ARB Corporation (ASX:ARB) shares plummeted over 14% in early trade after the 4WD accessories specialist reported a 17.2% drop in first-half net profit to $42.2 million.
Despite revenue remaining relatively flat at $358 million—a marginal 1% dip—the company was hammered by a "perfect storm" of economic pressures, including a strengthening Thai baht and reduced factory overhead recoveries that aggressively squeezed margins.
While export markets provided a silver lining with 8.8% growth fuelled by a 26.1% growth in the US, this was overshadowed by a 38.2% slump in original equipment manufacturer sales and cooling demand in the core Australian aftermarket.
Although the board maintained a fully franked interim dividend of 34 cents per share, analysts have begun questioning the payout strategy.
At the time of reporting, ARB Corporation's share price was $20.88.