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F&P Appliances to take $26.5 million impairment charge in full-year results

Monday 10th May 2010

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Fisher & Paykel Appliances Holdings, the only home appliance maker on the NZX, plans to take impairment charges of up to $26.5 million in its full-year results.

Shares of FPA fell 1.6% to 62 cents. The non-cash charges for asset impairments are part of the company’s year-end review, it said in a statement.

The charges amount to up to $15 million before tax for intangible assets and as much as $11.5 million pretax for tangible assets. These asset impairments, full details of which will be provided in the annual result, will not affect normalised earnings and will be reported as part of abnormal, managing director Stuart Broadhurst said.

In November, the manufacturer posted a first-half net loss of $82.4 million, a deterioration from the previous year’s $7.3 million, as sales slipped 16%.

The whiteware manufacturer last year strengthened its balance sheet by selling shares at a deep discount, renegotiating its bank debt and welcoming China’s Haier Group as a new cornerstone investor. While alleviating its debt position, the company still has to contend with the impact of the global economic slump, which sapped earnings from its fridges, washers and ovens.

At the time of its first-half results, FPA forecast “normalised” full-year profit in a range of $16 million-to-$23 million. The net result was forecast to be a loss of $58 million to $65 million, reflecting charges against its North American business.

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