SYDNEY (Reuters) - Australian rubber products maker Ansell Ltd <ANN.AX> on Monday posted a bigger-than-expected profit drop caused by skyrocketing rubber prices and one-off transaction costs, sending its shares skidding to a one-year low.
Along with tyre makers such as Bridgestone <5108.T> and Sumitomo <8053.T>, Ansell is one of the best-known companies to have been squeezed by soaring input costs after benchmark rubber futures <JRUc6> hit their highest level in more than five years in January.
Net profit dropped 7.2 percent to $147.7 million for the year to June 30, missing an average estimate of $155.6 million from 7 analysts polled by Thomson Reuters I/B/E/S.
"We have put through price increases which we're now beginning to benefit from," Ansell Chief Financial Officer Neil Salmon told analysts.
But the company did not expect to "catch up" the earnings shortfall, he said.
Natural and synthetic rubber account for about half of Ansell's raw material mix, according to an investor presentation published on Monday.
Shares in the company shed as much as 5.8 percent to A$20.30 in early trade, before recovering to A$21 by lunchtime. The benchmark S&P/ASX 200 index <.AXJO> rose 0.6 percent.
Ansell also booked a total of $13.7 million in one-off charges stemming from the sale of its condom business in May and from its acquisition of glove-maker Nitritex in January.
Earnings-per-share (EPS) were $1.01, at the bottom of the company's full-year guidance range of between $1.00 and $1.12. Its EPS outlook of between $0.91 to $1.01 was softer than market expectations.
"Input prices go up and down, and there are periods when it's higher and they wear it, like now," said Jason Beddow, Managing Director of Argo Investments, which owns a stake in Ansell.
Ansell sold its condoms business for $600 million to China's Humanwell Healthcare Group Co Ltd <600079.SS> and CITIC Capital China Partners and expects to book a $365 million after-tax gain next year on the sale.
The company declared a final dividend of 23.75 cents per share, up from 23.5 cents a year ago.
(Reporting by Tom Westbrook in Sydney and Rushil Dutta in Bengaluru; Editing by Stephen Coates)
