Photo: 123RF
Inflationary pressures and increased investment have seen computer chip maker Rakon post a lower full year profit, but the company has declared its maiden dividend on the back of ongoing demand.
Key numbers for the 12 months ended March compared with a year ago:
- Net profit $23.2m vs $33.1m
- Revenue $180.3m vs $172m
- Underlying earnings $42.2m vs $54.4m
- Final dividend 1.5 cents per share vs no dividend
Sinan Altug Photo: Supplied / Rakon
Chief executive Sinan Altug said 2023 was "the best year ever" for Rakon's core business, with ongoing growth in global demand for its products across all key markets.
"I'm proud that we were able to deliver on all of the key milestones for our three-year growth plan which we outlined to shareholders last year," he said.
Underlying earnings fell 23 percent and was at the mid-point of its guidance, reflecting the increased investment and inflation pressure.
Operating expenses increased by 19 percent to $9.5 million due to strategic investments.
"The strategic investments we are making in growth provide a strong foundation for future expansion in both core and new markets," Altug said.
The company said it was nearing completion of its new manufacturing facility in Bengaluru, India, which was on budget.
Rakon chair Lorraine Witten said today "marks a landmark" for the company with the start of dividends.
Revenue grew 5 percent, with telecommunications chip sales growing 17 percent due to ongoing growth in 5G and 4G networks across the world.
It said inventory levels increased over the first half of the year, as part of a strategy to build stocks of raw materials and finished products to mitigate supply chain risks.
Looking ahead, the company forecast underlying earnings to be between $26m and $34m, as computer chip stocks returned to normal following the recent shortage.
Revenue is also forecast to take a $10-15m hit as a result.
However, Rakon said its long-term growth outlook remains strong with further opportunities due to the ongoing growth in areas including 5G, autonomous products and cloud computing.