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The high exchange rate has hit profits at Fisher & Paykel Healthcare but underlying growth remains good, says the listed breathing products maker.

Net profit for the six months ending September 30 was $18.7 million, down 29 per cent from $26.3 million. Revenue was flat at $172.5 million.

Chief executive Michael Daniell said the New Zealand dollar had appreciated to average US74c compared with US63c the previous year.

Operating profit of $31.2 million was down 24.1 per cent on last year.

"That's effectively about $2 million above guidance we provided at the annual shareholders meeting after we allow for a currency-related $3 million headwind since then," Daniell said.

Net profit was also affected by an 18 per cent rise in research and development spending and a 15 per cent increase in sales and operations expenses in constant currency terms.

"We have again recruited a substantial number of additional R&D graduates most of whom will start [this] ... summer."

In US dollar terms operating revenue grew by a rosier 18 per cent, with good growth in respiratory/acute care and obstructive sleep apnoea markets.

"Although we've seen good growth in the first half we expect even better in the second half because we've got a new hospital deal we'll be delivering into."

Shares closed down 2c yesterday at $3.18.

Forsyth Barr analyst Guy Hallwright said the downward revision of the full-year forecast because of the strength of the currency was not a surprise.

"They seem to be doing all the right things but basically it's not going to really be reflected in the profit numbers until the currency falls," Hallwright said.

Daniell said a deal with US hospital buying group Novation would be worth about US$3 million this year. Details of a South American deal were not disclosed.

Every 1 per cent movement against the weighted average of the currencies the company sold in affected operating profit by $2.1 million in margins, he said.

Meanwhile, each 1 per cent change in the exchange rate at the end of the current period compared with the end of the prior reported period cost the company $400,000 of operating profit in terms of revaluation.

"So with the volatility we have in our exchange rate you could go from 70 to 80 [USc] in a six-month period and have an average of 72," Daniell said.

The full-year revenue forecast was about $365 million, with operating profit of about $68 million at an average cross rate with the US dollar of US75c for the rest of the year.

In August F&P Healthcare forecast a full-year operating profit of $75 million.

"That's essentially the same guidance as we provided back at the annual shareholder meeting but allowing for the current value of the New Zealand dollar," Daniell said.

The company was covered against the US dollar near the policy minimum of 50 per cent for the next 12 months at rates at an average slightly better than the current spot rate of about US75c.

The company has said it would likely place a significant proportion of growth in manufacturing offshore to spread the geographical risk and reduce cost.

$15 million us plant

Auckland-based Fisher & Paykel Appliances is to spend $15 million building a dishwasher manufacturing plant in North America.

The company announced the move yesterday, having earlier this year moved to close two operations in this country with the loss of nearly 450 jobs.

The decision to build the plant, expected to be completed late next year, was in response to continuing North American sales growth.

The plant would produce a new DishDrawer model, designed just for the North American market.

"Our supply philosophy is to have small, efficient, manufacturing plants, in or close to the markets we participate in," Appliances chief executive John Bongard said.