FLLYR: RAK: Rakon Limited 2010 Full Year Result Media Release

21 May 2010 9:01 am

RAK 21/05/2010 FLLYR

REL: 0901 HRS Rakon Limited

FLLYR: RAK: Rakon Limited 2010 Full Year Result Media Release

MEDIA RELEASE 21 May 2010 - Auckland, NZ

Rakon Full Year 2010 Results Rakon Limited (NZX: RAK) has announced a strong improvement in its financial results for the second half of the 2010 financial year. The company reported EBITDA of NZ$7.2 million and a net profit after tax of NZ$0.8 million for the second half of the 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 said, "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."

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. Importantly Rakon increased its share of the smart phone 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," Mr Robinson explained.

"Rakon's developments in China are continuing at a pleasing pace. Over the past 6 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."

In addition Rakon's existing joint venture in China has performed ahead of expectations with strong growth and profitability.

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.

Rakon considers it is well positioned in all of its markets for 2011. Whilst forecasting the timing of growth from new applications and products can be difficult Rakon is comfortable with the current range of brokers estimates for its 2011 year which projects EBITDA of between NZ$25 and NZ$30 million.

Conference call A conference call will be held by management at 11:00 am on Friday, 21 May 2010.

Dial in details and a link to supporting information is included below:

New Zealand: 0800 450 585 Australia: 1800 554 798 China: 10800 2640 090 Hong Kong: 800 901 587 India: 000 800 100 6486 Japan: 0053 1250 084 Taiwan: 00801 615 166 UK: 0808 234 8407 USA: 1866 839 8029

Confirmation code: 9080973 Web link: http://www.rakon.com/investor/presentation End CA:00195156 For:RAK Type:FLLYR Time:2010-05-21:09:01:58

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