Fisher & Paykel Healthcare Reports Record Full Year Revenue and Operating Profit

Fisher  &  Paykel  Healthcare   Corporation   Limited (NZSX:FPH, ASX:FPH) announced today that 53% trading revenue growth, in US dollar terms for CPAP flow generators and masks, contributed to a record operating profit of NZ$104.1 million.

Trading revenue  growth of 20% to NZ$289.5  million for the year was achieved  through ongoing growth  of  the  company’s  expanding  product  range  and  its  increased  activities  in  international markets.   Profit after tax increased 14% to NZ$70.0 million compared with NZ$61.4 million in the prior year.

Over the period the company derived approximately 65% of its trading revenue in US dollars.  In US dollar terms, trading revenue for the year ended 31 March 2006 increased by 23% and operating profit  increased  by  18%  compared  with  the  prior  year.    Operating  margin  on  trading  revenue continued to be very strong at 35.9%.

Continuing   strong  sales  growth  in  each  of  the  company’s   obstructive   sleep  apnea  (OSA), respiratory humidification and neonatal product groups helped generate the earnings growth.

Dividend
The company’s directors have approved an increased final dividend for the financial year ended 31
March 2006 of NZD 7.0 cents per ordinary share (2005: 5.8 cents), carrying full imputation credit. Non-resident  shareholders  will receive a supplementary  dividend of NZD 1.2353 cents per share. The final dividend will be paid on 28 June 2006, with a record date of 16 June, and an ex-dividend date of 12 June for the ASX and 19 June for the NZSX.

Trading Revenue
OSA product  group revenue  increased  by 34%, respiratory  humidification  revenue  increased  by
14% and neonatal and warming revenue increased by 24% in US dollar terms compared with the prior year.

“Our innovative masks and flow generators are continuing to gain share within the rapidly growing OSA treatment market.   We are particularly pleased with customer acceptance  of both our broad range of masks and our ThermoSmart flow generator technology.

Constant  currency  revenue  growth  of 17%  over  the  prior  year  in our  respiratory  humidification product  group was driven by robust demand  for our humidifier  controllers  and continuing  strong market share gains by adult and neonatal breathing circuits,” commented Mr Daniell. Strong  growth  in  the  neonatal  product  group  was  from  both  neonatal  warmers  and  neonatal breathing systems, which include the company’s infant CPAP system and infant resuscitator.

Research & Development, SG&A
Research and development  expenses increased to NZ$17.3 million or 6% of trading revenue for the twelve months ended 31 March 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  21%  to  NZ$81.7  million  as  the  company continued to expand its operations and its sales teams in North America, Europe and Asia.

Outlook
“We  see  clear  opportunities  to continue  to grow  market  share  in the  OSA  and  intensive  care ventilation markets.  In addition, we have recently introduced a number of innovative devices which can enhance the treatment of patients in a broad range of new applications including non-invasive ventilation, oxygen therapy, humidity therapy and resuscitation.

For the 2007 financial year we expect a continuation  of strong underlying revenue growth across our international  markets.   At current exchange  rates we estimate that trading revenue will grow almost 30% to approximately NZ$375M.  This growth will help us accommodate the transition from last  year’s  favourable  hedge  rates.    As  previously  indicated,  we  expect  that  at  an  average NZD:USD exchange rate of 0.60, operating profit will remain at a similar level to the 2006 financial 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.

Full Year Results Conference Call
Fisher & Paykel Healthcare  will host a conference  call to review the results and to discuss the outlook for the 2007 financial year.   The conference call is scheduled to begin today at 10:00am NZST, 8:00am AEST (6:00pm USEDT, Wed 24 May 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 066512.

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 90 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.