Yue Yuen Industrial (Holdings), the world's largest maker of sports footwear, yesterday conceded it faced a challenging year after posting lower than expected interim results.
The company blamed rising raw material prices and declining sales to the United States and Europe for a 4.4 per cent rise in net profit to US$158 million for the six months to March. Turnover rose just 1.3 per cent to $1.25 billion.
The disappointing result is far below the 12 to 15 per cent growth for the full year predicted by analysts.
'This will be a challenging year in light of rising raw material costs and continued expansion through mergers and acquisitions,' chairman Tsai Chi-neng said.
'Yue Yuen will strive to enhance its return to shareholders through improvements in production efficiency and by exploring new product categories.'
The result would have been smaller if the company excluded the disposal of investment securities, which contributed US$26.3 million to the bottom line.