15 Nov 2011

Rakon blames high dollar for loss

1:19 pm on 15 November 2011

Rakon's books have slipped into the red with a small half year loss which the company says is due to the high New Zealand dollar.

The company lost $259,000 in the six months to the end of September, compared with a profit of $5.6 million the same period a year ago.

Rakon makes and exports components for global positioning systems and mobile phones and is one of the sharemarket's Top 50 companies.

Its managing director Brent Robinson says the business's underlying growth has been hurt by the strength of the New Zealand dollar.

Revenue was flat but earnings before interest and tax fell 54%to just over $6 million.

Mr Robinson says a 14% gain in revenue was undermined by the currency, which averaged 81 US cents - 10 cents higher than the same period a year ago.

He says the prolonged strength of the dollar is a problem, not only for Rakon but for all New Zealand exporters and manufacturers.

Despite the challenging economic environment, Mr Robinson says Rakon is on track to meet its projected earnings before interest and tax of between $14 million and $18 million.

The company will not pay shareholders a dividend.