Billabong profit falls, cuts dividend
Surfwear group Billabong International Ltd has posted a 13.3 per cent fall in annual profit and reduced its final dividend.
Net profit for the year ended June 30 was $152.84 million, down from $176.38 million in the previous year.
Its operating net profit, which excluded a non-cash impairment charge of $7.4 million, was $160.2 million, down 9.2 per cent.
The operating result was at the bottom of the company's guidance range for a profit between $160 million and $165 million.
Billabong said a recent rapid appreciation in the Australian dollar exchange rate against the US dollar and Euro, had reduced its operating profit from an expected $163.1 million.
Billabong chief executive officer Derek O'Neill said the result reflected the swift and unprecedented economic slowdown that impacted global economies.
"Given the lack of retailer confidence, the steep slowdown in consumer spending in various global economies and the extreme volatility in exchange rates, the company has emerged in remarkably good shape,'' he said.
Mr O'Neill said the group was approaching 2009-10 with conservative expectations.
He said it was difficult to build a potential recovery in retailer demand and consumer spending into its forecasts.
But in the absence of any further unforeseen exceptional circumstances impacting the global boardsport's market, Billabong is forecasting reported net profit to be to be flat in 2009-10.
The guidance is based on monthly average exchange rates for July 2009 and assumes the rates for the rest of 2009-10 will be around the August average rates of 83 US cents and 58 euro cents.
Billabong also said the forecast represents constant currency net profit growth - excluding the 2008-09 impairment charge - of about five per cent.
Meanwhile, annual revenue rose 23.9 per cent to $1.67 billion, or by 9.1 per cent in constant currency terms.
Billabong's gross profit margins of 53.2 per cent was down from 54.9 per cent previously, due to the tougher economic conditions in the US, although still relatively strong.
On a regional basis, reported sales in the Americas lifted 34.9 per cent, or 12.1 per cent in constant currency terms, to $836.8 million.
The result was helped by a nine-month contribution from the acquisition of DaKine.
Europe remained a standout performer, with reported sales lifting 23.4 per cent to $388 million, 9.3 per cent in constant currency terms.
Reported sales in Australasia were also higher, lifting 7.6 per cent, or 3.9 per cent in constant currency terms, to $444.3 million, driven by strong growth in Asia and Japan.
Billabong declared a final dividend of 18 cents a share, which was down from 28.5 cents in the previous corresponding period,The annual dividend payout was 45 cents, down from 55.5 in 2007-08.