Billabong Reports 7.1-Percent Decline In First Half Profit

josh hunter

• February 19 2009
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According to reports from businessday.com, Billabong International Ltd reported a 7.1 per cent decline in first half profit to $82.4 million. Deprecation in the Australian dollar benefited the result.

The company says it remains on track to achieve full year earnings per share growth of between six and ten percent for the full year. Additionally, earnings per share for the six months ending December 31 fell 7.4 per cent to 39.9 cents per share.

“While the company has experienced margin erosion in its biggest division, the Americas, the effect is being partially offset by strong appreciation in the US dollar against the Australian dollar,” Billabong chief executive Derek O’Neill. “The group’s forward order book, including those of the new business units, coupled with currency benefits and cost controls, gives the company the confidence it will achieve its guidance in the absence of any further significant deterioration in the global boardsports market.”

The first half result included a $2.3 million non-cash pre-tax impairment relating to Billabong’s retail stores in the UK and US.

The company also says that earnings before interest, tax, depreciation and amortisation (EBITDA) were steady at $147.3 million. During the half Billabong experienced a strong overall performance in Europe, a steady outcome in Australasia and higher sales growth at lower margins in the US, due to lower consumer spending.

In Europe, reported sales rose 24 per cent to $177.8 million, while EBITDA margins increased to 20.1 per cent from 19.3 in the previous corresponding period.

Reported sales in Australasia lifted gained 6.3 per cent to $245.7 million, and EBITDA margins fell to 28.3 per cent.

The Americas had reported sales growth of 33.9 per cent to $385.1 million, significantly boosted by acquisitions and favourable currency movements.

EBITDA margins softened to 10.6 per cent due to a reduction in underlying year-on-year sales amid extremely weak economic and consumer conditions, Billabong said.

At the time of this post there was no additional information available on Billabong’s Investor Relations Site.