Fisher & Paykel Appliances hopes to tap into the fast-growing Indian market. The manufacturer's half-year profit has fallen by more than 90%, largely due to losses on currency hedges.
The listed appliance maker made $976,000 in the six months to the end of September, compared with $11.3 million in the same period a year earlier. Revenue fell 6% to $514.4 million dollars.
Fisher & Paykel managing director Stuart Broadhurst says the result is far from satisfactory and reflects very tough economic conditions, high raw material costs, and depressed spending in Australasia, North America, and Europe.
The company's appliances division reported an operating loss of about $2.4 million and earnings at its finance arm remained steady at about $18.5 million despite soft market conditions.
Mr Broadhurst says the business has improved the gross margin and reduced overheads, but unfortunately got caught with currency volatility.
He says market conditions are expected to remain challenging and unpredictable in the near term and full year pre-tax earnings are likely to be about $33.5 million.
But he says the company sees a lot of potential in India, where it is just weeks away from launching its brand.
He says they have spent more than two years in India already, investigating the market and developing suitable products.
"We have a distributor, we have staff on the ground in India and we have already sold in excess of $US500,000 in the last month to get that market underway."
Mr Broadhurst says both India and China are high growth markets for the future.