Hong-Kong-based Stella International Holdings Ltd’s revenue increased by 18.9 percent in the six months to U.S.$827.2 million with support from 9.4 percent growth in shipment volume.
By region, sales for the footwear supplier in North America rose to $429.1 million from $344 million. Sales in Europe climbed to $196.4 million from $146.5 million. Sales in Asia were $68.1 million against $45.4 million. China’s sales were $105.9 million, down from $137.4 million.
Net profit increased to $60.2 million, significantly improved from $32.2 million for the same period last year
Operating profit margin increased to 8.3 percent, an improvement of 3.1 percentage points compared to that of the same period last year. Average selling price increased by 7.8 percent mainly due to higher raw material costs
Stella Int’l’s chairman statement follows:
“2022 turns out to be more challenging than anticipated. Geopolitical events have exacerbated existing inflationary pressures that were already building up in the global supply chain.
“We have weathered this storm well so far, as we continue to implement and benefit from our margin-accretive strategies. We operated at close-to-full utilization during the period under review, as a result of our earlier decision to enhance our customer portfolio with our Sports and Luxury categories. Our Fashion category also recovered very strongly with volumes surpassing pre-pandemic levels.
“Moreover, the geographic diversity of our manufacturing base ensured stable operations, despite the return of strict COVID restrictions in some parts of Asia.
“In a nutshell, we are performing in line with our expectations, along with our strategies to better capitalize on business opportunities that match our unique capabilities.
“The long-term path for our future sustainable growth and profitability remains clear. However, in the shorter term, conditions are hazier. While demand for our products remained robust in the first half of 2022, the visibility is not certain for the rest of the year. As inflation and higher interest rates start to impact consumer sentiment, demand for some of our products may be less promising in the subsequent months when compared to the earlier plan set at the beginning of the year.
“But the long-term fundamentals of our business remain strong. Huge growth potential remains around the crossover point between sports and fashion footwear and at the high-end athleisure market. Our unique design and product development capabilities continue to help us win new customers.
“At the same time, we are constantly improving our long-term cost base and operational efficiency. The development of our new manufacturing facility in Solo, Indonesia remains on track to deliver additional capacity next year in a very competitive manner. We are also committed to growing together with our largest partner in ways that underscore our unparalleled capabilities, unique strengths and commitment to “making the best shoes”.
“Most of all, we remain fully committed to providing returns to our shareholders. In line with our long-standing 70 percent payout ratio, I am pleased to share that the Board has resolved to declare an interim dividend of HK42 cents per ordinary share.
“As we continue to push forward with our growth strategies, I would like to take this opportunity to thank our customers, business partners, employees and shareholders for their sustained support during the interim period.”
