Semiconductor chip maker Rakon has tripled its full year profit to a record high on the back of strong demand and sales.
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Key numbers for the 12 months ended March compared to a year ago:
- Net profit $33.1m vs $9.6m
- Revenue $172m vs $128.3m
- Underlying earnings $54.4m vs $23.5m
- No final dividend
The Auckland based company overcame supply chain disruptions and shortages to meet growing demand for its chips used in 5G telecommunications networks, while expanding its range of products used in satellites.
Chief executive Sinan Altug said it coped with significant challenges and disruptions to make significant progress.
"We have scaled up significantly to meet strong core market growth as well as new opportunities stemming from worldwide chip shortages."
Rakon found opportunities as well as obstacles in the current environment of Covid-related shortages of materials and supply, while finding increased demand for technology.
Revenue rose by a third driven in particular by growth in 5G products, which made up about half of its revenue, industrial positioning equipment, and capitalising on the global chip shortage, which was worth nearly $31m.
Altug said it had met increased demand by upping production in New Zealand, but would continue to face tight raw material supply which would mean extended lead times and price increases.
"Capacity constraints, allocations and rising prices from suppliers, unfortunately, remain the norm, and we continue to work hard to mitigate risks around procurement of materials and actively manage higher levels of inventory."
He said Rakon's balance sheet was currently strong with cash on hand well up on the year before so there was no immediate for new capital, with the company's board deciding to pay no dividend this year and reinvest its surplus.
"We are going to continue to invest in our future and that does require capital, but at this point we are in a very comfortable position that will probably allow us to pay down our debt as well as invest for the future."