Currency exchange 'affecting profits'

Company profits are being affected by currency exchange rates, it has been suggested.

Drilling company Helmerich & Payne and beauty conglomerate Avon Products have both released recent profit reports revealing substantial losses attributed to a currency devaluation.

Venezuela's bolivar currency was devalued this year but it has also slipped of its own accord on the free markets.

Helmerich & Payne experienced a 55 per cent drop in second-quarter profits due to the devalution, the Associated Press reported.

Meanwhile, the currency's decline contributed to Avon's 64 per cent drop in first quarter earnings for 2010.

Andrea Jung, chairman and chief executive of Avon, commented: "We are pleased that we are benefiting from the underlying strength of our global portfolio and cost reduction programs.

"This enabled us to deliver a 110-basis point improvement in operating margin in the quarter, excluding the impact of Venezuelan special items and restructuring costs."

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Posted by Sarah Pitton