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Global 5G rollouts drive sales for Rakon's new product sets

Global 5G rollouts drive sales for Rakon's new product sets

Components support 5G rollouts in South Korea, China and the United States

Credit: Supplied

Auckland-based component maker Rakon today posted a net profit after tax of $4 million for the year to 31 March 2020, up from $3.4 million in 2019.

Underlying EBITDA was $14.8 million was ahead of guidance of $14 million and also from $13.3 million reported in 2019. 

Rakon said the improvement reflected a much stronger than expected finish to the year from a higher share of business in the telecommunications segment.

Reported Underlying EBITDA for the year also included a positive impact of $3.1 million from the adoption of new accounting standards.

Momentum continued to build in the telecommunications market during the year, the company told shareholders today. 

Its new Mercury+, Neptune and Mercury ultra-stable frequency control products had gone into the early deployment of 5G in South Korea, China and the US. 

Rakon said its products were designed into all of the major global suppliers of 5G technology, so remain well placed for future growth.

Managing director Brent Robinson said Rakon was confident the demand for 5G would accelerate with increasing global expectation for highly reliable, high-speed communications and data transfer. 

The call for high performance frequency control products is also emerging for autonomous vehicle and health applications and continues to evolve in the space and defence and global positioning markets. 

Rakon’s revenue was also higher from datacentre customers, as they invested to meet growing world-wide data needs. 

Further expansion into this industry would continue to be a focus in the coming year while Rakon continued to move away from low margin consumer products.

Revenue from global positioning, for instance, was lower due to price competition within a particular high volume, low margin segment. 

Space and defence also saw lower revenue due to the phasing of long-term projects, however, Rakon remained confident and well placed in the market, it said.

In particular it is exploring new opportunities for its products in low earth orbit satellites, replacing traditional geo orbital satellites.

Covid-19 has had a negative short-term impact on the group with the New Zealand and Indian manufacturing operations severely restricted for periods of time, however the medium to long term effects were not expected to be materially adverse. 

All manufacturing is forecast to return to full production by the end of June 2020.

No dividend will be paid for 2020.


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