F&P Healthcare gets massive revenue boost from Covid-19

Fisher & Paykel Healthcare, which has experienced worldwide demand for its breathing devices during the Covid-19 pandemic, saw revenue jump 73 per cent over nine months.

The announcement boosted Fisher & Paykel Healthcare stock, adding more than $1 billion to the company’s sharemarket value.

F&P Healthcare managing director and chief executive Lewis

Gradon said hospital hardware sales, and the use of its hospital devices, continued to be strong.

‘‘In many parts of the world, we have continued to see an influx of Covid-19 patients requiring hospitalisation for respiratory treatment,’’ said Gradon yesterday, releasing an update for the nine months ended December 31. ‘‘Healthcare professionals are dealing with pressures unlike anything they have faced before.’’

Gradon warned that the risk to New Zealand of a damaging potential Covid-19 outbreak was high. ‘‘We’ve got more arrivals . . . the risk to New Zealand is higher than it’s ever been, and it’s still increasing. I feel like we can’t afford to be complacent.’’

Compared with a year earlier, operating revenue was up 113 per cent in its hospital product business, which included products used in acute and chronic respiratory care and surgery.

Hospital hardware revenue was up 446 per cent, and hospital consumables revenue was 54 per cent higher. For homecare products, including devices used to treat obstructive sleep apnea, operating revenue was up 6 per cent on a year earlier.

The company could not provide guidance for the full year results, because of ‘‘the significant uncertainties associated with the course of Covid-19, the effectiveness or adoption of preventative measures, the progress of vaccines and their outcomes and the impact on future hospitalisation rates’’, said Gradon.

Revenue forecasts from November for hospital hardware sales and usage for the full year were already outdated, he said. However, the company expected annual revenue and net profit after tax to be higher than previous assumptions.

In November, it raised its fullyear profit expectations because of sustained stronger hospital hardware sales to a range of $400 million to $415m, and increased its revenue forecast to $1.72b. For the half-year, after-tax profit rose to $225.5m in the six months to September 30, from $121.2m last year. Revenue increased 59 per cent to $910.2m.

F&P Healthcare has been struggling to build its inventory levels up, but ‘‘we are keeping up with demand,’’ Gradon said.

Part of the problem was the unpredictability of that demand. ‘‘Orders are coming in from all over the place. Whole countries can order on a day.’’

F&P Healthcare, the world’s largest suppliers of humidifiers for ventilators, and nasal high flow products, continued to focus on investment in its manufacturing capacity.

It had accelerated installation of production lines in its Daniell building, its fourth New Zealand manufacturing facility, which was completed during the half year.

It is also planning for a third plant in Mexico.

‘‘Orders are coming in from all over the place. Whole countries can order on a day.’’

Lewis Gradon

F&P Healthcare chief executive