Billabong posted its second full year loss, this time a negative $77.13 million, up from the $23 million in the red last year, as the surf wear company restructures in a weak retail market.
The online surf wear industry has been under pressure with Billabong competitor SurfStitch going into administration last week.
Billabong’s 2017 revenue was down almost 9% to $979.45 million. The result includes impairment charges of $106 million, relating to goodwill and brands.
A short time ago, Billabong shares were up 8% to $0.81.
CEO Neil Fiske says 2017 marks a turning point for the company.
EBITDA (earnings before interest, tax, depreciation and amortisation) for the year was up 2.8% to $51.1 million on a constant currency basis.
Fiske says this is less than a million dollars below the guidance range provided in November.
“If not for the widely reported weak retail conditions in Australia we would have been well up in the range,” he says.
The second half was better than the first six months of the year with improved earnings.
And the US operations started a turnaround.
The Americas had 46.9% EBITDA growth to $45.7 million. Europe rebounded from a soft first half to post full year EBITDA growth of 8.9% to $17.1 million.
“These results reflect the tangible progress we are making in implementing our turnaround strategy in all regions, particularly in the Americas and Europe,” says Fiske.
“This half represents the first time in three years that comparable gross margins have improved in every region, year-on-year.
“Looking ahead, market conditions remain challenging, particularly in Australia, but we see opportunities for sustained earnings growth.”
The company expects 2018 EBITDA, excluding significant items, to exceed 2017’s $51.1 million.