• FY profit declines 20.1% to $342.7m
  • Turnover up 5.7% to $8.01bn
  • Company to up investment in technologies and materials

Yue Yuen Industrial Holdings, the world's largest sports shoe maker, has revealed it will increase investment in new technologies and innovative materials to improve production efficiency, after reporting a double-digit decline in annual net profit.

The company, which supplies sporting goods brands Nike and Adidas, said its profit amounted to US$342.7m for the year to 31 December, compared to $429m in the same period of the prior year.

Turnover rose 5.7% to $8.01bn from $7.58bn the year before. Its retail network in Greater China region, which sells international brand name footwear and apparel either directly to consumers or to sub-distributors on a wholesale basis, booked a 14.4% increase to $1.98bn from $1.73bn.

Turnover of casual/outdoor shoes and athletic shoes and were up by 5.3% and 1.5% respectively year-on-year. However, sports sandals saw turnover fall 1.3%.

Meanwhile, total shoe manufacturing volume fell 2% to 307.1m pairs. Yue Yuen said gross margins for the manufacturing business trended downward, due to increased input costs, including rising wages and allowance for workers in China.

The group said it has invested in supply chain integration and manufacturing excellence programmes to improve production quality and efficiency, adding that it will also increase investment in new technologies and innovative materials to “further enhance” it capabilities to be a strategic partner of brand customers.

Less than a year after a two-week long strike at Yue Yuen, some 5,000 workers were said to be taking part in a new round of industrial action over proposed production changes last week. While Adidas said it does not source from the factory in question, Nike said there has been "no impact" to the brand's production.