Fisher & Paykel Healthcare Reports Half Year Revenue

Fisher & Paykel Healthcare Corporation Limited (NZSX:FPH,  ASX:FPH)  today  reported  record  trading  revenue  of  NZ$173.2  million  for  the  six months ended 30 September 2006, up 28% against the prior comparable period.

Operating profit was NZ$46.1 million compared to NZ$47.4 million for the first half last year.   Net foreign exchange hedging gains contributed NZ$2.8 million to first half operating profit compared to NZ$22.6 million in the prior comparable  period.   Profit after tax for the six months was NZ$29.7 million.

Chief Executive Officer, Michael Daniell said that trading revenue growth was achieved through increased  activities  in  international  markets  and  continued  strong  sales  growth  in  each  of  the company’s obstructive sleep apnea (OSA), respiratory humidification and neonatal product groups.

During the six months the company derived its trading revenue in a variety of currencies with US dollars contributing  62%, Euros 20%, Australian dollars 7%, UK pounds 6%, and NZ dollars 1%. After allowing for exchange rate movements and hedging gains the company estimates that trading revenue grew 22% in constant currency terms.

Dividend
The company’s directors have approved an interim dividend for the financial year ending 31 March
2007 of NZD 5.4 cents per ordinary share (2006: 5.4 cents), carrying full imputation credit.   Non- resident shareholders  will receive a supplementary  dividend of NZD 0.953 cents per share.   The interim dividend will be paid on 1 December 2006, with a record date of 22 November, and an ex- dividend date of 16 November for the ASX and 23 November for the NZSX.

Trading Revenue
OSA product group trading revenue increased by 33%, respiratory humidification trading revenue increased by 24% and neonatal trading revenue increased by 29% compared with the same period last year.

“We  are  continuing  to  gain  share  within  the  rapidly  growing  OSA  treatment  market  and  are encouraged  by  the  28%  constant  currency  growth  we  achieved  for  combined  mask  and  flow generator revenue.

Constant currency trading revenue growth of 23% in our respiratory  humidification  product group was driven by strong demand for our humidifier controllers and continuing market share gains by adult and neonatal breathing circuits,” commented Mr Daniell.

Trading revenue growth in the neonatal product group was driven by increasing demand for the company’s neonatal breathing devices, which include infant oxygen therapy systems and infant resuscitators.

Research & Development, SG&A
Research  and  development  expenses  increased  13%  to NZ$9.5  million,  representing  5.5%  of trading revenue for the six months ended 30 September 2006.  The company continues to expand its  research  and  development  activities  and  current  new  product  projects  include  additional breathing system consumables, flow generators and masks.

Selling,  general  and  administrative  expenses  grew  20%  to  NZ$47.9  million  as  the  company continued to expand its operations and its sales teams in North America, Europe and Asia.

Outlook
“Our performance  for the six months to 30 September 2006, coupled with a growing contribution from  recently  introduced   new  products  gives  us  confidence   that  we  will  achieve  stronger performance for the full year than indicated by our initial 2007 operating profit and exchange rate sensitivity guidance.

For  the  remainder  of the  financial  year  we expect  a continuation  of strong  underlying  revenue growth across our product groups and international  markets.   If average spot exchange rates are similar  to  those  experienced   in  the  first  half,  we  expect  to  achieve  an  operating  profit  of approximately NZ$98 million for the full year.” said Mr Daniell.

Financial Statements and Commentary
Attached  to this news  release  are condensed  financial  statements  and commentary  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 2007 financial year.   The conference  call is scheduled  to begin today at 10:00am NZDT, 8:00am AEDT (4:00pm USEST, Tuesday 31 October 2006) 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.

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 009 696
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 000897.

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.