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Rakon posts interim loss

NZ Newswire logoNZ Newswire 16/11/2016 Paul McBeth

Rakon has posted a first-half loss, blaming a sluggish telecommunications network industry for lacklustre sales.

The Auckland-based company posted a net loss of $5.7 million in the six months ended September 30, from a profit of $1.1m a year earlier, it said.

Revenue slumped 21 per cent to $46m, and underlying earnings before interest, tax, depreciation and amortisation plunged 90 per cent.

The shares fell 10 per cent to 18 cents, matching a record low touched in 2013 and making them the biggest decliner in early trading on the S&P NZX All Capital Index.

"Network operators had continued during H1 to defer investment in infrastructure, affecting Rakon's sales to equipment manufacturers," managing director Brent Robinson said. "Initiatives to reduce Rakon's annual operating expenses by 20 per cent were almost completed."

Rakon tilted its focus to the telecommunications sector after rivals in the smart wireless market caught up, turning what was once a niche product into a commoditised one. That shift helped Rakon return to profitability in the March 2015 year, but a slump in spending by network operators weighed on the Kiwi firm in 2016 and pushed it back into the red.

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