THE red ink continues to flow at Billabong with the embattled surfwear group posting a $126.3 million loss for the December half year.

And, in a major admission by the Gold Coast-based company, the departure of former US boss Paul Naude appears to have caused operational difficulties for Billabong which has weighed heavily on its latest earnings result.

The loss, which compares with a $536.6 million deficit a year ago, has been expected in the wake of continued restructuring within the group.

Shareholders have been unable to react to the news as the company’s shares have been placed in a trading halt pending an announcement by the company next week.

Over the past two years, Billabong has been rocked by a series of takeover bids, including one led by Naude, as well as three changes at the helm in the past two years.

Billabong, under the stewardship of CEO Neil Fiske, has embarked on a new turnaround strategy that may include the company offloading its online businesses.

The strategy has been labelled by Fiske as “fewer, bigger, better” which will focus the group on its three big brands – Billabong, Element and RVCA.

Fiske, who was anointed CEO following a $US360 million refinancing deal brokered through the Centerbridge Oaktree Consortium last year, says it will be a “complex” and “difficult” turnaround for the company.

“The results announced today reflect a turbulent period for the company including significant refinancing and restructuring costs,” Fiske says.

“The period of uncertainty before the Centerbridge Oaktree Consortium refinancing resulted in operational instability in the Americas which has weighed on the result.

“We moved quickly to address leadership and talent gaps, restructuring poorly performing parts of the business and get back on the front foot with our sales force and key accounts.”

Naude, the long-time boss of Billabong’s US arm, left Billabong in August after failing to secure the board’s support for an alternative refinancing deal.

Since then, Naude has established a new global surfwear brand, known as Vissla, through a new parent company Stokehouse Unlimited.

Vissla’s Australasian operations are based at Burleigh Heads through local partners Brad Bricknell, Peter Casey and John Mossop, all of whom are former senior Billabong staffers. (Read the full story in this month’s edition of Gold Coast Business News.)

The instability in the American market for Billabong is reflected in a 45.1 per cent fall in the company’s EBITDA (earnings before interest, tax, depreciation and amortisation) to just $9.7 million.

Billabong says the Americas continue to remain tough in the current half.

The latest half-year results also reveal a widening of EBITDA losses in Europe to $3.4 million, up from a $2.3 million loss a year ago.

Australasia remained robust with EBITDA up 6.1 per cent to $34.4 million.

Combined, Billabong’s group EDBITDA is $42.4 million for the six months to the end of December, down 14.1 per cent from a year earlier.

However, Billabong’s latest results have been bolstered by a falling Australian dollar. Taking this into account, EBITDA in constant-currency terms is actually down 19.5 per cent from a year earlier.

Group sales totalled $667 million, down 4.6 per cent from a year earlier, but these figures include sales from the Nixon subsidiary which has since been sold.

Sales from continuing operations are up 3 per cent to $576.8 million.

In a bid to ease its debt load, Billabong today also launched a $50 million three-for eight rights issue priced at 28c a share.

The rights issue had been previously flagged by the company.

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