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U.S. tax reform benefit drives Australia's Brambles profit above estimates

Published 02/18/2018, 06:04 PM
© Reuters.  U.S. tax reform benefit drives Australia's Brambles profit above estimates
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(Reuters) - Australian pallets and container company Brambles Ltd (AX:BXB) reported a three-fold jump in half-year net profit on Monday as it recognised a one-time benefit from the passage of the Tax Cuts and Jobs Act in the United States.

Brambles reported an attributable profit of $447.2 million for the six months ended Dec. 31, compared with $146.2 million a year earlier, beating estimates of $323.8 million, according to an average of two analysts.

The company said profit was helped by the absence of impairments incurred in the previous year and recognition of the one-time benefit of $130.1 million from the U.S. tax reform.

Underlying profit for the first-half, however, rose only 1 percent on a constant currency basis to $493.7 million, impacted by previously flagged factors such as loss of large Australian reusable plastic containers contract and investments related to the Hoover Freguson joint venture.

The company declared an interim dividend of A$0.145 per share, the same as last year and said sales revenue for the first half rose 5 percent on a constant currency basis to $2.75 billion.

Under pressure from stiff competition in the Unite States, and hurt by the shutdown of Australia's car manufacturing sector, the company maintained its full-year revenue growth to be in mid-single digits and expects underlying profit growth slightly higher than the revenue growth.

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