Billabong leveraged international sales to post strong numbers for the companys first half of fiscal 2003-04. US sales jumped 27% in local currencies, with EBITDA in the US rising 36%. Australian sales were up 11% with “double digit profit growth” in key regions internationally. This strong growth boosted worldwide sales by 6% after currency conversions, to AU$305 million (US$ 198.4 mm) and consolidated EBITDA was up 13.4% to AU$66 million (US$ 42.9 mm). Net profit after tax jumped 12.3% to $40.6 million.
The strengthening AU$ had a negative impact on consolidated sales and income, but according to Billabong CEO Derek ONeill, “”The company has shown it can deliver double-digit profit growth in adverse currency conditions through strong global momentum, solid revenue growth and increased margins The strength of the core business is obvious in local currencies when the effect of a 24% year-on-year decline in the US dollar is backed out.”
In the short term, Mr ONeill said that any precise estimate of the full-year result was very dependent on currency movements. It was difficult to foresee, however, any foreign exchange environment where the company would not report “double-digit EPS growth for the full year.”
