Last week the Australian dollar continued its fall and closed the week at 73.3 U.S. cents. This brought its decline since Donald Trump's surprise election victory to a huge 5.8%.
With an interest rate rise in the United States in December now looking a near certainty, I don't believe it will be long before we see the Aussie dollar falling below 70 U.S. cents again.
Whilst this is not great news for importers such as Reject Shop Ltd (ASX: TRS) and Nick Scali Limited (ASX: NCK), companies that derive a significant portion of their revenue from U.S. operations will be watching the Australian dollar's fall with interest.
Here are two companies which could see profits boosted by the weaker Australian dollar:
Ardent Leisure Group (ASX: AAD)
Ardent Leisure's thriving U.S. operations make the company a long-term buy and hold investment in my opinion. In FY 2016 the company's US-based Main Event centres contributed almost half of its EBITDA on a pro-forma basis. In local currency revenue from the segment grew 21% year on year to US$174 million. During the year Ardent Leisure opened seven new centres, bringing the total to 27. With the company believing it can open 200 centres in total, it is clear to see just how much growth there could be ahead. But with the repercussions of the tragic incident at Dreamworld still unknown, investors may want to hold off investing until the matter has been resolved.
Aconex Ltd (ASX: ACX)
In FY 2017 this software-as-a-service company has forecast revenue of $172 million to $180 million, which will be an increase of between 39% and 46% on FY 2016's $123.4 million. But a significant depreciation in the Australian dollar could lead to revenue growth in excess of current forecasts in my opinion. Just over 17% of revenue is derived from the Americas, but I wouldn't be surprised to see that change in the year ahead. As the company's cloud-based collaboration tool is used by project teams in the construction, infrastructure, and energy and resources sectors, I believe the company could see demand surge if Donald Trump follows through on his infrastructure spending promise.
