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Profits slip 19.7% at Li & Fung

Li & Fung has reported a 19.7% drop in core operating profit to $182m (£116m) for the six months to June 30 following weak demand from Europe and the US.

Revenues for the period dipped slightly from $8.7bn (£5.5bn) to $8.6bn (£5.4bn).

Li & Fung said business was affected by the decline in the euro due to political uncertainty in Greece and the slowing Chinese economy. Sales in the US, accounting for 61% of the total, were flat.

Sales in Europe, which accounts for 16% of the total, dropped 13%. Li & Fung’s margin fell 1% during the period.

Group chairman William Fung remained bullish despite the “challenging macroeconomic conditions”.

“Turnover remained steady in the first half of 2015 and business with our core customers grew. The foundation of our business remains solid. We are happy with the continued strong growth in our logistics business.”

He added: “The ongoing trend of lower value-added production moving out of China into less developed markets complicates our customers’ supply chains, disconnecting production from raw material infrastructure located in China. We are best positioned to manage this new complexity for our customers and suppliers with our new vendor support services [announced in 2014].”

 

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