Currency gains by Fisher and Paykel Healthcare (FPH) in the year to March helped the company report an improved after-tax profit after overcoming flat sales and a lower operating profit.
Analysts were watching closely for how well FPH had managed its foreign exchange hedging but the accounts released yesterday showed the company made a gain of nearly $3.67 million in the year compared with just $520,000 in the previous corresponding period.
The operating profit for the period was $275.04 million, down 1% on the previous corresponding period (pcp). Operating expenses increased 2% to $184.6 million and the operating margin fell to 18% from 19.3% in the pcp.
The company spent 7% more on research and development in the year.
However, lower financing income, lower finance expense and a substantially higher gain on foreign exchange helped the company report a nearly flat before-tax profit of $64.1 million.
Last year, the company took a hit of $11.5 million after legislative tax changes which dropped its reported profit to $52.5 million compared to $64.1 million.
A 7c per share dividend imputed at a 28% tax rate was declared.
Chief executive Mike Daniell said the company derived about 52% of its operating revenue in US dollars.
In US dollars, the company's respiratory and acute care product group's (RAC) revenue increased by 18% and obstructive sleep apnoea (OSA) product group revenue increased by 7% over the pcp.
Strong growth in the RAC group was driven by rapidly growing acceptance of FPH's products which were used in applications outside of intensive care ventilation.
Operating revenue from consumables used in those new applications increased 25% in constant currency terms.
In the OSA product group, constant currency flow generator revenue growth improved 18% on the previous period. Mask revenue reduced 4% in constant currency terms but began to improve late in the year following the launch of the first of the innovative new masks, Mr Daniell said.
In his outlook, Mr Daniell said FPH expected underlying revenue growth to accelerate this year, particularly in the second half, as new products were introduced around the world.
"We also anticipate a continuation of strong growth in demand for our products, which are used in a broad range of respiratory and surgical applications.
"We expect to continue to improve constant currency operating margin, with faster growth in higher margin differentiated products, cost reductions and other efficiencies."
Exchange rates continued to be volatile, he said.
For the 2013 financial year, based on an exchange rate of US75c to US80c for the New Zealand dollar for the remainder of the year, he expected operating revenue to be in the range of $540 million to $560 million and the reported profit to be in a range of $62 million to $79 million.
