In a good year for the footwear industry as a whole, Yue Yuen Industrial (Holdings) Limited consolidated its position as the world’s largest manufacturer of athletic and casual shoes. We benefited from our investment in additional production capacity to serve new and existing customers and to expand our product categories.
RESULTS
The directors of the Company are pleased to announce that the audited consolidated profit of the Company and its subsidiaries (the "Group") for the year ended 30th September, 1997 amounted to US$157,670,000, representing an increase of 60% from the previous year.
FINAL DIVIDENDS
The directors propose to pay a final dividend of 35 Hong Kong cents per share for the year ended 30th September, 1997 to members whose names appear on the Register of Members of the Company on 25th March, 1998. Subject to approval at the forthcoming annual general meeting, dividend warrants will be sent to shareholders on or before 1st April, 1998. Together with an interim dividend of 20 Hong Kong cents per share, the total dividend for the year is 55 Hong Kong cents per share.
REVIEW AND PROSPECTS
In 1997, Yue Yuen benefited from healthy growth in demand for athletic and casual shoes from the major brands around the world. We were able to satisfy this demand by adding 37 new production lines during the year, giving us a total of 160 lines located in China, Indonesia and Vietnam. These manufacturing bases give us the flexibility to make arrangements for production around the region. During the year, total production of shoes reached 74.3 million pairs as compared with 56.8 million pairs in the previous year.
Along with increasing production and turnover, we have also diversified our revenue base. Product categories have been expanded to include specialty sport shoes, casual, outdoor and designer brand shoe lines as well as athletic shoes. In the category of specialty sport shoes, we manufacture baseball, soccer, golf, hiking, biking, and steel-toe shoes, ski boots, etc..
We should continue to benefit from this diversification in 1998 when the casual and outdoor shoe sectors are expected to offer attractive prospects. This would follow the trend set this year when production of casual shoes by Yue Yuen rose from 6.2 million pairs to 10.2 million pairs, an increase of 65%.
Our scale is an important factor in the consolidation of our market position. It allows us to adjust our facilities to accommodate changes in industry trends. The breadth of our manufacturing operations and the economies of scale that we enjoy have also been key to our achievements in building on existing customers and adding new customers over the past year. Together with our expanded capacity, this positions us well for continued growth.
Key to the success of the Group during the year has been the skills and hard work of our people. We recognize that they deserve the best in terms of working and living environment. During the year, we have invested in upgrading staff accommodation, canteens and other facilities. We also enrich their daily life with programs of outings and sports activities.
From the sound base that we have established in the industry, we believe that the Group will continue to prosper and to generate a healthy return to shareholders. The end markets for our products, mainly in the U.S. and Europe, continue to prosper and we have been fortunate to experience minimal impact from financial and economic crisis in Asia.
The dedication and initiative of all our people were the foundation of our achievements during the year. We are also grateful for the support of our customers, suppliers and business associates.
APPOINTMENT OF DIRECTORS
The board of directors is pleased to welcome Mr. Hung Shih and Mr. John J.D. Sy as new directors of the Company.
By Order of the Board
Tsai Chi Neng
Chairman
Hong Kong, 18th February, 1998
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