Li Ning stabilizes financial position as sales drop sharply

Li Ning, China’s largest sporting goods company, has posted revenues of RMB2,906 million (€356.6 million) for the first half of 2013, which equates to a 24.6 percent drop in sales. This drop was the result of the company’s “Transformation Plan” to reduce sell-in inventories and the number of points of sale to enhance their profitability. The company’s operating loss of RMB179.9 million (€22.1 million) actually improved to RMB38.6 million (€4.6 million). Pre-tax profits (Ebit) however fell drastically from RMB92.4 million (€11.3 million) one year ago to minus RMB129.2 million (€15.9 million). For the full year, Li Ning’s management expects to see some results from its efforts to stabilize the financial core of the company, in part thanks to improved cash flow. However, Li Ning anticipates uncertainties with regards to macro-economics at play in China and domestic consumption in the country.

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