Rakon turns to annual loss as telcos pull back spending 19 May 2016
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- NZ economy expands at fastest pace in two years Business
- New Zealand food prices fall in February Business
Thursday 19 May 2016 10:01 AM
Rakon turns to annual loss as telcos pull back infrastructure spending
By Tina Morrison
May 19 (BusinessDesk) - Rakon, the high-tech components manufacturer, turned to an annual loss after telecommunications companies pulled back infrastructure spending, hurting sales at its largest unit.
The Auckland-based company posted a loss of $1.7 million, or 0.9 cents a share, in the 12 months ended March 31, from a profit of $3.2 million, or 1.6 cents, a year earlier, it said in a statement. Underlying earnings before interest, tax, depreciation and amortisation fell to $9 million, within its forecast $9 million-to-$10 million forecast range, from $15.4 million a year earlier. Revenue fell 14 percent to $112.7 million.
Shares in Rakon dropped 9.1 percent to 25 cents and have slid 9.8 percent this year.
Rakon said earnings have been hurt as major network operators around the world favoured investment in 5G bandwidth and merger and acquisition activities over spending on base stations and other infrastructure. That's seen revenue from telecommunications, the company's largest unit, slump by a quarter to $53.4 million, outweighing gains in sales of its global positioning and space and defence units.
The move to 5G would create a need for increased infrastructure investment to cope with growing demand for an ever-expanding range of applications and faster network speeds, said managing director Brent Robinson.
Rakon has strong relationships with both network equipment and original design manufacturers, meaning it was well-placed to benefit from an upturn in infrastructure investment, but remained cautious about forecasting exactly when demand would rebound, he said.
The company's global positioning unit boosted revenue 3.7 percent to $31.5 million.
Robinson said the increasing usage of GPS technology in a range of industries was generating significant opportunities for Rakon. Changing technologies, including the decline of the personal navigation device in favour of other solutions, was helping to drive increased margins in Rakon’s global positioning business while the company’s automotive customers were looking beyond GPS to address advanced connectivity applications for smart cars, he said.
Revenue at is space and defence unit increased 9.6 percent to $25.3 million. The unit expected increased sales in the coming year, with the introduction of new products following the completion of several key long-term development projects during the 2016 financial year, Robinson said.
A breakdown of revenue by region shows the biggest decline came from Asian customers, with sales dropping by a quarter to $48.7 million. Sales to North American customers increased 35 percent to $23.9 million while European revenue slid 18 percent to $37.2 million.
The company didn't declare a dividend.
(BusinessDesk)
ends
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more