Yue Yuen Industrial Ltd., the China footwear manufacturing giant that makes footwear for many key athletic brands,  reported net income declined 2.0%to $108.5 million in the second fiscal quarter ended March 31, compared to from $110.7 million inthe year-ago period. Revenues totaled $1.19 billion for the quarter, a 1.8% rise increase versus the prior year quarter.


Athletic footwear revenues declined for the quarter, as did shipments to the U.S. market, which represents 31.3% of the company's revenues.


First half revenues increased year-on-year by  9.7%  to $2.55 billion from $2.32 billion in H1 last year.  Gross margin rose 210 basis points to 26.9% of sales and net income inched up 0.1% to $217.7 million. 
The Directors  declared  an  interim  dividend  of HK$0.34  per  share,  unchanged  from HK$0.34 per share last year.
A release from the comapny said that “The  business environment was  very difficult due to the global  economic decline.  However during the  period under review, the Group recorded sales growth as a result of the stable demand from its brand name footwear customers, further consolidation in the footwear  manufacturing  industry  and  sales  growth  for  the  Greater  China  wholesale  and retail  operations.  The  total  volume  of  shoes  produced  rose  by  1.7%  year-on-year  to  129.9 million pairs, thanks to the support of our existing customers and orders from new customers.  The  total  number  of  production  lines  remained  at  440  by  the  end  of  March  2009.  The Group continues to benefit from economies of scale and the close relationship it has with its brand name customers.

Yue Yuen, which makes shoes for brands such as Nike Inc. and Adidas-Salomon AG, produced 129.9 million pairs of shoes in the first half, up 1.6% from a year earlier.