Ansell downgrades profit, blames poor economic conditions

Ansell has slashed its profit expectations by almost 10 per cent, blaming poor economic conditions for discouraging its customers from buying its protective equipment.

The $3 billion company is well known for its condoms, but makes the majority of its earnings from supply gloves and other protection to industries such as oil and gas, manufacturing and healthcare.

Ansell is well known for its condoms, but makes the majority of its earnings from supply gloves and other protection to ...
Ansell is well known for its condoms, but makes the majority of its earnings from supply gloves and other protection to industries such as oil and gas, manufacturing and healthcare. Photo: Nic Kocher

In a statement released on Wednesday night, after the close of trading, Ansell said sales in January had been lower than anticipated "as customers deferred or reduced orders to adjust inventory levels amid a general weakening in the external economic environment."

"In addition, continued currency and economic volatility presents challenges to forecast visibility, particularly in emerging markets," the company said.

The company is set to announce its interim profit results next Monday, but said it now expected to report full-year earnings per share in the range of US95¢ to $US1.10. Last August Ansell gave guidance for full-year EPS of $US1.05 to $1.20.

Ansell shares have not been immune to 2016's global market rout that has been spurred by collapsing commodity prices and concerns about slowing growth in China. The stock has fallen 13 per cent in the year-to-date and closed at $18.65 on Wednesday.

The stock is down 38 per cent from a 12-month high of $30.21 hit last April.

Ansell said it expected sales in the six months ended December 31 to be down 7 per cent to $US785 million on the prior corresponding period. Although the figure would be "on par... after adjusting for currency changes."