Monday 18th August 2008
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The company may post a loss of as much as NZ$10 million in the six months ending September 30 and full-year profit may be at the low end of analysts' projections, the company told shareholders at their annual meeting in Auckland.
The stock fell to NZ$1.87, bringing its decline this year to almost 40%, while the benchmark NZX 50 fell 16%. The company has relocated plants to lower-cost economies such as Thailand and also to the US and Europe to be nearer customers.
Managing director John Bongard said the "headwinds continue" for Fisher & Paykel. Growth is being hindered by high raw material costs, a strong New Zealand dollar and high interest rates, the company said today.
The company's strategy to relocate plants would achieve annual cost savings of about NZ$71 million. Trading in New Zealand is down 7% to 10% and the company is retaining market share, it said. In Australia, the market is uncertain and slowing, while the US market is "depressed." Europe was faring best, with sales steady.
The company is considering a sale of capital notes as part of its financial management, it said today. The company's finance arm faces increasing interest costs though it has a relatively benign reinvestment rate on its debentures of 60% to 65%, it said.
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