F & P Appliances profits hit by writedowns, weak sales

Fisher & Paykel Appliances reported a first half net loss of $82.4 million, affected by write downs and weak sales.

The company today said its normalised loss after tax was $847,000 for the six months to the end of September, compared to a profit of $22.4m a year earlier. Revenue from ordinary activities was down 16.3 per cent to $584m.

An improved second half performance was expected with the full year normalised net profit to be within a range of $16m to $23m.

The bottom end of the range was down from $20m in guidance given by the company in September, due to volatile market conditions, Appliances' new chairman Ralph Waters said.

The full year net result after tax and abnormals was forecast to be a loss of about $58m to $65m.

Market conditions in the United States were particularly difficult during the first half, due to higher levels of competition and the company's significant exposure to the severely depressed high end of the appliances market, said Waters.

As a consequence of Appliances' under performance in North America, a one-off charge of $55.6m after tax was made for asset impairments and fair value write downs.

Other one-off costs of $26m after tax were incurred, substantially due to the completion of a global manufacturing strategy, staff retrenchment and debt restructuring costs, net of a gain on the sale of the company's East Tamaki property of $2m after tax.

The group had a solid start to the second half. Appliances' earnings were close to forecast in October and sales volumes in November were expected to finish in line with forecast, Waters said.

No dividend was declared, compared to 5c a year earlier.

Appliances shares were down 5c to 60c in early trading.