Rakon to sign US$56 mln contract with China’s Huawei

Published: Mon 20 Aug 2012 09:05 AM
Rakon to sign US$56 mln contract with China’s Huawei
By Hannah Lynch
Aug. 20 (BusinessDesk) - Rakon, the communications components maker which dropped out of the NZX 50 Index in June, will today sign a letter of intent with Huawei Technologies, quadrupling its sales to the Chinese-based company to US$56 million over the next five years.
Huawei will use Rakon's frequent control products in its handsets, smart devices and infrastructure programmes. A signing ceremony will be held at Wellington's New Zealand Trade and Enterprise office.
"The letter of intent recognises the greater scale and breadth of our product range, validates our commitment to a strategy of globalisation and our investment in operations in China," managing director, Brent Robinson said in a statement.
The high New Zealand dollar and weaker demand from the telecommunications industry has weighed on Rakon's earnings. In May, the Auckland-based company's full-year earnings before interest, tax, depreciation and amortisation fell 47 percent to $13 million including a share of ebitda from associates and joint ventures.
Shares in the company last traded at 42 cents and have shed about 51 percent over the past year. They traded as high as $5.50 in November 2007.
Independent, Trustworthy New Zealand Business News
The Wellington-based BusinessDesk team provides a daily news feed for a serious business audience.
Contact BusinessDesk

Next in Business, Science, and Tech

The Sky Is The Limit - Air New Zealand To Relaunch 14 International Routes In 16 Days
By: Air New Zealand
Update On Hidden Economy Real Estate Campaign
By: Inland Revenue Department
Consumer Confidence Plummets To Record Lows As Financial Pressures Mount
By: Westpac
NZ Economy: Prevailing Headwinds
By: BusinessNZ
Shared Cheese Heritage Should Be Shared Not Stripped
By: NZ Specialist Cheesemakers Assn
Download Weekly - $60 million for more rural connections
By: Digitl
View as: DESKTOP | MOBILE © Scoop Media