Billabong's first-half loss widens by more than 40%, Americas revenues lift

By

Benjamin Fitzgerald

Published
Feb 23, 2018

Billabong's first-half loss has widened by more than 40 per cent to $18.4 million, while revenue for the six months to December 31 fell 3.1% to $476.5 million, which is reflective of "a challenging industry undergoing tremendous change," according to the surfwear retailer.

Billabong said the result confirm the January guidance given for underlying full-year earnings to exceed those of the previous year, and fall between $51.1 million and $54 million. 

“The results we are reporting today are consistent with the updated guidance given in January – namely that we would be down in the first half, but expect to be up in the second to deliver full year EBITDA of $51.1 million to $54.0 million – at or just above last year," said ​Billabong's Chief Executive Officer ,Neil Fiske.

Revenues in the Americas lifted 1.1%, or 3.9% in constant currency. Other regions suffered. Total revenues in Asia Pacific were down 4.5% – up 1.3% in retail but down 16.6% in wholesale, while European revenues were down by 6.1% in constant currency.

"The result is reflective of the ongoing difficult trading conditions in retail and much of the action sports sector. While our Americas region has again produced another good result, with EBITDA up 34.1% constant currency year-on-year, it is the smaller half year for that region. In contrast, trading proved challenging in Asia Pacific, where H1 is the larger half," continued Friske.

By brand, Billabong was down 0.5% for the half (up in Americas, down in APAC), while Element was down 13%, "impacted by the timing shift in Europe and a change in distribution strategy in Canada," said Billabong. Skate fashion brand, RVCA, however, was up 9.6% with growth in every region.

The results coincide with Billabong takeover talks with Boadriders.
At the end of 2017, the Queensland, Australia-based company received received an intention to purchase from Boardrider to acquire all of the company's shares for $1 each.

In January, both parties last month entered into a scheme of arrangement, which Billabong said had limited conditions.

Boardriders, which was founded in as Quiksilver in Torquay, Victoria -- now based in California, is majority owned by Los Angeles fund manager Oaktree Management, which also owns 19 per cent of shares in Billabong and is one of its two biggest lenders.

Its brands include Roxy and DC Shoes, as well as Quiksilver.