ISS net falls 69% on forex losses
- 26 August, 2011 09:26
Industrial software developer ISS Group (ASX:ISS) booked a steep 69 per cent slide in FY11 profit, as the company was hit hard by exchange rate losses.
ISS announced a net profit of $1.1 million, on 6 per cent lower revenue of $17.6 million.
The impact of exchange rate conversions grew 84 per cent from the year before, with ISS estimating that revenue was impaired to the tune of around $948,000. Forex losses were also blamed for a 5 per cent increase in total costs to $16.2 million.
The falling greenback accounted for the majority of the forex impact — US dollar denominated sales represented more than half of ISS's total revenue for the year.
Despite the declines, ISS' financial report states that the board “approaches the 2012 year with cautious optimism.”
The company's sales pipeline “remains strong,” and the board has taken action to minimize its foreign currency exposure, the report states. In light of the resources boom, ISS will aim to grow its revenue in Australia over the coming months.
But it adds that the instability of global financial markets — and particularly foreign currencies — will continue to have an impact on the awarding of new contracts during the period.
ISS shares closed out Thursday's trading unchanged at $0.115.
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