Sharechat Logo

Babcock & Brown profit drops 40%

Monday 11th August 2008

Text too small?
Babcock & Brown, Australia's number two manager of publicly traded funds, said first-half profit fell as much as 40% on the slumping value of property and investments.

Net income declined from A$250 million a year earlier, the Sydney-based company said in a statement. The amount of the decline ranged from 25% to 40% and the company is still concluding its results for the period, it said.

The reduced profit reflects non-cash impairment charges for investments in real estate and structured finance assets. Excluding the provisions, earnings rose from the same period last year, it said.

"The volatile global capital market conditions have made and continue to make business conditions uncertain and forecasting in the short-term difficult," said chief executive Phil Green.

Banks and securities firms globally have reported some $468 billion in losses and writedowns since the sub-prime meltdown began last year, according to Bloomberg. The credit squeeze has hurt investment companies such as Babcock & Brown by driving up borrowing costs.

Shares of the company dropped 8.7% to A$6.21 and have handed investors a 73% loss in the past 12 months.

The charges will reduce full-year earnings, which will lag behind last year's A$643 million, it said today.

This month, the investment company's energy and transport fund said it would seek partners to buy as much as 50% of WestNet Rail and New Zealand electricity distributor Powerco. Proceeds will help reduce debt, it said.

By Jonathan Underhill



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report