Rising freight costs impacts Fisher & Paykel's (ASX:FPH) FY22 guidance

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  • Rising transportation and logistics costs have been impacting FPH's FY22 guidance. 
  • Fisher & Paykel expects a 2% drop in its FY22 gross profit margin target. 
  • The stock has dropped over 12% in the last 12 months. 


ASX listed healthcare and respiratory firm, Fisher & Paykel Healthcare Corporation Limited (ASX:FPH), shared today that it expects a drop in its FY22 gross profit margin target. 

Dragged lower by the announcement, the scrip was spotted trading 5.862% lower at AU$24.250 at 11:48 AM AEDT today. 

Providing its FY22 guidance today, the company revealed that it is expecting a 2% drop in its FY22 gross profit margin target, which was earlier targeted at 65%. 

What is the reason?

The rising freight costs due to the global supply chain issues have been a significant challenge for many healthcare companies, including ResMed. 

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As the freight rates remain elevated at the current exchange rates, FPH expects its full-year operating revenue for FY22 to be in the range of N$1.675 billion to NZ$1.70 billion.

Last year, the medical device maker reported its operating revenue at NZ$1.97 billion. The company anticipates a long-term impact on its gross margin target of 65% by approximately 250 basis points. 

Management comments 

FPH's managing director and chief executive officer Lewis Gradon said that FPH's second half hospital consumables revenue is somewhat equal to the revenue reported in the first half of FY22.

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He stated that this is consistent with reports of the rising Omicron cases over the last two months and its associated lower respiratory intervention requirements coupled with a relatively mild flu season in the Northern Hemisphere.

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Gradon further added that despite supply constraints of treatment hardware in the market, OSA masks' sales are currently tracking above the first-half growth rate under FPH's Homecare product group. 

FPH share price movement 

The stock has dropped over 12% in the last year and 17% on YTD. 

Road Ahead

Despite the ongoing challenges, FPH is confident in its business strategies to contribute to a positive change in clinical practice and improve outcomes for respiratory patients over the long term.

The company also revealed that it intends to release its financial results for the year ending 31 March 2022 in May.



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