KEY POINTS:
The weakened New Zealand dollar could help lift Fisher & Paykel Healthcare's operating revenue this year to a record $450 million.
The medical equipment manufacturer yesterday reported a 51 per cent spike in first-half net profit, thanks to strong growth in respiratory and acute care product sales.
Operating revenue for the six months ended September 30 was $213.3 million - up 24 per cent - translating to profit after tax of $28.3 million. Operating profit grew 48 per cent to $46.1 million.
Fisher & Paykel Healthcare shares closed at $3.08 yesterday, down 4c.
Chief executive and managing director Michael Daniell said sales had not suffered in spite of the turmoil engulfing global markets.
"Typically the medical device industry, particularly one which is so heavily based on consumables as ours is, is pretty buffered from economic cycles.
"The reality is patients need treatment and a big chunk - more than 70 per cent - of our revenue comes from ongoing supplies for treatment of patients."
The company estimates that at an average New Zealand/US dollar exchange rate of 0.55, operating revenue for the year will rise 25 per cent above last year's result to approximately $450 million.
Operating profit was likely to be around $100 million, with profit after tax of approximately $60 million.
This will represent a rise in full year tax paid earnings of about 70 per cent on last year's net profit of $35.3 million.
Its profits last year were punished severely by the weak greenback and strong kiwi, as the company derives much of its revenue in US dollars.
Goldman Sachs JBWere analyst Marcus Curley said the half year results showed that the business was likely to remain robust.
"It's one of the few exporting stories that's actually able to convert New Zealand dollar weakness into additional profits without seeing any offsetting deterioration in their existing business."
For the half year, revenue from respiratory and acute care product sales increased 36 per cent in US dollar terms while obstructive sleep apnoea product revenue grew 14 per cent.
"Demand for our respiratory humidifier systems was exceptionally strong in the first half as we delivered substantial orders for hospital group purchasing organisation contracts in the United States and filled respiratory consumable back orders," said Daniell.
The company was also pushing ahead with plans to expand manufacturing operations overseas. It has a shortlist of locations - sites previously cited include China, Thailand and Mexico - to complement its East Tamaki base, which was expected to reach capacity in two years.
Daniell said manufacturing overseas was likely to start next year.
An interim dividend of 5.4c per share was declared.
