WELLINGTON - New Zealand home appliance manufacturer Fisher & Paykel Appliances, which is 20-percent owned by China's Haier white ware maker, has bounced back to a profit after reporting a loss of NZ$83.3 million ($67.49 million) last year.
The company Friday reported an audited group net profit after tax of NZ$33.5 million for the financial year ending March 31.
In a statement to the New Zealand Stock Exchange, the company said the results were attributed to improved operations, lower interest costs and "not having substantial abnormal charges compared to the previous year".
Net debt was reduced by NZ$73 million to NZ$100 million, due to strong operating cash-flows and property sales, and interest costs were down 46 percent to NZ$15.4 million.
Group revenue fell by 4 percent to NZ$1.12 billion,said the statement.
The appliances business reported normalized operating earnings before interest and tax for the full year of NZ$23.7 million, with 71 percent of earnings in the second half. Last year's full-year earnings before interest and tax were NZ$29.4 million.
The group's finance business reported a strong result with full year earnings up 20 percent to NZ$34.7 million.
The company had not declared a dividend for the 2011 financial year "due to an increase in growth-related capital expenditure for the coming year and a cautious approach to credit markets", it said.
The company had experienced "challenging trading conditions" in North America and sales were down in New Zealand due to a transition to new distribution arrangements, but these factors were offset by improved sales in Australia.
"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. This contract will generate revenues of between NZ$20 million and NZ$35 million per annum.
Earnings are expected to commence in the first quarter of the 2013 financial year," said the statement.
Sales of Fisher & Paykel-branded products in China had begun, but delays in approvals for certain products, including gas cooktops, had resulted in sales being slower than expected.
"The full range of Fisher & Paykel-branded products for China will not be completed until December 2011," said the statement.
The business had laid the foundation for future growth and would explore further opportunities to leverage its technology capabilities, including the development of its new compressor technology, which, it claimed, was 35 percent more energy efficient than existing technologies.
However, market conditions for appliances were expected to remain challenging over the coming year, with rising costs, particularly raw materials.
"The appliances' business is committed to pursuing opportunities to growing component and technology revenues. For this reason, capital expenditure is expected to be approximately NZ$44 million in the 2012 financial year. The business is investing primarily in new product development and the technology supply agreement with Haier," said the statement.
Directors were committed to resuming dividends as soon as financial and operating conditions permitted.
An update on trading and market conditions would be provided at the annual shareholders meeting in August.
