Yue Yuen issues profit warning
The Hong Kong-based manufacturing group has told its shareholders that it expects its profit attributable to owners to fall by no more than 25% as compared to 100 million USD in 2024
The decrease was attributed to “the negative impact on the gross profit margin due to an increase in unit costs for footwear manufacturing, amid a volatile operating environment led by a complex and dynamic global economic landscape”.
On the one hand, the company pointed out that its production efficiency declined due to uneven output across plants and underperformance of new lines and equipment – as a result, targets weren’t met, and a reliance on overtime and related costs persisted.
On the other hand, the increase in the number of employees in the manufacturing business, combined with rising wages in various regions, has resulted in higher labour costs, which have not been offset by reduced production efficiency.
This guidance is based on a preliminary review of Yue Yuen’s unaudited interim financial statements for the first quarter of the year, and actual results may be adjusted following further review.
Image Credits: kimi lee on Unsplash
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