SYDNEY Feb 22 Australian surfwear company
Billabong International Ltd posted a first-half net
loss of A$536.6 million ($550.2 million) and lowered its
full-year guidance, citing difficult trading conditions in
Europe and a disappointing performance from its Nixon watch
The net loss, which compared with a A$16.1 million profit a
year ago, included a A$427.8 million non-cash impairment for
goodwill and brands, and a A$106.6 million writedown related to
Billabong shares fell as much as 7 percent in early trade to
A$0.845. The stock has plummeted about 87 percent over the past
two years, compared with a 3 percent rise in the benchmark
S&P/ASX 200 index over the same period.
Billabong said talks are continuing with two takeover
suitors - private equity firm Altamont Capital Partners, led by
Billabong's former U.S. boss Paul Naude, and clothing group VF
Corp - and due diligence is expected to be completed
Both suitors have pitched offers at A$556 million, or A$1.10
per share, a significant discount to a A$3.30 bid by TPG Capital
that Billabong rejected a year ago as too low.
Subsequent offers of A$1.45 from TPG and Bain Capital last year
were withdrawn after due diligence.
Billabong's net profit after tax excluding significant items
fell 50 percent to A$19.2 million.
The company said it now expects full-year underlying
EBITDA(earnings before interest tax, depreciation and
amortisation) of A$74 million to A$85 million in constant
currency terms, down from the A$85 million to $94 million it
forecast in December when it cited weakness in European,
Canadian and Brazilian markets.
"These results emphasise that significant structural change
is essential to return the group to profitable growth," Chief
Executive Launa Inman said in a statement.
The company, which has already sold off some assets, would
begin a major restructure of its global supply chain next month
to reduce the number of apparel suppliers from more than 275 to
50. It is also on track to close 160 of its stores by June,
VF Corp, which owns brands including The North Force,
Wrangler, Timberland, The Vans and 7 For All Mankind, said when
it released its own earnings last week that bid discussions were
continuing but it had no further comment.
The Greensboro, North Carolina-based company said Asia would
remain its strongest region as it reported a
higher-than-expected fourth-quarter profit but gave a 2013
outlook below analysts' estimates.