New businesses boost Cirtek’s profit

Laguna-based manufacturing firm Cirtek Holdings Philippines Corp. saw a 15-percent year-on-year growth in net profit in the first nine months to $5.7 million on the back of the double-digit growth in revenues, particularly from new businesses.

For the nine-month period, consolidated revenues amounted to $54.1 million, up by 19 percent year-on-year. The sales contribution of the radio frequency, microwave, millimeter wave and smart antenna business – Cirtek’s new business segments – accounted for 35 percent of consolidated revenue, rising from 26 percent in the same period last year.

“As the company continues to develop and manufacture complete systems and more complex products, the revenue mix is expected to shift more towards newer businesses, even as semiconductor is expected to continue its steady growth,” the company said in a press statement.

For the third quarter alone, Cirtek’s net profit rose by 29 percent year-on-year to a record quarterly bottom-line of $2.1 million while consolidated revenues expanded by 25 percent to $21.6 million during the period, likewise a record level for the company.

Core earnings – which excluded earnings from nonrecurring items – went up by 29 percent year-on-year in the third quarter to $2.1 million. The increase in revenue for the third quarter was attributed to the significant growth of the company’s broadband and smart antenna systems business under subsidiary Cirtek ATS. Semiconductor sales, on the other hand, continued to be stable with its 6 percent year-on-year growth in the third quarter to $14.3 million.

Revenues from the broadband and smart antenna business for the third quarter alone amounted to
$7.3 million, marking a 95 percent year-on-year increase. In terms of contribution to total sales, this business accounted for 34 percent of sales during the quarter, 12 percentage points higher than the same period last year.

The company expects steady results for the fourth quarter, with additional orders coming from its top 10 customers. The group recently qualified as a contract manufacturer for a top five global semiconductor company. Commercial production will begin in April 2017.

Cirtek is also set to construct its 4th building in its Laguna Technopark facility in anticipation
of growing business for both Cirtek ATS and Cirtek Electronics Corp.

“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,” Cirtek said.