Yue Yuen Industrial (551) H2 2023 earnings summary

Executive summary

• FY23 revenue fell 12.0% YoY to US$7.89bn; profit attributable to owners declined 7.3% to US$274.7mn, while gross and operating margins improved.ocument-source18

• Manufacturing faced lower volumes but delivered a five-year-high gross margin; Pou Sheng’s revenue and profit rose as retail operations improved.ocument-source12

Financial highlights

• Revenue was US$7,890.2mn, down 12.04% YoY; gross profit fell 9.91% to US$1,925.3mn, with gross margin up 0.57pp to 24.40%.ocument-source18

• Operating profit decreased 3.10% to US$403.9mn; operating margin rose 0.47pp to 5.12%. Profit attributable to owners was US$274.7mn, down 7.30%.ocument-source18

• Adjusted for non-recurring items, recurring profit attributable to owners was US$263.4mn, down 9.76% YoY; non-recurring profit attributable to owners was US$11.3mn versus US$4.5mn.ocument-source18

• Operating cash flow was US$944.7mn and free cash flow US$748.8mn; both rose 4.1% and 6.4% YoY, respectively.ocument-source5

Outlook and guidance

• Global footwear conditions are expected to remain conservative near term, although order visibility improved; moderate mainland China market recovery supported retail sales.ocument-source12

• Long-term manufacturing investment is directed toward diversifying capacity in line with brand strategies; an India capacity-expansion MOU was entered into in 2022.ocument-source12