Australian dollar Essay

2303 Words Apr 21st, 2014 10 Pages
Question 2
a) A fall in the value of the Australian dollar (AUD) against the U.S. dollar (USD) benefit Billabong in two folds, strengthened price competitiveness and translation advantage. Firstly, the Americas segment accounts for about 50% of Billabong’s sales revenue in 2008 and 2009. (Appx.1) In case of depreciation of AUD against USD, the price of imported surfwear to the U.S. in terms of USD will decrease. The US importers demand more for Billabong’s products. The sales increases from the strengthened price competitiveness. Secondly, when Billabong received payment from the importers, it will translated back into AUD for use in Australia. As AUD depreciate, the receipt in USD can be translated into more AUD than before, bringing
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Retrieved November 28, 2013, from http://media.corporate-ir.net/media_files/IROL/15/154279/20110819_CEO_&_CFO_Full_Year_Results_Presentation.pdf
Billabong International Limited. (2009, December 31). 2008-09 Half-Year Result Overview. Retrieved November 28, 2013, from http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzY2Nzc3fENoaWxkSUQ9MzYxOTIxfFR5cGU9MQ==&t=1

Appendix 1

Segment revenues

2009 ($’000)
2008 ($’000)
2013 ($’000)
Australasia
444260
412693
471764
Americas
836836
620487
636764
Europe
387966
314438
232064
Third party royalties
2189
1853
2759

1671251
1349471
1343351

Appendix 2

USD/AUD
% change
Jun 2008
1:1.04

Dec 2008
1:1.41
35.6%

Sale in Americas
% change
Half year 2009
$385M
33.9%
Constant currency: 16.3%
Full year 08/09
$836.8M
34.9%
Constant currency: 12.1%

Appendix 3

Aussie dollar set to struggle in 2009

The Australian dollar looks set to travel a wide trading range in 2009, as the currency is buffeted by the global financial crisis slowdown, falling commodities prices and a slump in economic growth at home and aboard.
The domestic currency also risks falling to a new all time low, particularly if the pace of growth in regional Asia countries and China slows more rapidly than expected, delaying a recovery in Australia.
The Australian dollar was trading around 67.83 US cents on Christmas eve 2008, down 23

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