• H1 profit down 15% to US$236m
  • Turnover up 33% to $8.8bn
  • Company says on track to meet long-term targets

Consumer goods and logistics giant Li & Fung saw its first-half profits cut by the cost of acquisitions and other investments, despite a 33% hike in group revenues.

The Hong Kong-based business said the increase reflected the continuous expansion of its market share, organic growth and acquisitions, with higher turnover coming from all three divisions: trading, logistics and distribution.

Executive deputy chairman William K Fung pointed out that the company had come through one of the worst recessions in the past three years, but had continued to gain market share and increase its top line.

He said: “While recent acquisitions and investing in the new Three-Year Plan have contributed to higher operating costs, resulting in a lower profit for the first six months of this year, we remain disciplined as always in cost management and continue to implement our cost control initiatives, the benefits of which will keep us on track for the year and we are confident of meeting our target of $1.5bn in core operating profit by 2013.”

Group president and CEO Bruce Rockowitz highlighted gains from streamlining and cost reductions, which he said were expected to have a positive impact on full-year results. “The acquisitions we made and are making are allowing us to enter or expand in new niche markets, such as costume jewelry, footwear, teenage casual clothing, boy’s and young men’s sportswear, whose growth prospects are significant,” he said.