Brambles First Half Net Profit Halves; Guidance cut
20 February 2017 - 9:48AM
Dow Jones News
By Rebecca Thurlow
SYDNEY--Logistics company Brambles Ltd. (BXB.AU) slashed its
full-year earnings guidance after first half net profit halved on
slowing North America pallet sales and a large impairment of oil
and gas assets.
The pallet and container provider on Monday reported a net
profit of US$146.2 million for the six months through December,
down from US$290.9 million a year earlier.
Brambles in October combined its oil and gas business with
Hoover Container Solutions to create an independent 50:50 joint
venture company Hoover Ferguson Group. Brambles' first half result
includes a US$120 million non-cash impairment of the group's
investment in the JV.
Underlying profit, a measure of continuing operations which
strips out financing costs, tax and one-time items, rose by 3% to
US$468.9 million, on a constant currency basis, in line with
guidance.
Facing continued headwinds in its North American business, the
company said it now expects underlying profit to be flat in fiscal
2017. That was more detailed than its profit warning on Jan. 22,
which signaled that it would fall short of an earlier 9-11% growth
goal.
Chief Executive Tom Gorman said the performance of the pallets
business in North America was disappointing.
"We came into this financial year with good momentum in North
America and set our expectations high for continued growth.
Unfortunately, a combination of market-driven cost factors, and
increased competition have resulted in overall performance well
below our expectations," said Mr. Gorman who is retiring from the
role Monday to make way for incoming chief executive Graham
Chipchase.
Brambles said competitive pressures in the North American
pallets business resulted in lower-than-expected customer
conversions to pooling and muted price growth. In addition,
customer destocking hit volume growth.
The company also said it will pay a first half dividend of 14.5
Australian cents a share, steady with a year earlier.
-Write to Rebecca Thurlow at rebecca.thurlow@wsj.com
(END) Dow Jones Newswires
February 19, 2017 17:33 ET (22:33 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Brambles (ASX:BXB)
Historical Stock Chart
From Mar 2024 to Apr 2024
Brambles (ASX:BXB)
Historical Stock Chart
From Apr 2023 to Apr 2024