F&P profit erodes despite sales of more than $1 billion

By Adam Coleman

AUCKLAND: Fisher & Paykel (F&P) has released its annual report, revealing group profit after tax declined to $63.9 million from $68.6 million the previous year, despite appliance sales for the group that surpassed $1 billion for the first time.

Despite the record sales of more than 1.3 million appliances, Fisher & Paykel CEO and managing director, John Bongard conceded it has been a tough year for the group.

“The past 12 months have been a very demanding period for the company. A continuation of very high raw material prices, as well as an unfavourable exchange rate for the New Zealand dollar, contributed to an erosion in our profitability.

“The Finance Group faced difficult trading conditions and its contribution of $36.4 million before acquisition interest, tax and amortisation was slightly down from the previous year.

“Earnings were affected by lower yields and significantly higher interest on borrowings, resulting in lower margins.”

In the report F&P chairman, Gary Paykel, said total revenue for appliances increased by 18.4 per cent over the previous year “despite contracting markets in both New Zealand and Australia”.

“Total appliance unit sales increased by five per cent, with substantial growth in North America. This market is now our largest revenue generator,” Paykel said.

F&P also recorded record unit sales in the USA, New Zealand and Singapore.

According to Paykel the relocation of the Smart Drive washer line from Brisbane to Clyde, USA during the year was swift and the company will now expand the factory.

“Further expansion is planned for the facility during the upcoming year, with two motor lines and the Smart Load dryer line also destined for the Clyde plant,” he said.

The report also revealed F&P has commenced distribution of the Whirlpool brand in Singapore, further developing its alliance with the world’s biggest appliance manufacturer.

“[Whirlpool] products are complementary to our own range and present a further opportunity for sales growth in this offshore market,” said Bongard.

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