Fisher & Paykel Healthcare Reports Half Year Results

Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH,  ASX:FPH)   announced  today that continuing strong volume growth in its obstructive sleep  apnea  (OSA),  respiratory  and  acute  care  products  contributed  to  operating  revenue  of NZ$172.5 million or US$127.7 million for six months ended 30 September 2007.

Increasing demand, particularly for its masks, respiratory consumables and neonatal devices, along with expanding activities in international markets all contributed to growth.

Operating Revenue
In US dollar terms OSA product group operating revenue increased  by 21% and respiratory  and acute care product group operating revenue increased by 15% compared to the same period last year.

“We continued to gain share within the rapidly growing OSA treatment market, with 25% growth, in US dollar terms, for total mask and flow generator operating revenue.

Demand for our neonatal care product range, which includes infant warmers, bubble CPAP systems and resuscitators, was particularly strong.   This, coupled with ongoing growth in respiratory humidification  consumables  generated  robust  growth  in our  respiratory  and  acute  care  product group”, commented the company’s CEO, Mr Michael Daniell.

“We continue to make encouraging  progress  in developing  opportunities  for our technologies  to assist in the care of patients beyond our traditional intensive care market.  These include patients requiring non-invasive ventilation, oxygen therapy, humidity therapy and laparoscopic surgery.

“Our United States distribution partner has secured a significant hospital group purchasing contract for  respiratory  humidifier  systems  which  we expect  will  contribute  to accelerated  growth  in the second half”, concluded Mr Daniell.

The company’s  products are sold in over 110 countries worldwide.   Over the year, the company derived its trading revenue in a variety of currencies with US dollars contributing 59%, Euros 23%, Australian dollars 8%, UK pounds 5%, and NZ dollars 2%.  The average NZD:USD exchange rate increased by 17% to 0.74 compared with 0.63 for the same period last year.

Earnings
Operating profit for the six months was NZ$31.2 million compared to NZ$41.1 million for the prior comparable period and profit after tax was NZ$18.7 million compared to NZ$26.3 million.   The reductions  reflect  the  effect  of  the  much  stronger  NZ  dollar  and  increased  R&D,  sales  and operations expenses.

Dividend
The company’s directors have approved an interim dividend for the financial year ended 31 March 2008 of 5.4 NZ cents per ordinary  share (2007: 5.4 cents), carrying  full imputation  credit.   Non- resident shareholders will receive a supplementary dividend of 0.953 NZ cents per share.  The final dividend will be paid on 14 December 2007, with a record date of 5 December, and an ex-dividend date of 29 November for the ASX and 6 December for the NZSX.

Research & Development, SG&A
Research and development expenses increased by 18% to NZ$11.5 million or 6.6% of operating revenue  for the six months ended 30 September  2007.   The company  continued  to expand  its research and development teams and current new product projects include flow generators, masks and additional breathing system consumables.

Selling,  general  and  administrative  (SG&A)  expenses  grew  5%  to  NZ$49.8  million,  or 15%  in constant currency terms, as the company continued to expand its operations and its sales teams in North America, Europe, Asia/Pacific and South America.

Outlook
For  the  2008  financial  year  the  company  expects  a  continuation  of  strong  underlying  revenue growth  across  its  product  range.     The  company  expects  that  trading  revenue  will  grow  to approximately US$275 million or approximately NZ$365 million, generating an operating profit of approximately NZ$68 million if the NZD:USD exchange rate averages 0.75 for the remainder of the financial year.

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

The  company’s  financial  statements  for  the  six  months  ended  30  September  2007  and  the comparative  financial  information  for  the  six  months  ended  30  September  2006  have  been prepared  under the New Zealand  equivalent  to International  Financial  Reporting  Standards  (NZ IFRS).    The  notes  to  the  financial  statements  include  reconciliations  and  discussion  of  any significant differences between previous New Zealand GAAP and NZ IFRS.

Full 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 2008 financial year.  The conference call is scheduled to begin at 10:00am NZDT, 8:00am AEDT (4:00pm USEST, Wednesday 21 November) and will be broadcast simultaneously over the Internet.

To listen to the webcast access the company’s website at  www.fphcare.com.  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.

Intending participants may register for the conference call prior to the event, using this link: http://www.fphcare.com/investor/conference/ .  Once registered, participants will be assigned a conference passcode and user PIN.  Registered participants can dial in to one of the numbers below and use their codes for instant access to the conference.  Alternatively, 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 027616.

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 neonatal care products.  The company’s products are sold in over 110 countries worldwide.   For more information about the company visit www.fphcare.com

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