Menu
Rakon lifts during lockdowns to deliver a robust first half

Rakon lifts during lockdowns to deliver a robust first half

Surging telecommunications sector demand is not expected to continue in the second half of 2021

.

.

Credit: Supplied

Telecommunications and GPS component maker Rakon reported a strong first half result this morning, increasing both revenue and earnings despite the shock of the COVID-19 lockdowns.

Revenue was up 5 per cent to $59.5 million from $56.9 million year on year, EBITDA $11.4 million from $6.9 million and net profit after tax of $4.6 million from $1.3 million.

Despite the initial effects of Covid-19 being severe, prompt mitigation actions in the first quarter and increased demand in the second lifted the business.

From late March through April, manufacturing at NZX-listed Rakon’s plants in New Zealand and India was restricted or shut down. 

Actions including agreed reductions in staff salaries, directors’ fees and rents, cuts to discretionary expenditure and obtaining government support relieved pressure on the business. 

Combined with a "bubble" of high demand in the telecommunications segment from July onwards, the measures produced the robust earnings result. 

However, earnings growth was not expected to continue at the same rate for the remainder of 2021, the company told shareholders today, and Rakon’s full year guidance of $16 million to $18 million underlying EBITDA issued in August remained valid.

Telecommunications revenue was 19 per cent higher than the same period last year and made up 64 per cent of Rakon’s total revenue. 

The increase in demand in the second quarter was mainly out of the New Zealand business as many tier 1 customers managed their supply chain risks through building safety stock. 

In the second half of 2021, however, with ongoing economic uncertainty from geopolitical tensions and COVID-19, mobile network operators appeared cautious about their 5G deployments. Growth in the telecommunications segment was therefore expected to be less pronounced.

Revenue from the global positioning segment continued to trend down in the first half as the high volume, low margin GNSS (global navigation satellite system) business continued to decline. 

Revenue was also lower from aviation customers who were impacted by Covid-19. 

The global positioning segment was expected to improve in the second half as demand for emergency beacon and agricultural applications returned and Rakon continued to focus on its high margin, precise positioning products.

The space and defence segment was lower than the same period last year. Overall, the segment was also expected to improve in the second half and exceed the full year 2020 revenue recorded. 

This was expected to be driven by new business supplying into a low earth orbit satellite deployment and growth in the domestic space business in India.

The directors declared that no dividend was to be paid for the interim period.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags GPSTelecommunicationsComponentsrakoncovid-19

Featured

Slideshows

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners

More than 500 channel leaders gathered in Auckland on 21 October at the ​Reseller News Innovation Awards ​2020 to celebrate the achievements of the New Zealand technology industry's top partners, start-ups, vendors, distributors and individuals.

Channel gathers to celebrate the Reseller News Innovation Awards 2020 winners
Meet the winners of the 2020 Reseller News Innovation Awards

Meet the winners of the 2020 Reseller News Innovation Awards

Reseller News honoured the standout players of the New Zealand channel in front of more than 500 technology leaders in Auckland on 21 October, recognising the achievements of top partners, start-ups, vendors, distributors and individuals.

Meet the winners of the 2020 Reseller News Innovation Awards
Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Show Comments