Sharechat Logo

Rakon to sign US$56 mln contract with China's Huawei

Monday 20th August 2012

Text too small?

Rakon, the communications components maker which dropped out of the NZX 50 Index in June, will today sign a letter of intent with Huawei Technologies, quadrupling its sales to the Chinese-based company to US$56 million over the next five years.

Huawei will use Rakon's frequent control products in its handsets, smart devices and infrastructure programmes. A signing ceremony will be held at Wellington's New Zealand Trade and Enterprise office.

"The letter of intent recognises the greater scale and breadth of our product range, validates our commitment to a strategy of globalisation and our investment in operations in China," managing director, Brent Robinson said in a statement.

The high New Zealand dollar and weaker demand from the telecommunications industry has weighed on Rakon's earnings. In May, the Auckland-based company's full-year earnings before interest, tax, depreciation and amortisation fell 47 percent to $13 million including a share of EBITDA from associates and joint ventures.

Shares in the company last traded at 42 cents and have shed about 51 percent over the past year. They traded as high as $5.50 in November 2007.

BusinessDesk.co.nz

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Rakon's Robinson brothers sell shares to fellow directors Mogridge, Irvine
Sale of Rakon's Chinese factory better than liquidation
Rakon's Robinson brothers to sell recently purchases shares after breaching Takeovers Code
Rakon founders buy 367,000 shares after Chinese factory sell-down
Rakon sells 80 percent of Chinese factory to reduce debt
No savings this year for Rakon's manufacturing shift to China, grand plan coming in July
Rakon cuts annual earnings guidance again, matching market expectations
Rakon cuts full-year guidance on delayed sales, thinner margins
Sluggish first half pushes Rakon to $3.96M loss
Rakon to cut 60 NZ jobs as it shifts manufacturing to China, India