Ansell profits up but rubber gloves are off
CONDOM and rubber gloves maker Ansell is steadily abandoning natural latex as soaring raw material prices continue to unsettle the company.
CONDOM and rubber gloves maker Ansell is steadily abandoning natural latex as soaring raw material prices continue to unsettle the company.Ansell said yesterday that surging latex prices had wiped about $50 million off its earnings for the year to June 30. Nevertheless, the Australian-listed, US-based company's net profit rose 3 per cent to $122.7 million and tipped its earnings per share to rise as much as 12 per cent this financial year.Chief financial officer Rustom Jilla said Ansell was shifting away from products where natural rubber was the main cost driver. It had cut its exposure by 4 per cent in the past year.Morningstar analyst Nathan Zaia said Ansell had not rushed to fight escalating latex prices, adopting its strategy in 2008.Ratings agency Standard & Poor's was also impressed and said Ansell's strong market position, meaningful business and geographic diversity, would "mitigate ongoing input cost pressures and provide stable earnings growth for fiscal 2012".Chief executive Magnus Nicolin said the company had achieved double-digit sales and profit growth after it reorganised into a global company.Ansell's industrial division carried the bulk of the growth, generating $US471.6 million ($A455.2 million) in sales or 39 per cent of total revenue.Mr Nicolin said the sexual-wellness division was improving, especially in emerging markets, with sales growing at 18 per cent, while the new verticals and medical divisions were held back.Ansell was looking at acquiring more companies and was assessing takeover targets outside condom and rubber glove manufacturing. "It needs to fit the same end user, the same buyer and same process, so we can leverage the fixed-cost infrastructure," he said.Ansell last month bought US surgical safety products maker Sandel Medical Industries for $US13.5 million, Mr Nicolin's first acquisition since his appointment in February last year. Ansell will pay a 19? dividend, up 1.5? on the previous year. Its shares rose 54?, or 4.1 per cent, to $13.68.