Computer chip company Rakon has lifted its profit forecast for the third time this financial year, after successfully mitigating disruptions to its supply chain over the holiday months.
(File image) Photo: 123RF
The company, which produces chips for 5G telecommunications networks and devices, upgraded its full-year underlying profit guidance to be between $49 million and $53m, up from between $44m and $49m.
"As previously advised, the significant supply chain risks have required month-to-month management of raw materials and parts to meet orders for FY22," said Rakon managing director Brent Robinson.
"We are now delighted to report we have largely overcome these challenges for the remainder of FY22 and have secured sufficient inventory to meet customer orders."
Reaching the top end of the new guidance was contingent on the company navigating the Omicron outbreak in the community and the subsequent risks to production, he said.
The Omicron variant had put some strains on its teams in France and India, and its emergence now in New Zealand had warranted careful management of health protocols to prevent infection among local staff, Robinson said.
This included taking the temperature of all on-site staff every day, mandatory mask wearing, and social distancing.
"We have also introduced random rapid antigen testing and a wearable Bluetooth-enabled contact tracing card for all staff on site, and we have reduced the numbers of staff on site with some non-production employees working from home."
Rakon had been a surprise benefactor of the pandemic, as it received a significant increase in orders for its products as a result of an extensive global computer chip shortage.
This was a consequence of the impact of lockdowns on production worldwide and a fire at one of the world's largest manufacturing plants in Japan.
The shortages coincided with a boom in demand for consumer technology devices and telecommunication companies pressing on with their roll-out of 5G networks.
The mid-point of Rakon's new profit guidance is 73 percent higher than the mid-point of the forecast the company issued at the beginning of the current financial year.