Billabong International Limited today announced a strong result for the first six months of 2003-04, with a sharp rise in offshore revenue and improved operating margins.

Net profit after tax lifted 12.3% to $40.6 million (after adjustments for a prior year tax consolidation).

Directors declared a fully-franked interim dividend of 12.5 cents per share, up from 11 cents per share previously.

Billabong chief executive Derek O’Neill said the strong growth in offshore revenues and profits and a buoyant domestic business had reduced the adverse impact of a strengthening Australian dollar.

“The underlying business is very strong, forward orders are encouraging and the outlook remains positive,” said Mr O’Neill.

“The strength of the core business is obvious in local currencies when the effects of a 24% year-on-year decline in the US dollar is backed out.

“In America, sales increased 27% and EBITDA was up 36% in local currencies. American EBITDA margin improved from 12.9% to 14.3%. European revenues grew 13% in local currencies and yen revenue in Japan lifted 50%.

“Double-digit profit growth was recorded in all key regions internationally. The improvement in American margins is a particularly pleasing aspect of the result.

“In Australasia, sales were up 11% to $103 million, EBITDA was up 20% to $32 million and the EBITDA margin lifted from 28.6% to 30.9%.

In reported terms, after currency conversion, total group revenue was up 6% to $305 million and consolidated EBITDA was up 13.4% to $66 million.

Mr O’Neill says all product categories are performing well globally.

“Good demand continues for products such as denim, while men’s t-shirts, women’s swimwear and accessories are uniformly strong across all territories,” said Mr O’Neill.

“Billabong is well positioned to maintain its consistent, long-term growth.

“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.”

In the short term, Mr O’Neill 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.”