Shares of YUE YUEN IND (00551) fell more than 6% following the release of its annual results. At the time of writing, the stock was down 4.97% to HK$17.2, with a turnover of HK$22.06 million.
The company reported annual revenue of approximately $8.031 billion, a decrease of 1.8% year-on-year. Recurring profit attributable to owners of the company was about $367 million, down 3.1% compared to the previous year. Net profit attributable to owners was approximately $381 million, reflecting a 2.9% decline. Basic earnings per share were 23.76 US cents, and the board proposed a final dividend of HK$0.9 per share.
The company stated that during the period, certain manufacturing regions experienced significant deviations in order fulfillment rates and capacity utilization from average levels, leading to uneven production loads. Additionally, preliminary investments for capacity ramp-up and the allocation of tariffs starting in the second half of the year negatively impacted the operational efficiency of the manufacturing business.
Furthermore, the number of employees in the manufacturing segment increased by 4.3% year-on-year, while wages rose by a high single-digit percentage across various regions. This significantly drove up labor costs, placing further pressure on the short-term profitability of the group's manufacturing operations.
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