China's Yue Yuen H1 profit falls 48 pct on staff benefits
14/08/2014 02:01
HONG KONG, Aug 14 (Reuters) - Chinese shoe manufacturer Yue
Yuen Industrial Holdings Ltd 0551.HK posted a 48 percent fall
in first-half net profit as it booked provisions to improve
employee benefits - steps it has taken after it suffered from a
major strike earlier this year.
The strike was one of China's biggest this year, with
thousands of Yue Yuen workers only agreeing to go back to work
after the footwear maker for companies such as Nike Inc NKE.N
and Adidas ADSGn.DE pledged to meet some of their demands for
better benefits. ID:nL3N0NH2PR
"The recent events that have affected the manufacturing
operations in the first six months of 2014 underscore the near
term challenges in the business and for the industry in
general," Chairman Lu Chin Chu said in a filing to the Hong Kong
bourse.
Net profit slid to $101.4 million, down from $194.45 million
in the same period a year earlier. Revenue rose 6.8 percent to
$3.95 billion.
Labor activism has surged in China in recent months as
slowing economic growth and rising costs have squeezed companies
in industrialised areas like the Pearl River Delta in southern
Guangdong province, home to Yue Yuen's factories.
ID:nL4N0OS1XE
Yue Yuen, which is controlled by Taiwan-listed Pou Chen Corp
9904.TW , said it would reallocate production capacity across
Asia to offer customers different input cost structures.
The company had about 417,000 staff as of end June 2014.
(Reporting by Donny Kwok; Editing by Edwina Gibbs)
((donny.kwok@thomsonreuters.com; +852 2843 6470; Reuters
Messaging: donny.kwok.reuters.com@reuters.net))
Keywords: YUE YUEN IND RESULTS/