Shares in Brambles have slumped after the logistics group unveiled a 50 per cent slide in first-half profit and lowered full-year profit forecasts.
Brambles’ net profit for the six months to December 31 halved to $US146.2 million ($A190.5 million), due to $US138.5 million in impairments, most of that on its US oil and gas container joint venture, Hoover Ferguson Group.
The company’s continuing operations profit for the half was flat at $US295.3 million, while sales revenue for continuing operations has risen four per cent to $US2.74 billion.
Competition and cost pressures in its North American pallets business weighed on the first-half results, with outgoing chief executive Tom Gorman labelling the performance of the business “disappointing”.
“We came into this financial year with good momentum in North America and set our expectations high for continued growth,” he said.
“Unfortunately, a combination of market-driven cost factors, and increased competition have resulted in overall performance well below our expectations.”
After warning in January that it would not meet previous guidance for full-year revenue growth of between seven and nine per cent, and underlying profit growth of nine-11 per cent, Brambles on Monday said revenue growth for 2016/17 was now expected to be around five per cent in constant currency terms.
The company said profit would be flat on 2015/16.
Brambles shares were down 8.3 per cent to $9.64 at 1137 AEDT, the lowest level since September, 2015.
Monday’s results also marked Graham Chipchase’s taking over formally from Mr Gorman, after being announced as the long-running CEO’s successor in August.
BRAMBLES DOWN AS GORMAN PACKS IT IN
* Net profit down 50 pct to $146.2m
* Revenue up four pct to $2.74bn
* Interim dividend unchanged at 14.5 cents, 25pct franked