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Smartphone market takes Rakon back to black

Thursday 11th November 2010

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Rakon is grabbing more of growing smart phone and fibre optic markets as its books returned to black. 

Managing director Brent Robinson said the company delivered 10 million units for wireless devices such as smart phones and iPads, boosting production to two top cellphone makers. Rakon is also in negotiations with another two tier-one mobile phone manufacturers who are adopting the Android operating system, for which it expects further significant growth.

Product demand for the fibre optic market is strong, and the company’s decision to ramp up its Femtocell production has been justified, he said at an analyst’s presentation on the company’s earnings. Rakon returned to profit this year, posting first-half earnings of $5.6 million compared to a loss of $6.2 million a year ago. Crystal prices and the company’s margins are back on the up after being squeezed through the global financial crisis, he said.

The company managed its way through difficulties in obtaining some electronic components for its devices that it experienced earlier this year, he said.

“We didn’t run short, and we’re not expecting any effect in the second half of our financial year,” Robinson said.

Rakon expects that its new Chinese manufacturing facility that is currently being constructed in Chengdu is proceeding to plan, and following its fit-out and equipment installation, should begin production in July 2010.

Robinson said Chinese production will help provide some degree of hedging against volatile currency fluctuations, though the company has hedged 95% of its greenback to kiwi dollar exposure at US$0.655.

The shares rose 0.8% to $1.29 in trading today, and have gained 10% this year.

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