Fisher & Paykel Appliances Holdings Ltd. reported a net profit after tax of NZ$976,000 (approx. US$757,000) for the six months ended Sept. 30, 2011, compared to $11.3 million in the same period a year ago. F&P also reported increased investment this year in new products.
While not satisfactory, said Managing Director/CEO Stuart Broadhurst, "It reflects the reality of tough economic conditions, high raw material prices, and depressed white goods spending, especially in Australasia, North America, and Europe."
He added, "We do see positives in our result from our Appliances global manufacturing strategy, a strong contribution from the Finance business, and lower interest costs due to lower debt levels."
The Group has also been able to reduce net debt by $6 million since March 2011 to NZ$94 million. Broadhurst said F&P's balance sheet was in good shape and, along with a recent renewal of financing, the company was well-positioned and had the funding in-place for new component and technology contracts and future product development."
The Appliances business had a loss before interest and tax of NZ$2.4 million compared to earnings of $6.8 million last year.
Capital expenditure this year so far is NZ$22 million, up from NZ$10 million at this time last year. That money is going into several new core Appliances lines, some of which have been launched and others still in the product development pipeline.
"Global brand unification is an important part of ensuring Fisher & Paykel continues to be a strong and appealing brand for our customers. This strategy also made significant headway in the past year as we increased our presence in key markets," Broadhurst said.
Market conditions are expected to remain challenging and unpredictable, F&P said, and it noted that the company usually makes the majority of its annual earnings in the second half of the fiscal year.
F&P is concerned about economic conditions in key markets, especially in Australia, and noted that it is unclear how volatile conditions in Europe will impact Australasian (Australia and New Zealand) markets.
The F&P board expects full-year earnings for the Appliances business to be about NZ$10 million (normalized operating earnings before interest and tax). (Group earnings will be about NZ$42 million, with Appliances at around $10 million and Finance at around $32 million).
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