Rakon sells French property for 2.7M euro as manufacturing shifts to India
By Sophie Boot
March 29 (BusinessDesk) - Rakon has sold its former manufacturing site in France for 2.7 million euros, as it continues
to shift its manufacturing focus to India.
The company said its Argenteuil property was previously the main operational site for manufacturing discrete oven
controlled crystal oscillators (OCXO), though that has moved to Centum Rakon India in recent years.
Rakon shifted manufacturing to India in 2012 in an effort to cut costs, although it booked a $3.2 million impairment
charge on the Centum joint venture last year, valuing it at $3.7 million as at March 31, 2017. In February, the company
said it wanted to buy out Centum Electronics, its senior partner in the Indian joint venture Centum Rakon India Private
Ltd, for US$5.5 million, to give it control of a core part of its manufacturing strategy.
"The property sale has been achieved following a lengthy re-zoning process," Rakon said. "Rakon will continue to
maintain a research & development centre in the area, with employees relocated to a leased building in Gennevilliers, France."
The gain from sale will be reported in the company's annual report for 2018 but it made no full-year earnings guidance
adjustment, as the accounting gain was included in the forecasts it already gave to the market, it said. Rakon
previously said it expects improved earnings in the second half, and expects to report full-year underlying earnings
before interest, depreciation, tax and amortisation between $10.7 million and $12.7 million.
The shares last traded at 19.5 cents, virtually unchanged from 12 months ago.
(BusinessDesk)
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