GPS technology manufacturer Rakon today posted a net profit after tax of $3.4 million, down from $10 million in 2018 but steady underlying earnings.
EBITDA of $13.3 million was slightly up from $12.1 million in the prior year and in line with guidance of $12 million to $14 million.
The Auckland-based company 2018 net profit of $10 million was boosted by a one-off gains of $8.8 million recognised in relation to the sale of property in Argenteuil France and a dilution gain and sale of shares in Thinxtra.
Managing director Brent Robinson said when the one-off gains are excluded it was pleasing to see the year on year growth in core net profit on the back of stronger 4.5/5G telecommunications infrastructure demand and continuing growth in the defence segment.
“The roll-out of 5G continues to be our biggest opportunity and challenge," he said.
"Rakon is well positioned with a good share of business awarded by tier 1 customers. The challenge for Rakon is to meet existing demand and continue to bring to market new products which meet the higher specifications demanded by 5G applications."
During the year, Rakon bought the remaining 51 per cent of joint venture Rakon India Private Limited.
"With Rakon now having full decision-making control of India’s low cost manufacturing operation, it was pleasing to see India’s positive contribution to the group’s full year result,” Robinson said.
The current year showed higher operating costs with the inclusion of Rakon India from May 2018 and one-off costs relating to integrating Rakon India into the wider Group.
Net debt was $7.7 million, from having net cash of $7.4 million, due to the impact of higher working capital requirements to support growing revenue, the acquisition of Rakon India, and the investment in additional manufacturing capacity during the year.