Billabong International’s latest results, covering the six months that ended on Dec. 31, 2007, bear the brunt of currency effects. The Australian company’s revenues increased by 8.4 percent to A$662.0 million (€411.0m-US$609.4m), but grew by 15.8 percent in constant currencies. Net profit decreased by 2.0 percent to A$88.7 million (€55.1m-$81.6m), but was up by 5 percent on a currency-neutral basis. Excluding A$6.3 million in one-off tax benefits last year, the bottom line grew by 13 percent in constant currencies.
In Europe, turnover was 15.5 percent higher at A$143.4 million (€89.0m-$132m) - 19.6 percent up in constant currencies - with Billabong, Element, Nixon, and Von Zipper all recording double-digit growth. The Australian dollar ended last around 10 percent stronger against the U.S. dollar than at the end of 2006, so revenues from the Americas appeared flat but were actually 13 percent higher in constant currencies at A$287.5 million (€178.5m-$264.6m). The U.S. business performed well in January, and the backlog was at a record level.
Over the six-month period, revenues in Australasia rose by 15 percent to A$231.0 million (€143.4m-$212.6m). The figure includes revenues from South Africa, which was changed from a licensed to a wholly-owned operation at the start of the period. Billabong believes South Africa represents an enormous opportunity for sales.
The new acquisitions of Xcel and Tigerlily made modest contributions to sales over the 6-month period, while direct retailing accounted for 18 percent of revenue. Billabong opened 34 new stores, mostly in Europe, Asia, and South America, to bring its total up to 193.
On the basis of current exchange rates remaining stable at current levels, the group reissued its forecast for 5-10 percent full-year growth in earnings per share, or around 15 percent on a currency-neutral basis. Looking ahead, the group is planning to expand more in Taiwan and Korea. While the backlog in the region is healthy, bad weather on Australia’s East Coast is weakening growth expectations.
