By Claire Reilly

SYDNEY, NSW: Fisher & Paykel has staged a massive turnaround in fortunes, releasing a statement showing a Reported Net Profit of $33.5 million for the financial year ending 31 March 2011.

These results stand in stark contrast to the loss of $83.3 million reported at the end of the 2010 financial year. Furthermore, F&P reported a decrease in net debt of $73 million from the previous financial year, down to $100 million.

According to the results announcement, supplied today to the Australian Securities Exchange, “the improved result was attributed to improved operations, lower interest costs and the Group not having substantial abnormal charges compared to the previous year.”

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In appliance sales, “gross margin on sales increased by 2 per cent to $292 million due to lower warranty costs,” while “gross margin as a percentage of sales increased from 27.9 per cent to 30.3 per cent,” the report read.

However, the appliance industry has not avoided the common problem of price erosion plaguing the consumer electronics industry at the moment. While the company experienced higher volumes of sales, these were offset by price reductions which resulted in a 5.5 per cent decrease in operating revenues according to the report.

The time period covered by the figures, 1 April 2010 to 31 March 2011, represented the first full year of F&P’s close partnership with Chinese manufacturing brand Haier.

“The Company has continued to make good progress in strengthening the relationship with Haier, including the signing of a long term technology supply agreement in February 2011,” read the report. “This contract will generate revenues of between $20 million and $35 million per annum. Earnings are expected to commence in the first quarter of the 2013 financial year.

“Sales of Fisher & Paykel branded products in China have commenced, however delays in product approvals for certain products including gas cooktops, has resulted in sales being slower than expected. In addition, the full range of Fisher & Paykel branded products for China will not be completed until December 2011.”

Although the relationship between F&P and Haier is only in its early stages, the marked turn around in reported revenue seems to indicate a positive future.