SYDNEY—Billabong has returned to profit for the first time in three years.

The Gold Coast, Queensland-based surfwear manufacturer said Thursday it posted a net profit for the six months to December 31 of 25.7 million Australian dollars or $21 million at average exchange for the period, compared to a loss of 126.3 million or $113 million for the previous corresponding period.

Sales slid 0.5 percent to 522.1million Australian dollars or $426 million. The company said they slid 1.1 percent on a constant currency basis.

Excluding significant items and discontinued businesses, EBITDA for the period was a profit of 42.8 million Australian dollars or $35 million.

European EBITDA grew 5.1 million or $4.2 million following ongoing restructuring and in the US, the Group’s biggest market, brand Billabong and RVCA sales grew 9.5 percent and 5.7 percent respectively on a like-for-like basis in the wholesale channel.

“A year into our turnaround it’s encouraging to see the Group return to profitability for the first time in three years. There remains though significant operational reform to be undertaken” said Billabong chief executive officer Neil Fiske.

Said IG market strategist Evan Lucas, “Unfortunately there is still no universal progress in the turnaround story of Billabong International. Europe remains a headache, along with the Asian assets. The U.S. is the only major growth part of the business but was below market expectations at 9.5 percent. The market was expecting between 10-12 percent”.

 

Investors appeared unimpressed with the news. The company’s stock was down 3.6 percent in early morning trade on Thursday.

 

 

 

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