On the 24th, global shoemaker Pou Cheng announced profit warnings on behalf of its subsidiary Yue Yuen and Pou Sheng International, which is listed on the Hong Kong stock market.
It is expected that Yue Yuen’s after-tax net loss will reach US$150 million to US$160 million in the first half of this year. Compared with the net income after tax of US$165 million in the same period last year, it turned from profit to loss.
Baocheng said that mainly due to the COVID-19 epidemic, which caused shipment delays and decreased consumer demand, which led to reduced customer orders and cancellation of orders, Yue Yuen’s manufacturing business in the first half of the year Operating income decreased by 17.5% from the same period last year to approximately US$2.418 billion.
In addition, mainland China and Southeast Asian countries implemented city closures and other social distancing measures after the outbreak, and some Yue Yuen factories were temporarily suspended. production, affecting operational efficiency.
Baocheng explained that due to the decline in capacity utilization and the decrease in operating income, it has caused an operating reverse leverage effect on Yue Yuen’s manufacturing business and significantly affected profitability. Facing the severe operating environment, Yue Yuen further adjusted its production capacity allocation and strengthened flexibility to cope with changing customer needs, thus optimizing its production facilities in Hubei Province, mainland China, in the first half of the year.
In addition, Yue Yuen Industrial has also temporarily reduced its manufacturing capacity in Southeast Asia in response to continued uncertainty and low visibility of customer demand. Related reasons all led to an increase in one-time expenses in the first half of the year.
In addition, Yu Yuanzi The company, Pou Sheng International, also expects the net profit after tax in the first half of the year to be approximately RMB 17 million, a significant decrease of more than 90% from the net profit after tax of approximately RMB 463 million in the same period last year, mainly due to the implementation of a number of strict epidemic prevention and control measures in the first quarter in mainland China. , adversely affecting Baosheng’s operating performance.
Pou Sheng International’s revenue in the second quarter has rebounded to approximately RMB 6.793 billion, which was the same as the same period last year. However, Pou Sheng International carried out more promotional activities to stimulate consumption, resulting in gross profit margin decline.
Baocheng emphasized that there are still major uncertainties in the new crown epidemic, which will inevitably affect manufacturing business orders and sales visibility, and will also affect Yue Yuen’s subsequent operating performance. In the future, we will continue to actively monitor the development of the situation, implement rigorous cost control measures and focus on cash flow management.