Li & Fung Wams About 2012 Net Profit Decline

Hong Kong—Li & Fung Ltd., the sourcing giant, warned Thursday that its 2012 net profit would likely fall as much as 40% due to continued restructuring costs especially in its U.S. division.

Net income for 2012 is “unlikely to exceed” the previous year, the company said.

Li & Fung posted a 24% rise in its net profit to $681 million in 2011. Approximately 60% of Li & Fung’s revenue came from the United States in 2011, data compiled by Bloomberg shows. Analysts’ estimate had expected the company to report $885 million in operating profit for 2012.

The company, which will release its full year results in March, had reported a 33% increase in its first half profit in August, a figure boosted by a write-back for two earlier acquisitions.

“The 2013 outlook will remain rather challenging for Li & Fung as the U.S. economy recovery is still quite slow,” said Steven Leung, an analysts with UOB Kay Hian Ltd.

Like this? Share it!