REL: 0901 HRS Rakon Limited
FLLYR: RAK: Rakon Limited 2010 Full Year Result 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
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.
A conference call will be held by management at 11:00 am on Friday, 21 May
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