Strengthening Australian Dollar Hits Billabong's Profits
International beach and surf wear brand Billabong has been hit hard by the ever strengthening value of the Australian Dollar, as was revealed by the company in its annual general meeting. The strong currency value has considerably hit overseas sales and the firm's after-tax profits have slipped by over 13% and now stand at $152.8 Million.
Billabong's sales, 80% of which are in international markets, have been hit by the current economic situation, in addition to the Australian Dollar's value going up. According to the firm's Chief Executive Officer Derek O'Neil, for every 1 cent rise in the monthly average value of the Australian dollar against the US dollar, Billabong's profits would decrease by $500,000.
"I'm not unhappy about the rising Australian dollar. It has a number of positive benefits. It's just when there is a massive rise in a very short period of time it affects our profits immediately", Said Derek, who firmly believes that despite the figures which seem alarming, the company has nothing to fear.
Meanwhile, analysts are positive that the dip in Billabong's profits are only temporary and will stop as soon as the currency values stabilize.
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