By  on August 28, 2014

SYDNEY — Billabong International Limited has seen positive sales growth for the first time in three years, but underlying earnings continue to slide. In its full year 2014 results released on Thursday, the company reported its net loss had narrowed to 233.7 million Australian dollars, or $220 million, on global sales of 1.1 billion Australian dollars, or $1.03 billion, up 1.5 percent in Australian dollar terms. Earnings before interest, tax, depreciation and amortization fell 26.2 percent to 52.5 million Australian dollars, or $49.4 million, in the twelve months to June 2014, short of consensus forecasts of around 62 million Australian dollars, or $58.3 million. The EBIT tally excludes significant items and the discontinued Dakine, West 49 and Nixon businesses, but include e-commerce sites SurfStitch and Swell, which the company has said it plans to sell. Shares dropped by as much as 7.2 percent in early morning trade on the news, before closing at 54 Australian cents, or $0.50 at current exchange, down 3.6 percent. Sales in Asia Pacific rose 1.1 percent to 480.5 million Australian dollars, or $452 million, on a constant currency basis and earnings rose 7.8 percent to 34.6 million Australian dollars, or $33 million. Revenues in Europe fell 7.5 percent to 196.1 million Australian dollars, or $184.5 million, while earnings improved 23.7 percent, from a loss of 10.4 million Australian dollars in fiscal 2013, or $9.8 million, to a loss of 8.5 million Australian dollars in 2014, or $8 million. Dollar figures are converted from Australian dollars at average exchange rates for the periods in question. RELATED CONTENT: WWD Earnings Tracker >> The results were weighed down by continued poor performance in the Americas, where revenues fell 9.9 percent to 442.6 million Australian dollars, or $416.3 million, on poor wholesale sales in Canada and Brazil, while earnings fell 54.6 percent to 23.6 million Australian dollars, or $22 million. Billabong’s Americas operations had been particularly hard hit by the turmoil and instability of the past 18 months, during which time the company was the focus of multiple takeover bids, chief executive officer Neil Fiske said during in an earnings call. However, Billabong and RVCA, which represent close to two thirds of the region’s brand sales, are on track for wholesale growth in the US for the first time in several years based on fiscal 2015 forward orders, he said. “Our biggest challenge and our greatest opportunity in the 12 months ahead is the Americas,” said Fiske, who joined the company in September following the proposal of a $360 million debt and equity rescue deal by U.S. hedge funds Oaktree Capital Management and Centerbridge Partners, which was finally approved by shareholders in January. Added Fiske: “In the nine months since announcing our seven-part turnaround strategy, we have significantly stabilized, restructured and refocused the business. The company has a far stronger balance sheet. We have begun to simplify the portfolio. We have taken, and continue to take, significant costs out of the business. The turnaround is gaining traction.”  Click Here for the WWD Global Stock Tracker >>

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