Sharechat Logo

Rakon says 2013 pretax earnings to rise as margins remain tight

Friday 24th August 2012

Text too small?

Rakon, which makes crystal oscillators used in smart phones and navigation systems, said 2013 earnings will be an improvement on last year's results, when a high kiwi dollar compounded the impact of lukewarm demand from the telecommunications sector.

Earnings before interest, tax, depreciation and amortization are expected to be $14 million to $16n million in the year ending March 31, 2013, managing director Brent Robinson said in a statement.

That would compare with $13.1 million last year, which was about half the 2011 result. Robinson said the company is seeing "slowly strengthening demand across its market sectors."

Sales growth for smartphones and tablets has been reflected in "corresponding growth in those sales by Rakon" though competition "means margins remain tight." "The telecommunications infrastructure market remains below expectation and that of the prior year," he said.

"Rakon experienced the beginnings of a recovery in this market at the end of the last financial year, but it has not continued to grow at the expected pace, as the global economic environment causes operators to delay spending despite the growth in data."

Shares of Rakon last traded at 47 cents, having rallied last week when the company signed a letter of intent with Huawei Technologies, quadrupling its sales to the Chinese company to US$56 million over the next five years. Rakon's market value is $91.7 million and it dropped out of the NZX 50 Index in June to reflect its shrinking size.

BusinessDesk.co.nz



  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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report