Cirtek’s core profit up 35%

LAGUNA-based semiconductor manufacturer Cirtek Holdings Philippines Corp. grew its core profit last year by 35 percent to $5.1 million, driven by the growth in revenues from the semiconductor and broadband businesses.

In a press statement on Tuesday, Cirtek said consolidated revenue last year amounted to $59.6 million, an increase of 15 percent from the previous year.

Semiconductor sales grew by 5 percent while sales from radio frequency (RF), microwave and millimeterwave products grew at a faster pace of 46 percent.

Last year, the company’s semiconductor unit introduced new packages, including the following: customized over voltage and current protection devices that go into various industrial, telecom and network communications applications; and, power devices that go into in the smallest charger devices that allow simultaneous charging of three electronic gadgets.

Cirtek’s RF, microwave and millimeterwave business through Cirtek Advanced Technology and Solutions Inc. (CATS) continued to manufacture and ship microwave and millimeterwave radio system products to over 30 customers globally. The company estimated that CATS accounted for 25 percent of miilimeterwave link deployments in the US.

In November 2015, CATS secured a multi-year manufacturing contract with US based Quintel, a leading innovator of spectrum and space-efficient base station antennas. The contract is estimated to be worth between $15M to $20 million for the first 12 months, with the potential to double within the next two to three years.

Cirtek completed in December last year the construction of a third building in its Laguna facility. The new facility provides additional production capacity to meet increased orders from existing key customers and to support new contracts.

In 2015, cash flow from operations amounted to $17.7 million, attributed to higher sales, reduction in inventory and shorter days receivable.

Cirtek conducted a successful follow-on offering in 2015, raising P1.6 billion intended for strategic acquisitions, capacity expansion, building construction, debt retirement and working capital requirements.

This year, the company expects sales from its existing businesses to grow by at least 35 percent.

Cirtek noted that the global semiconductor industry was projected to grow between 3-5 percent. By end application, automotive and wireless communications are projected to grow stronger than the total market, whereas consumer and computer are assumed to register slower growth.

The global millimeterwave technology revenue market is expected to grow at a compounded annual growth rate of 45 percent, with a total potential market of $12 billion by 2020. The dramatic surge in wireless data traffic and need for wider network coverage is seen to require operators to make significant investments in the backhaul space.

Millimeterwave applications include last-mile deployment for wireless communication, government security, medical technology and commercial space programs alongside satellite communication products for military and commercial applications.

“The company is currently evaluating acquisition opportunities that will either significantly scale 
up its manufacturing operations or give it access to high-end R&D (research and development) capabilities,” Cirtek said.