An Australian car part maker has suffered a $320 million stock market crash as the company posted a 17.2 per cent profit drop and a weaker Australian dollar.
ARB Corporation on Tuesday revealed its sales fell one per cent during the first six months of the 2026 financial year.
The only Australian state where sales rose was Western Australia, while export sales rose 8.8 per cent and the US market grew by 26.1 per cent.
ARB’s profit drop was driven by reduced sales margins due to a weaker Australian dollar.
The poor performance has sparked backlash from investors, with the company’s share price diving 15.3 per cent and wiping $320 million off its market capitalisation.
Most of ARB’s goods are manufactured in Thailand and the stronger baht compared to the Australian dollar bumped up the costs of ARB’s Thai-manufactured products.
Despite the weaker performance, ARB’s dividend will remain flat at 34 cents per share.
Citi analyst Sam Teeger said ARB’s subdued performance could force it to reconsider internal changes at the manufacturer.
“We are debating whether ARB would benefit from reducing the dividend and investing more in engineering capability, actively seeking new OEM (original equipment manufacturer) partnerships, ramping up marketing, accelerating initiatives to resolve fitment challenges and/or reducing price to drive demand,” Mr Teeger said.
ARB’s chairman Robert Fraser said the company’s result was achieved in “challenging conditions both locally and internationally”.
“With the Australian dollar at historical lows against the Thai Baht, softness in new vehicle supply in Australia and other parts of the world and reduced consumer sentiment,” Mr Fraser told investors.
“Nonetheless, the company’s longer-term future remains positive as OEMs globally continue to develop and expand their 4×4 SUV and pick-up vehicle models.”
The company said its order book “remains healthy” with daily sales close to historical highs.
ARB also has a positive outlook for the export market despite some regional challenges due to new vehicle supply of key models.
The company’s share price has dived by nearly 45 per cent over the past 12 months.
