” adds William Fung, Chairman of the group.