BRAMBLES, its first-half profit cut by 28 per cent because of the financial crisis, will axe 750 jobs globally and scrap up to 7 million pallets in the US to bolster earnings.
The Australian-based pallet supplier recorded $US212.8 million ($A324.3 million) first-half profit, 28 per cent lower than the previous year's $US293.7 million. The figure included $US131.7 million in significant items.
Chief executive Mike Ihlein said that since the November annual meeting, global trading conditions had sharply deteriorated, hitting operations in the US and Europe.
"The current challenging and volatile trading environment is expected to continue for some time and this makes it difficult to provide outlook guidance with confidence," he said.
Brambles' shares slumped 75¢, or 11.7 per cent, to $5.65. At one stage they reached $5.57, a 12-month low.
Sales were $US2.07 billion, up 4 per cent. Mr Ihlein said this was because of new business and price/mix gains offsetting declines in volumes from slowing economic conditions.
Sales in various business units were: CHEP Americas $US792.5 million; CHEP Europe, Middle East and Africa $US761 million; CHEP Asia-Pacific $US166.6 million; and document manager Recall $US353.1 million.
Directors declared an interim dividend of A17.5¢ a share, up 2.9 per cent on the 2008 interim dividend of A17¢, payable on April 9 with a March 19 record date.
The company also started a dividend reinvestment plan that will begin with the interim dividend at a 2.5 per cent discount.
Mr Ihlein said the significant items mainly related to actions designed to "underpin our future performance". These included the accelerated scrapping of 7 million pallets in the US that would not be needed due to the downturn. Usable timber would be recovered.
Mr Ihlein said a rationalisation of global operations would cut 750 jobs in the next year at a cost of $US60-70 million over the next two financial years. But annual savings would be $US40-50 million.
Mr Ihlein said Brambles was also investing in a two-year pallet quality program in the US that would position the business for the medium to long term.
