Lego First-Half Profit Declines Amid Higher Investmentsby
Lego A/S reported a 1.8 percent decline in profit for the first half of the year as Europe’s biggest toymaker hired more workers and invested in China and Mexico.
Net income declined to 3.49 billion kroner ($523 million), the Billund, Denmark-based company said in a statement on Tuesday. Sales increased 11 percent to 15.7 billion kroner and operating profit rose 1 percent to 4.66 billion kroner.
Lego’s workforce jumped 24 percent to 18,500 people as the building block maker seeks to accelerate growth after already having doubled revenue and net income over the past four years. The company said its new factory in China has started producing, with further expansion planned. It also plans to expand its facilities in Mexico and Hungary.
“These investments in people and infrastructure will obviously have an impact on our short-term profit growth,” Chief Financial Officer John Goodwin said in the statement. “But they are part of our long-term plan to sustain the development and delivery of fun, high quality, and creative play experiences for more children in more parts of the world in the future.”
Lego’s main owner and Denmark’s richest man, 68-year-old Kjeld Kirk Kristiansen, earlier this year handed over some of the responsibilities to his son, Thomas Kirk Kristiansen.