REL: 0938 HRS Rakon Limited
HALFYR: RAK: Rakon September 2013 Half Year Result
Results for announcement to the market
Reporting period 6 months to 30th September 2013
Previous reporting period 6 months to 30th September 2012
Amount NZ$000 % Change
Revenue from ordinary activities 80,481 -10%
Earnings before interest, tax, depreciation, amortisation, impairment & share
based payments (4,709) a -200%
Earnings before interest & tax (44,252) b -1222%
Net (loss)/profit after tax (45,682) b -1054%
Note a: includes share of EBITDA from associates and joint ventures of
$2,870,000 (September 2012: $1,942,000).
b: includes equity accounted earnings of $1,365,000 (September 2012:
Amount per security Imputed amount per security
Interim / Final Dividend Nil Nil
Record Date Not Applicable Not Applicable
Dividend Payment Date Not Applicable Not Applicable
Rakon Limited (NZX: RAK) reports a half year net loss after tax of $NZ45.7
million (m) (September 2012: $4.0m net loss).
This number includes a loss from continuing operations of $21.4m and a loss
from discontinued operations of NZ$24.3m. Total impairments of NZ$32.7m are
reported in the net loss for the period; NZ$7.6m from continuing operations
and NZ$25.1m from discontinued operations.
Following Rakon's announcement on 5 July 2013 to divest an 80% equity
interest in Rakon Crystal (Chengdu) Co. Ltd (RCC sale), the entity is
classified as a discontinued operation (Statement of Comprehensive Income)
with assets & liabilities held for sale (Balance Sheet). Subsequent to 30
September the RCC sale completed.
As a consequence of the RCC sale, Rakon will have a reduced involvement in
the smart wireless device market (SWD). This results in additional impairment
charges of NZ$5.9m against the PP&E assets of the NZ 'cash generating unit'
and $2.9m of SWD related stock provisions.
EBITDA of NZ-$4.7m is reported (September 2012: NZ$4.7m), which includes
NZ$3.8m of provisions for a planned restructure in France and the increase in
stock provisions of $2.9m. After the adjustment of restructure costs and
stock provisions, EBITDA is NZ$2.0m comparative to the previous half year of
NZ$4.7m. A detailed reconciliation of EBITDA to net loss after tax, is
included at Note 4 of the Interim Financial Statements.
The company's operating cash flow of NZ$7.8m, reflects a release in working
capital previously held in SWD and improvements in managing working capital
over the period. Bank borrowings of $36.9m are reported for the period.
Subsequent to 30 September and following the settlement of the RCC sale, bank
borrowings have been reduced to NZ$17.0m in line with the plans set out by
the Board and structured with Rakon's bank.
EBITDA from Rakon's India Joint Venture of $2.4m compares with $1.6m for the
previous half year. The increase is reflective of the growth in the
telecommunications infrastructure market, where Rakon has a strong market
position and product offering in 4G.
The net loss although substantial, is in line with previously announced plans
to structurally align Rakon to those parts of its business where there are
growth opportunities and stronger profit margins. Full year profit guidance
for FY2014 remains unchanged.
Directors Declaration (NZX Listing Rules Appendix 1, 3.1 & 3.2)
The Directors declare that the consolidated financial statements on pages 3
to 20 has been prepared in compliance with applicable Financial Reporting
Standards. The accounting policies the Directors consider critical to the
portrayal of the company's financial condition and results which require
judgements and estimates about matters which are inherently uncertain are
disclosed in note 2.4 of the financial statements that form part of this
End CA:00243768 For:RAK Type:HALFYR Time:2013-11-14 09:38:43