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Fisher & Paykel Healthcare - Source: ONE News -
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Fisher & Paykel Healthcare has taken advantage of the strength of the New Zealand dollar against the greenback to reduce borrowings by $23 million.
The company on Monday said $US47 million ($NZ64.4 million) of forward exchange contracts with maturity dates in the 2012 and 2013 financial years had been monetised with the cash benefit of $23 million being realised and used to reduce bank debt.
The recent movement in the value of the New Zealand dollar against the US dollar had led to significant mark to market gains on Healthcare's NZD/USD forward exchange hedge book, the company said.
The company said it considered it prudent to monetise a portion of those contracts.
At current exchange rates an additional $77 million of unrealised mark to market gains remained within Healthcare's forward exchange hedge book, approximately $55 million in respect of the NZD/USD hedge book and $22 million in respect of other currencies.
At current exchange rates the monetising of forward exchange contracts would not materially impact future reported earnings, Healthcare said.
Under accounting rules the gain on those contracts would be recognised in the income statement in accordance with their original maturity dates. The timing of the recognition of those foreign exchange gains therefore remained unchanged.
If strength in the NZD/USD exchange rate persisted, further monetising of the forward exchange hedge book may be undertaken, with any more gains intended to further reduce bank debt.
