Yue Yuen Industries (00551) issues profit warning, expecting a decrease of no more than 25% in first quarter attributable net profit compared to the same period last year.

YUE YUEN IND (00551) announced that the group expects the attributable profit for the current period (three months ending March 31, 2025) to decrease by not more than 25% compared to the same period in 2024, a reduction of up to 100 million US dollars. The decrease in profit is mainly due to the complex and volatile global economic environment, which has led to fluctuations in the operating environment and an increase in manufacturing unit costs for footwear, thereby negatively impacting gross profit margin: Decrease in production efficiency: Uneven capacity utilization in various manufacturing plants, as well as slower-than-expected progress in new production lines and new shoe upper processing factories, have resulted in production efficiency not meeting set standards, leading to inability to reduce overtime demand and other related costs as scheduled; and Rise in labor costs: The number of manufacturing employees has increased significantly year-on-year, coupled with wage increases in various regions, resulting in higher labor costs. With production efficiency falling short of expectations, it is insufficient to offset the pressure of wage costs.