In the first nine months 2013 Ming Le Sports AG, a rapidly growing branded sportswear company in China, was able to increase its revenues by more than 25 per cent. At the same time profit margins were affected by higher costs of sales resulting from the increased outsourcing of manufacturing to other vendors due to capacity constraints.
Ming Le's revenues showed a strong year-on-year growth of 25.5 per cent to 256.6 million Euros (9M 2012: 204.5 million Euros). Measured in RMB, revenues increased by 26.3 per cent. This positive development resulted primarily from higher sales volumes generated from the increased number of authorised retail outlets and increases in the average unit prices.
In the first nine months of 2013 Ming Le sold 25.1 million units of footwear and apparels, an increase of 22.2 per cent compared to the previous year. The average unit selling price grew by 3.3 per cent to 11.64 Euros (9M 2012: 11.27 Euros) for footwear products and by 5.0 per cent to 9.70 Euros for apparel products (9M 2012: 9.20 Euros).
Gross profit remained almost unchanged amounting to 69.8 million Euros (9M 2012: 70.0 million Euros), representing a slight decrease of 0.3 per cent. Gross profit margin declined from 34.2 per cent in the first nine months 2012 to 27.2 per cent in the same period 2013. This slowdown is mainly attributed to higher costs of sales incurred due to the increased outsourcing of manufacturing to other vendors.
As a result, profits of operations (EBIT) also went down by 11.1 per cent to 44.0 million Euros (9M 2012: 49.2 million Euros). EBIT margin fell from 24.1 per cent in 2012 to 17.1 per cent in the first 9 months 2013.
Accordingly net profit declined by 23.8 per cent from 43.1 million Euros to 32.9 million Euros in the considered period. This represents a net profit margin of 12.8 per cent (9M 2012: 21.1 per cent).
Strong financial position
Nevertheless, Ming Le Sports remains financially well-positioned: The company's equity increased by 21.1 per cent from 155.2 million Euros as of December 31, 2012 to 188.0 million Euros as of September 30, 2013. Equity ratio went up to 82.1 per cent (December 31, 2012: 81.9 per cent).
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