Fisher & Paykel Healthcare Reports Record First Half Revenue and Operating Profit

Fisher  &  Paykel  Healthcare  Corporation  Limited (NZSX:FPH, ASX:FPH) announced today that 42% OSA product group revenue growth, in US dollar terms,  contributed  to  a 14% increase  in first half operating profit  to a record NZ$47.4  million. The company has announced a higher interim dividend with profit after tax up 12% to NZ$31.6 million.

Over the period the company derived approximately  61% of its revenue in US dollars.   In US dollar terms, total revenue for the six months ended 30 September 2005 increased by 27% and operating profit increased by 25% compared with the prior comparable period.  Operating margin continued to be very strong at 35.0%.

Revenue growth was achieved through market share gains by the company’s expanding product range and its increasing activities in international markets.

Chief Executive Officer, Michael Daniell said that robust revenue growth in each of the company’s obstructive sleep apnea (OSA), respiratory humidification and neonatal categories helped generate the earnings growth.

The company’s directors have approved an increased interim dividend for the financial year ending 31
March 2006 of NZD 5.4 cents per ordinary share (2005: 5.0 cents), carrying full imputation credit. Non- resident shareholders will receive a supplementary dividend of NZD 0.953 cents per share (2005: 0.882 cents).  The interim dividend will be paid on 9 December 2005, with a record date of 1 December, and an ex-dividend date of 25 November for the ASX and 2 December for the NZSX.

Revenue Growth
Operating revenue for the company’s core product range grew 27%, in US dollar terms, over the prior comparable six months.  OSA revenue increased by 42%, respiratory humidification revenue increased by 16%, and neonatal and warming revenue increased by 28% in US dollar terms.

“The  worldwide  market  for  OSA  treatment  devices  continues  to  grow  rapidly  and  we  are  very encouraged by the progress we are making in that growing market. Our OSA product group growth was driven by combined revenue growth of approximately  64%, in US dollar terms, from nasal masks and CPAP flow generators.

Revenue growth in our respiratory humidification product group continues to be driven by market share gains in both adult and neonatal breathing circuits, due primarily to increasing penetration of our MR850 respiratory humidifier technology,” commented Mr Daniell.

Strong  growth  in  the  neonatal  and  warming  product  group  reflected  increasing  demand  for  the company’s  neonatal  warmers  and  neonatal  breathing  systems,  which  include  infant  CPAP  and resuscitator devices.

Research & Development, SG&A
Research and development expenses increased by 2% to NZ$8.3 million representing 6.2% of revenue for the six months ended 30 September 2005.  The company has introduced a number of significant new products this year including a range of non-invasive ventilation masks, the FlexiFit™ 406 petite nasal mask and the MR880 humidifier system for oxygen and humidity therapy.  Current new product projects include additional breathing system consumables, flow generators and masks.

Selling, general and administrative expenses grew 16% to NZ$39.9 million, or approximately 23% in constant currency terms, as the company continued to expand its operations and its sales teams in North America, Europe and Asia.

Foreign Exchange Hedging
The company has in place a mix of foreign exchange contracts and call options with a face value of approximately NZ$133 million, the majority of which are up to six months forward.  These instruments are at average exchange rates of approximately 0.45 US dollars and 0.50 Euros to the New Zealand dollar and are to protect the company from exchange rate volatility.

Construction of the new 23,300m2   building in addition to the existing 28,000m2  facility on the company’s Auckland site is progressing to plan.  The new building, which will be occupied primarily by the OSA product group, will provide space for increased manufacturing and R&D capacity on completion in mid 2006.

“Our performance in the six months to 30 September 2005, coupled with the introduction of new products and growth in our international sales activities give us confidence of a strong result for the full year.

For the full year we expect a continuation of robust US dollar revenue growth with full year revenue to be in the range of US$195 million to US$200 million. We expect operating margin percentage to continue to be in the mid thirties,” commented Mr Daniell.

Financial Statements
Attached to this news release are condensed financial statements in both NZ dollars and US dollars.

Half Year Results Conference Call
Fisher & Paykel Healthcare will host a conference call to review the results and to discuss the outlook for the remainder of the 2006 financial year.  The conference call is scheduled to begin at 10:00am NZDT, 8:00am AEDT (4 pm USEST, Wed 16 Nov) and will be broadcast simultaneously over the Internet.

To listen to the webcast access the company’s website at  Please allow extra time prior to the webcast to visit the site and download the streaming media software required.  An online archive of the event will be available approximately two hours after the webcast and will remain onsite for two weeks.

To participate in the conference call please dial in to one of the numbers below a few minutes prior to the scheduled call time and identify yourself to the operator:

New Zealand Toll Free  0800 449 118
Australia Toll Free  1800 555 619
USA Toll Free  1866 369 4113
International  +61 3 9221 4420

An audio replay of the conference call will be available approximately 60 minutes after the call and will be accessible for two weeks at +61 3 9221 4752, access code 058037.

About Fisher & Paykel Healthcare
Fisher & Paykel Healthcare is a leading designer, manufacturer and marketer of heated humidification products and systems for use in respiratory care and the treatment of obstructive sleep apnea.  It also offers an innovative range of patient warming devices and neonatal care products.   The company’s products are sold in over 90 countries worldwide.   For more information about the company visit

Contact: Michael Daniell MD/CEO on +64 9 574 0161 or Tony Barclay CFO on +64 9 574 0119