Shares in surfwear retailer and distributor Billabong International fell yesterday after it said the events in Japan had forced it to recast its 2011 earnings outlook.
In a statement to the ASX the company said full-year net profit is likely to fall by as much as 6% because of the likely impact of last Friday’s earthquake and tsunami on its operations.
Billabong shares fell more than 4%, or 49c, to a low of $7.28 before bouncing back to close down 2%, or 16c, at $7.61.
Billabong said net profit for 2010-11 was likely to be 2% to 6% lower than a year earlier, revising an earlier forecast made at the February interim results release that full-year profit was likely to be flat.
A 6% fall would be equivalent to about $137 million, compared with the $145.99 million profit recorded in 2009-10 for Billabong.
The lower figures is well down on the company’s peak profit of $176 million earned in the 2008 financial year, and the $159 million earned in 2009.
The company is the second in two days to reveal a financial hit from the quake and tsunami in Japan.
Air New Zealand said the events in Japan would be a factor in its second half result being a loss (along with high oil and fuel prices and the Feb. 22 Christchurch earthquake).
On Monday insurer QBE revealed that the quake and tsunami would cot it about $125 million of reinsurance losses through its interest in a syndicate at Lloyds of London.
Billabong, which has 44 company-owned stores in Japan, said yesterday that its warehouse had not suffered any direct physical damage from the earthquake and tsunami.
However, a number of company-owned retail stores and the wider wholesale account base ‘‘have been or are likely to be affected’’, according to the company which added that 19 stores initially closed due to the damage and 18 remain closed.
"It is understood that two of these stores were badly damaged by the tsunami, three suffered major unspecified damage and a further 13 remain closed due to power disruptions," Billabong said in a statement.
The company said it remained difficult to determine the exact impact on trading within the wholesale account network, which consisted of 500 accounts in Japan. It said "significant sales revenue and profit" were generated from these accounts.
"Preliminary discussions indicate that many accounts are currently closed. Billabong expects to work closely with its wholesale partner accounts to help it through this difficult period."
