UPDATE 1-NZ's F&P Appliances year profit to tumble

(Updates with details, updates share price)

WELLINGTON, Aug 18 (Reuters) - New Zealand appliance maker Fisher and Paykel Appliances Ltd (FPA.NZ) said on Monday it expected its full year profit to fall by as much as 65 percent, sending its shares sharply lower.

A combination of higher raw material costs and one-off restructuring charges would see the company post a loss for the six months to September 30 of NZ$7 million to NZ$10 million ($4.9-$7 million).

However, it said an improvement in second half performance would see full year earnings come in at the lower end of analysts' forecasts, which according to Reuters estimates would be around NZ$19 million. That would be a drop of about 65 percent on the NZ$54.2 million for the year to March 2008.

"There remains uncertainty in the future of raw material pricing, interest and exchange rates, as well as the direction of market environments," managing director John Bongard said in speech notes to the company's annual meeting.

Shares in Fisher & Paykel Appliances, which makes kitchen and laundry appliances, last traded down 6.7 percent at NZ$1.95, in a slightly weaker broader market.

The stock has fallen 43 percent so far this year, compared to a 17 percent drop in the benchmark top 50 index .NZ50. In June, Bongard told Reuters in an interview the company's steep share price decline this year could make it a takeover target.

F&P Appliances is in the process of relocating much of its manufacturing from New Zealand, Australia and the U.S. to low-cost countries like Thailand and Mexico, a move it says will ultimately save NZ$50 million a year.

"I am confident that the results we have experienced from the first phase of the global manufacturing strategy will ensure the forecasted savings will be fully realised," Bongard told the annual meeting.

Bongard said the company would face duplicated overhead costs during the relocation, including carrying excess inventory and doubling up on staff between the two sites.

When it released its full year results in May, F&P Appliances declined to comment on future earnings, saying the New Zealand dollar NZD=, raw materials and markets were too volatile to predict.

F&P Appliances has a global marketing, sales and product alliance with the world's No.1 appliance maker, Whirlpool Corp. (WHR.N), from whom it is buying a manufacturing plant in Mexico for $33 million as part of its restructuring.

The Auckland-based company is a niche player catering for the top end of the market, as opposed to mass-market rivals such as Whirlpool's Maytag, Sweden's Electrolux (ELUXb.ST) and South Korea's LG Electronics (066570.KS).

Bongard also told the annual meeting the company is looking at a possible issue of capital notes to the New Zealand markets, which may occur later this year. ($1=NZ$1.42) (Reporting by Adrian Bathgate)