Fisher & Paykel H1 Profit Dips Nov 10, 2006

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New Zealand home appliance maker Fisher & Paykel Appliances said its first-half profit dipped on higher costs and a stronger local currency, but it maintained a forecast for better full-year profit, driving its shares up 7 percent. The company said it was struggling with a high exchange rate and raw material costs, but sales were steady, according to Reuters.

April to September net profit fell 2.3 percent to NZ $25.6 million (approx. U.S. $17 million) from NZ $26.2 million (approx. $17.4 million) a year earlier, but in line with market expectations.

The kitchen and laundry appliance maker reiterated previous guidance for annual profit at the lower end of a NZ $75 to NZ $80 million (approx. $49.9 million to approx. $53.2 million) range, up from NZ $63.9 million (approx. $42.5 million) last year, and above an average forecast of NZ $73.7 million (approx. $49 million) from analysts surveyed by Reuters Estimates.

F&P Appliances, whose largest markets are New Zealand, Australia and the U.S., has said the expected profit rise is based on a slightly weaker New Zealand dollar.

CEO John Bongard said the company was looking to expand its distribution in North America and Europe. "At the moment in the United States we're only actively in around 26 percent of the total number of stores that sell appliances so there's plenty of scope there."

Sales growth in New Zealand was expected to come from the introduction of new products, he said. Known for its double-door dishwashers and Smart Drive clothes washers, F&P said it held or grew market share in all its major markets in the first half.

The company said increased sales in all markets and a strong focus on cost cutting produced a 20 percent increase in operating profit to NZ $54.2 million (approx. $36.1 million) from total revenues of NZ $696.7 million (approx. $463.4 million), up 22 percent on last year.

Over the past year the company has been shifting some production facilities to the U.S. and China to lower costs and be closer to key markets. In June, it bought Italian cookware company Elba from De Longhi Group.

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