https://ift.tt/f3UsIMS
Auckland-based component manufacturer Rakon slumped $10.4 million into the red in the six months to the end of September, down from a half million dollar profit in the same half of its 2024 financial year.
Half year revenue of $41.7 million was down from $61.3 million with strong revenue growth in aerospace and defence unable to offset lower demand in telecommunications and positioning.
Telecommunications revenue was down 51 per cent to $16.8 million while positioning was down 23 per cent to $5.5 million.
Aerospace and defence delivered its highest ever revenue result, up 10 per cent to $16.8 million, which Rakon said continued to validate its strategy to invest in new high-growth market opportunities.
“The first half reflected the challenging market conditions, particularly in telecommunications and positioning,” CEO Sinan Altug said.
“Gross margins were impacted by reduced sales volumes, $1.5 million of increased inventory provisions, and one-off adjustments.”
Operational spending was impacted by $1.7 million in unfavourable foreign exchange movements, restructuring and acquisition proposal related costs.
Rakon’s programme to reduce costs and manage its working capital carefully continued, with its global workforce down by 22 per cent year-on-year.
Efforts to optimise inventory had also progressed, with inventory down by a further 14 per cent in the half.
Capex dropped by 6 per cent to $6.9 million with operating expenses relatively flat at $30 million.
This reflected the impact of Rakon’s cost reduction and efficiency initiatives in offsetting the company’s continued growth strategy investments, the company told shareholders.
Growth investments include research and development, up to $10.7 million from $8.9 million in 2024.
That includes expansion of facilities to ramp up production to meet current and future AI and cloud infrastructure, and space orders – including orders from contract wins announced in 2024 to supply subsystems for two new low earth orbit satellite constellations.
Rakon, which was subject to an unsuccessful takeover bid in June, said it retained a strong balance sheet, with net assets of $148.3 million including $15.8 million in net cash, $2.1 million lower than a year ago.