Fisher & Paykel Appliances has warned of a half-year loss of up to $10 million as it moved production offshore.
At its annual meeting in Auckland on Monday, it told shareholders that cost savings from relocating a large part of its manufacturing abroad should show up in the second half of the financial year.
Fisher & Paykel Appliances expects an improved second half will result in it posting full-year earnings of $33 million, including relocation costs, which is at the lower end of analysts' forecasts.
The company's shares plunged 12% on Monday after the announcement, closing down 24 cents at $1.85.
Fisher & Paykel Appliances managing director John Bongard says costs associated with relocating to Thailand, Mexico and Italy are weighted to the first half.
However, he says lower manufacturing costs are starting to flow through from the Thailand factory, and the second half of the year will result in the full gains from that plant and preliminary gains from the Mexican plant being realised.
Mr Bongard is also expecting cost efficiencies from the Italian plant once production of some cooking products are relocated there.
He says uncertainty in the future of raw material pricing, interest rates and exchange rates are among other factors affecting the company's profits.
