Latest Rakon results show return to profit

Second-half 2010 figures strong after loss in first half-year

Rakon has seen an improvement in its results for second half of the 2010 financial year, announced today.

In a statement to the NZ Stock Exchange announcing the results, the company reported EBITDA of NZ$7.2 million and a net profit after tax of NZ$0.8 million for the half year, a significant improvement on the first half net loss after tax of NZ$6.2 million. The full year result was in line with previous guidance, with revenue of NZ$144.5 million, EBITDA of NZ$4.3 million and a net loss after tax of NZ$5.4 million.

Brent Robinson, Rakon Managing Director says in the statement: “As we expected, our results in the second half of the year were much stronger as demand grew strongly across our entire business which helped deliver a NZ$7 million improvement in net result after tax. Despite the massive impact of the global financial market collapse of 2008 and 2009 we have also enhanced the capability of our global platform and broadened our product range significantly.”

The statement also notes: "In the second half of the year demand for products targeted at consumer GPS were well above levels for the same period last year. Average sales prices also stabilised, after the significant erosion suffered in the early part of the year. Rakon increased its share of the smartphone market as significant production volumes began to ship to new tier one customers during March 2010.

"Significant investment in new equipment is being made by telecommunications companies to deal with the massive increases in data traffic being generated by mobile devices such as the iPhone and Blackberry. Rakon has developed leading frequency control technologies for this market and is now seeing the benefits of that investment with demand for infrastructure applications growing strongly throughout the year. Recently Rakon has also begun to receive strong demand from the emerging femtocell market as infrastructure providers look for lower cost solutions to alleviate the 'data crunch' ”.

“Rakon now has a global business with an excellent portfolio of products for consumer and telecommunications applications. I am very pleased with the progress we have made over the past 3 years. Our strategy of expanding firstly into Europe and then into India and China, plus our investment in new technologies, puts us in a strong position to build strong bottom line growth now and in the future,” Robinson says.

“Rakon’s developments in China are continuing at a pleasing pace. Over the past six months Rakon has secured land and has finalised plans to begin construction of its new state of the art crystal manufacturing facility in Chengdu. We aim to begin commercial operations in July 2011 and look forward to this facility providing us with the platform we need to continue our growth, particularly for consumer applications like smart phones,” he says.

Rakon closed the year with its balance sheet in strong shape with cash reserves of $46 million held to fund planned expansion particularly in China over the next 18 months, the NZX statement says.

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