Fisher & Paykel Healthcare Reports Full Year Results
Auckland, New Zealand, 25 May 2012 -
Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH, ASX:FPH) today announced that expanding clinical applications for its
medical devices and new products contributed to record operating revenue of NZ$516.7 million for the year ended 31 March
2012.
The company reported net profit after tax of NZ$64.1 million, compared to NZ$52.5 million for the prior year. The prior
year result included one-off non-cash deferred tax charges of NZ$11.5 million.
In constant currency terms, and excluding the prior year deferred tax charges, the company's net profit after tax grew
23%, primarily as a result of revenue growth, disciplined control of expenses and other efficiencies.
Operating revenue
The company derived approximately 52% of its operating revenue in US dollars. In US dollars, the company's respiratory
and acute care product group (RAC) operating revenue increased by 18% and obstructive sleep apnea (OSA) product group
revenue increased by 7%, over the prior year. "Strong growth in our RAC product group was driven by rapidly growing
acceptance of our products which are used in applications outside of intensive care ventilation, with operating revenue
from consumables used in those new applications increasing 24% in constant currency terms", commented Fisher & Paykel Healthcare's CEO, Mr Michael Daniell.
"In our OSA product group, constant currency flow generator revenue growth of 18% over the prior year reflected strong
growth from our ICON range. Mask revenue reduced 4% in constant currency terms, but began to improve late in the year,
following the launch of the first of a number of innovative new masks".
Dividend
The company's directors have approved a final dividend for the financial year ended 31 March 2012 of 7.0 NZ cents per
ordinary share (2011: 7.0 cents), carrying full imputation credit based on a tax rate of 28%. For New Zealand resident
shareholders that results in a gross dividend of 9.722 cents per ordinary share. Eligible non-resident shareholders will
receive a supplementary dividend of 1.235 NZ cents per ordinary share. The final dividend will be paid on 6 July 2012,
with a record date of 22 June 2012, and ex-dividend dates of 18 June 2012 for the ASX and 20 June 2012 for the NZSX.
The company offers a dividend reinvestment plan (DRP), under which eligible shareholders may elect to reinvest all or
part of their cash dividends in additional shares. A 3% discount will be applied when determining the price per share of
shares issued under the DRP and will be applied in respect of the 2012 final dividend and future dividends, until such
time as the directors determine otherwise.
Research & Development, Selling, General & Administrative expenses Research and development (R) expenses increased by 7% over the prior year to NZ$42.0 million, representing 8.1% of operating revenue.
The company continued to expand its product and process research and development activities, and current new product
projects include OSA masks, flow generators, humidifier systems and respiratory and acute care consumables. Selling,
general and administrative (SG) expenses increased 1% to NZ$142.6 million, or 6% in constant currency terms, as the company continued to expand its
operations and its sales teams in the North America, Europe and Asia-Pacific regions.
Capacity Expansion
During the year the company invested NZ$67.5 million of capital expenditure, which included equipment for increased
manufacturing capacity, new product tooling, replacement equipment and NZ$47.4 million for construction of the third
building on its Auckland site.
The ramp up of manufacturing of consumable products at the company's facility in Tijuana, Mexico progressed as expected
with an increasing quantity and range of the company's products now manufactured there.
Foreign Exchange Hedging
To protect the company from exchange rate volatility, the company had in place at 31 March 2012 a mix of foreign
exchange contracts and collar options, up to five years forward, with a face value of approximately NZ$450 million.
These instruments hedge the company's net exposure. At the commencement of the 2013 financial year, the company had in
place approximately 64% cover for the US dollar and approximately 65% cover for the Euro at average rates of
approximately 0.75 US dollars and 0.46 Euros to the New Zealand dollar.
The company closed out foreign exchange contracts in the 2010 and 2012 financial years, which will contribute NZ$17.8
million in the 2013 financial year and NZ$21.3 million in the 2014 financial year to operating profit but not to cash
flow, as the cash was received in the 2010 and 2012 financial years. Those instruments were progressively replaced with
new instruments that form part of the company's current foreign exchange hedging.
Outlook for FY2013
"We expect our underlying revenue growth to begin to accelerate this year, particularly in the second half, as a number
of new products, including new OSA masks, are 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 have continued to be very volatile. For the 2013 financial year, based on an exchange rate range of 0.75
to 0.80 for the NZD:USD for the remainder of the year, we expect our operating revenue to be in the range of NZ$540
million to NZ$560 million and net profit after tax to be in the range of NZ$62 million to NZ$70 million", concluded Mr
Daniell.
Financial Statements and Commentary
Attached to this news release are condensed NZ dollar financial statements and commentary. For convenience the income
statement has been translated into US dollars. The US dollar financial statement is non-conforming financial
information, as defined by the NZ Financial Markets Authority.
The company's financial statements for the year ended 31 March 2012 and the comparative financial information for the
year ended 31 March 2011 have been prepared under the New Zealand equivalents to International Financial Reporting
Standards (NZ IFRS).
A constant currency analysis is also included. A constant currency income statement is prepared each month to enable the
board and management to monitor and assess the company's underlying financial performance without any distortion from
changes in foreign exchange rates. The constant currency data provided is an estimate of the changes in the main income
statement items after excluding the impact of movements in foreign exchange rates, hedging results and balance sheet
translations. The data is based on the NZ dollar income statements for the relevant periods which have all been restated
at the budget foreign exchange rates for the 2012 financial year.
The constant currency analysis is non-conforming financial information, as defined by the NZ Financial Markets
Authority, and has been provided to assist users of financial information to better understand and track the company's
financial performance without the impacts of spot foreign currency fluctuations and hedging results.
ends