Listed technology firm Rakon has moved back into profitability, growing all segments of its business.
After posting a $5.4 million loss in its last financial year, the high-tech crystal maker has turned its fortunes around to achieve a $5.6 million after-tax profit in the six months to September 31.
Rakon chief executive Brent Robinson said the firm was focused on growing its market share in "smart wireless devices", like smart phones, as well as in telecommunications infrastructure.
"The market growth in smart wireless devices has been strong coming into this financial year, mainly driven by devices such as smartphones and [Apple] iPads," he said.
The Mt Wellington company manufacturers a range of high-tech, quartz crystal products that are used in telecommunications infrastructure and consumer goods.
Rakon also reported a revenue of $94.6 million for the first half of its current financial year, up 31 per cent on the earlier comparable period. Earnings before interest, tax, depreciation and amortisation (ebitda) were up by 778 per cent on the previous year, at $13.5 million.
Goldman Sachs analyst Tristan Joll said the result showed Rakon's strategy to refocus its high-volume manufacturing in Auckland towards supplying the smart phone market was working.
Robinson said the company was continuing to expand its share of the telecommunications market, adding that demand from network infrastructure customers had been strong.
"New emerging technologies which we supply, such as femtocells [small cellular base stations], have also begun to ramp up in volume, which helps to provide a sound base for long-term growth," he said. "We believe we have a leading position in 3G and LTE base stations where we are seeing significant growth in rollout."
Joll said telecommunications infrastructure was a huge market in which Rakon was only a small player. There would be some real opportunities for the New Zealand firm in that sector.
Last month Rakon reported a record month in its UK operation, which specialises in products for the telco sector, mainly on the back of increased sales into telecommunications infrastructure.
Robinson said the company expected demand in the second half of the 2011 financial year to be similar to the first.
Joll said the opening of Rakon's manufacturing facility in China would allow the firm to lower its production costs. The Chengdu site is expected to be commissioned in July.
Rakon's share price closed steady at $1.28 yesterday.
Rakon back in black with $5.6m
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