Financial Performance - Revenue for the first half of 2023 was $4,155.0 million, a decline of 11.8% compared to $4,709.8 million in 2022[13] - Gross profit decreased to $977.7 million, down 10.8% from $1,095.7 million year-on-year[13] - Profit attributable to owners of the company was $83.6 million, a significant drop of 52.2% from $175.0 million in the previous year[13] - Basic earnings per share fell to 5.19 cents, down 52.3% from 10.87 cents in the same period last year[13] - The interim dividend was reduced to HK$0.20 per share, a decrease of 50.0% compared to HK$0.40 in the previous year[13] - The operating profit margin decreased to 3.7%, down from 4.5% in the previous year[13] - Return on equity was 4.1%, down from 8.4% year-on-year[13] - Net profit for the six months ended June 30, 2023, was $105,011 thousand, a decline of 40.5% compared to $176,474 thousand in the prior year[19] - The group reported a net profit of $38,216 thousand for the six months ended June 30, 2023, down from $47,474 thousand in the same period of 2022, representing a decrease of 19.5%[41] Revenue Breakdown - Total footwear shipments decreased to 109.8 million pairs, down 23.8% from 144.1 million pairs in the previous year[13] - Revenue from the manufacturing business, including footwear, soles, and accessories, was $2,573.9 million, a decrease of 19.3% year-on-year[66] - Revenue from retail business increased to $1,581,073 thousand for the six months ended June 30, 2023, compared to $1,520,893 thousand in the same period of 2022, reflecting a growth of 3.9%[36] - Revenue from the United States decreased to $707,210 thousand in 2023 from $1,119,946 thousand in 2022, a decline of 36.8%[38] - Revenue from Europe also decreased to $696,045 thousand in 2023 from $856,220 thousand in 2022, a decline of 18.7%[38] Cost and Expenses - Gross profit for the same period was $977,710 thousand, down 10.8% from $1,095,738 thousand year-on-year[18] - Total sales and distribution expenses fell by 12.1% to $473.4 million, maintaining a ratio of approximately 11.4% of revenue[73] - The manufacturing cost of goods sold was $2,125.7 million, a decrease of 19.2% compared to $2,632.1 million in the previous year[72] - The total employee costs for the six months ended June 30, 2023, were $1,066,381 thousand, a decrease of 8.9% from $1,170,303 thousand in the same period of 2022[42] Cash Flow and Liquidity - The net cash generated from operating activities for the six months ended June 30, 2023, was $363.589 million, a significant increase from $8.759 million in the same period last year[25] - Total cash inflow from operating activities reached $363.6 million, a substantial increase from $8.7 million in the same period last year, with free cash flow turning positive at $281.0 million compared to a negative $102.7 million previously[76] - Cash and cash equivalents at the end of the period were $907,244 thousand, up from $784,351 thousand at the end of the same period in 2022[26] - The current ratio improved to 2.3 times, compared to 2.1 times in the previous year[13] - Net leverage ratio decreased to 5.3%, down from 9.0% in the previous year[13] Investments and Future Plans - The company plans to focus on new product development and market expansion strategies to enhance future performance[19] - The company plans to invest approximately ₹23 billion (approximately $276 million) in a production base in an economic zone in India, as per the memorandum of understanding signed with the Tamil Nadu government[57] - The group is actively seeking potential opportunities and investment projects to support sustainable growth, with plans for future significant investments[81] Corporate Governance and Compliance - The company has adopted accounting principles and practices reviewed by the audit committee and management, ensuring compliance with financial reporting standards[116] - Deloitte has issued a review report on the interim financial data for the period without any reservations, confirming the accuracy of the financial statements[117] - The company maintains high standards of corporate governance, adhering to the principles outlined in the corporate governance code[117] - All directors have confirmed compliance with the established code of conduct for securities trading during the reporting period[117] Employee and Shareholder Information - As of June 30, 2023, the company employed approximately 276,800 employees, a reduction of 14.2% from about 322,500 employees on June 30, 2022[85] - Major shareholders include Baocheng with 824,143,835 shares (51.11%), Wealthplus Holdings Limited with 773,156,303 shares (47.95%), and Merrill Lynch & Co. Inc. with 99,315,703 shares (6.16%) as of June 30, 2023[107] - The total number of issued shares for the company was 5,326,179,615 shares[95] Sustainability and Social Responsibility - The company has received recognition for its sustainability efforts, ranking among the top three in the "Best Environmental, Social, and Corporate Governance" category by Institutional Investor and achieving a CDP climate change rating upgrade to "B"[64] - The company emphasizes a people-centric approach, focusing on employee health, safety, and well-being as part of its long-term sustainability strategy[64] - The company has received certification from the Fair Labor Association (FLA), becoming the first and only certified footwear supplier globally[86]
裕元集团(00551) - 2023 - 中期财报