Global health and safety manufacturer Ansell has posted a 91 per cent drop in first-half net profit to $US39.5 million (A$55.3m) as it tallies the cost of its ongoing transformation, but shares in the company are riding high after a slight improvement to full-year guidance.
Ansell's total revenue for the six months to December 31 fell by 5.4 per cent to $US725.3 million, but sales from continuing operations rose 0.4 per cent as the company continues apace with its restructuring program.
During the reporting period Ansell bought Texas-based protective glove manufacturer Ringers Gloves for $US70 million, while also announcing plans to shut three production facilities in Mexico and South Korea and instead expand operations in Vietnam, Sri Lanka and Malaysia.
The company sold its condom business to a Chinese consortium in 2017.
Ansell chief executive Magnus Nicolin said the company, having also completed the $US265 million share buyback originally announced in May 2017, had overcome rising costs of raw materials, risks of US import tariffs, and emerging areas of demand uncertainty in the EMEA automotive sector.
"We have successfully navigated these challenges and have seen improving trends through the half in both organic revenue growth and margin," Mr Nicolin said.
"This, coupled with continued strong delivery against the transformation objectives, puts Ansell in a strong position to achieve further top and bottom line growth in the second half."
FY19 earnings per share for Ansell's continuing businesses is now expected in the range of 106 to 112 US cents, compared to 100 to 112 US cents.
Ansell has reported an interim dividend of US 20.75 cents, unfranked, up 0.25 cents from the previous year.
Ansell shares were 2.44 per cent higher at $24.81 at 1200 AEDT, up from $24.10 a year ago, but down from July's near-historic peak of $29.11.
ANSELL PROFIT DIPS AS TRANSFORMATION ROLLS ON
* Net profit after tax down 91pct to $US39.5m (A$55.3m)
* Total revenue down 5.4pct to $US725.3 million ($A1.01 billion)
* Interim dividend 20.75 US cents, unfranked, up 0.25 cents from last year.
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