Appliance maker H1 earnings expected to double

By NZPA

Monday 12th August 2002

Fisher and Paykel Appliances is expecting strong first half year earnings which more than double the corresponding period last year.

The company told its annual meeting today that it was expecting a strong half year result to the end of September, forecasting a group net profit after tax of over $30 million.

That included a $5 million dividend paid by Fisher and Paykel Healthcare in June, and compared to $12 million for the equivalent period last year.

First quarter earnings were strongly ahead of budget expectations, underpinned by strong consumer demand in the New Zealand and Australian markets.

Managing director John Bongard told shareholders that the company was making good inroads into all its markets, although trade in its British and European markets was slightly lower than expectations, primarily due to delays in the production of its hero product the DishDrawer for these markets.

Special water softeners essential for the European market were taking longer than expected to manufacture , he said.

Trade in the fertile US market had slowed due to sharemarket turmoil, but the company was forecasting a 20 percent improvement on last year's result by the end of the fiscal year, as new product lines are introduced to market.

F&P Appliances has put in place substantial hedging to cushion the impact of the rise on the kiwi-aussie cross rate, although it only lasts until March next year.

Mr Bongard said the company's import and export currency flows in US dollar terms were closely matched, providing a natural hedge. But as a major exporter to Australia, it had taken a hit on the kiwi-aussie dollar cross rate and, in the long term, margins would be affected if the rate did not decline from A86c.

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