Cirtek nets $3.5M

LAGUNA-based electronics manufacturer Cirtek Holdings Philippines Corp. grew its net profit in the first six months by 8 percent year-on-year to $3.5 million, driven by strong growth in the broadband and antenna systems business in the second quarter.

Bulk of the profits was generated in the second quarter alone, during which net earnings rose by 10 percent year-on-year to $2 million. This was on the back of a 23 percent rise in consolidated revenues to $17.5 million.

For the six-month period, Cirtek’s consolidated revenues went up by 15 percent year-on-year to $32.5 million.

The sales contribution of the radio frequency (RF),microwave and millimeter wave business accounted for 37 percent of the company’s six-month consolidated revenues, rising from 28 percent in the same period last year.

“As the company continues to move up the technology value chain, the revenue mix is expected to shift more towards newer businesses, while the semiconductor business is expected to continue its steady growth,” the company said.

Gross profit margin in the first semester stood at 18 percent while net income margin ended at 11 percent.

For the second quarter, Cirtek said the increase in revenue was due to the growth of the broadband and antenna systems business under Cirtek ATS while semiconductor sales continued to be stable.

Meanwhile, analysts have lowered their estimates for worldwide semiconductor revenue in 2016. Forecasts range from a decline of 0.6 percent to a slight growth of 2 percent due to the slower-than-expected demand for PCs, ultramobiles and smartphones that in turn was reducing the demand for semiconductors in 2016.

But there are several segments seen to drive growth: industrial/automotive, niche markets such as aerospace and medical,cloud computing and cloud infrastructure, consumer technology retail sales driven by the internet of things.

For the RF,microwave, millimeter wave business, Cirtek intends to continue to deliver high-end box build finished products, test-board fabrication, test solutions, and product support businesses required by its customers. It is also developing proprietary wireless products and components for the wireless communication industry. The company expects to begin manufacturing and selling its products by the fourth quarter of this year. On the antenna systems business, Cirtek said it would continue to expand its high capacity, multi-port, multi-band antenna business with US-based Quintel.

To make the most out of its in-house technology capabilities, Cirtek has set up a new subsidiary that will provide wireless infrastructure solutions, both connectivity and content, to large enterprises using internally-manufactured multi-gigabit, millimeter wave backhaul equipment and high-capacity broadband wireless access technologies.

“The company is presently working with two leading Philippine conglomerates to provide robust wireless connectivity solutions for their nationwide businesses and outlets,” the company said.
For the semiconductor business, Cirtek expects steady results for the second half of 2016, with additional orders coming from its top 10 customers. The company said it’s presently undergoing qualification to do business with a top 5 global semiconductor manufacturer.

After completing its third building, the company is preparing to construct a fourth building in anticipation of growing business.

“In recent months, the company was visited by top officials of major companies to discuss potential business and partnerships,” Cirtek said.

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