Moody's: Li & Fung

Moody's Investors Service said that the fall posted by Li & Fung Ltd. in its operating profit for the first half of 2012 has no immediate impact on its A3 corporate family rating.

Against the backdrop of weak consumption in major global markets, Li & Fung reported a 22% decline in its core operating profit, mainly due to a lower contribution from its distribution division. At the same time, it managed a marginal year-on-year growth rate in turnover of 4% to $9.13 billion.

Moody's said it believes that Li & Fung's A3 rating is unaffected because the core operating profit margin of its two other core businesses, trading and logistics, which together accounted for 72% of total group revenue, remains largely unchanged. Their operating margins were 2.8% and 2% respectively in 1H 2012, compared to 3% and 1.1% in 1H 2011.

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