F&P Healthcare says profit will rise on respirator sales

Friday 22nd August 2008

Fisher & Paykel Healthcare said first-half profit will rise about 38% on demand for its respiratory and acute care products.

Operating profit is expected to be about NZ$43 million in the six months ended September 30 on revenue of about NZ$210 million, managing director Mike Daniell told shareholders at their annual meeting today.

"Demand for our products continues to grow at a rate which would see the business more than double in size over the next five years," Daniell said.

The company gets about 58% of operating revenue in US dollars, meaning its sales are eroded by a high kiwi currency when they're brought home. Still, its breathing masks are tapping a global market for products to treat the condition sleep apnea that it estimates will grow to US$2 billion a year.

Sufferers of sleep apnea momentarily stop breathing while asleep, a condition that has been linked to heart disease.

Much of F&P Healthcare's US dollar hedging is by way of 'collar options' which offer protection above 76 US cents though limiting the benefits of the currency falling below 70 US cents, Daniell said.

New Zealand's dollar recently traded at about 71.80 US cents. Operating profit fell 27% last year, when the kiwi gained about 15% against the US dollar.

Shares of F&P Healthcare fell 0.3% to NZ$2.91 today. The stock has declined 15% this year, about matching the NZX 50 Index.

By Jonathan Underhill

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