KEY POINTS:
Global Positioning Systems (GPS) maker Rakon expects to achieve an average exchange rate for the year of US72c, which should put its operating profit in the middle of the range expected by brokers.
The company told shareholders at its annual meeting that brokers expect its full year earnings before interest, tax, depreciation and amortisation to be in a range between $23.5 million and $34.4 million.
"As we have previously explained, movements in the exchange rate impact significantly on our earnings," the company said.
Taking into account exchange rates in the year to date, the level of exchange rate cover the company had in place, and assuming an average spot rate of US68c for the balance of the year, the company expected to realise an average rate of US72c for the whole year.
The company said markets have weakened and this was not expected to change in the near term.
"From New Zealand we now expect sales volume for the current financial year to be approximately 20 per cent ahead of 2008."
Overall sales volume in the year to date was slightly up on the same period last year but product mix had improved, which was improving earnings.
"The recent severe softening in the New Zealand dollar provides a good offset to the slower than expected markets," the company said.
Rakon shares closed down 5c yesterday at $2.75.
- NZPA
