KEY POINTS:
Foreign exchange rates have taken a bite out of revenue at Fisher & Paykel Appliances, but the listed whiteware maker still increased its net profit.
Net profit for the six months ended September 30 was $29.3 million, up from $25.1 million the previous year, with revenue of $693.1 million down from $696.7 million.
Chief executive John Bongard said the exchange rate cut $52.6 million off revenue.
"Once you get over the fact that the rates are unhelpful, it's this volatility that we're going through which makes it impossible.
"I think it's time everyone sat down and had a real good think about it," Bongard said.
The company had hedged its net exposure to the Australian dollar at about 85.4c for about 90 per cent of the rest of the year, while the balance of imports and exports meant it was fairly net neutral in US dollar terms.
Goldman Sachs JBWere analyst Rodney Deacon said the result was in line with expectations.
The share price closed up 7c yesterday at $3.44.
Earnings for the half-year before tax, interest and one-off items were up 6.1 per cent at $56.2 million - driven by the appliances division and following from increased sales, new products and cost cutting, the company said.
Australia was the largest market for appliance sales at $208.8 million, followed by the United States on $205.9 million and New Zealand on $121.7 million.
The relocation of the laundry products and electronics factories to Thailand resulted in a one-off cost of $11.4 million before tax, while the sale of land and buildings in Auckland generated a pre-tax profit of $5 million.
Adjustment of the deferred tax liability reflecting the lower company rate also cut the tax bill by $2.6 million.
The company did not provide any guidance on profit for the full year.
"As you can see from the many different parts of this business in putting a forecast out, we've got to be able to accurately assess raw material prices, we have to accurately assess where the currency is going to end up and we have to accurately assess all of the markets that we are in and what's going to happen in each of them," Bongard said.
"And frankly, it's sort of got us into trouble in the past ... because it's impossible to get right."
The relocation of laundry and electronics manufacturing to Thailand was on track and would reduce the company's exposure to the Australian dollar, he said.
"Every facility we have in the world - whether they're facilities in Italy, the US, Australia or New Zealand - under these conditions are under constant review, and that process continues."
The market in New Zealand was expected to continue to weaken in the second half as high interest rates took effect.
The company had gained some good market share in Australia, where sales had been strong, with a lift expected after the federal election later this month.
Meanwhile, the US market continued to be depressed, with intense competitor activity and mixed predictions for the rest of the year; while sales in Europe and the rest of the world were expected to grow.
The price of steel, plastic, chemicals and copper remained high and unpredictable.
Increases in the price of oil would put some pressure on oil-based plastics, and steel markets had been somewhat uncertain, Bongard said.
"One thing that looks to be quite sure is that we will not be facing those huge price increases that we've had to endure over the last two or three years, albeit steel markets are quite firm and one would expect maybe slight increases there."
