Cirtek targets $120-million revenues for this year
CIRTEK HOLDINGS Philippines Corp. expects to book $120 million to $125 million in revenues this year, driven by the additional capacity of its Laguna plant and contributions from newly acquired tech firm Quintel.
Cirtek Chief Financial Officer Anthony S. Buyawe on Monday said the $77-million deal to acquire Quintel, which provides highperformance antenna solutions to telecom carriers in North America, will add around $20 million to the company’s topline for 2017.
“With this Quintel acquisition, we should significantly see better growth than our original forecast... We are looking at probably this year an additional $ 20- million topline, next year we’re looking at over $100-million addition,” Mr. Buyawe said in a press briefing in Makati City.
With a full- year consolidation under the Cirtek group, Mr. Buyawe noted Quintel’s contributions to revenues could reach $100 million in 2018.
The company’s earlier forecast was to grow revenues by 33% year on year, from the $77 million it generated in 2016.
Explaining the rationale for the acquisition, Mr. Buyawe noted Quintel would help address the growing demand of large telecommunications companies. This is also part of the company’s effort to enter the antenna market, which has grown from $4.3 billion in 2014 to $5.5 billion in 2016, showing a 13% compounded annual growth. By 2020, the industry is expected to be worth $14 billion.
“We are a high-tech company and as such we’ve seen a lot of rich technologies and intellectual property that Quintel has… We feel by integrating vertically, we do have an advantage in a sense that we control the R&D, the product design, quality as well as the manufacturing side. So we’re looking at a complete business system for Cirtek,” Mr. Buyawe said.
Given its Quintel’s foothold in North America, Cirtek is also planning to enter Latin American markets via Puerto Rico. The company also has a marketing presence in the United Kingdom, which it will use as a “jumping board” to promote its products to Europe.
Cirtek’s revenue and profit growth is also expected to be fueled by the additional capacities its Laguna manufacturing plant would have by next year.
“Volume for next year to meet that topline indicated would be about 30,000 units. This year, we’re looking between 20,000 and 22,000 units. So there’s this significant uptick within our capacity requirements to meet that revenue forecast,” Cirtek ViceChairman and President Roberto Juanchito T. Dispo said.
Cirtek is also eyeing to slash the cost of shipping its products to the United States, which is currently done via air transport.
“The objective is to improve the supply chain management, choose a country with a better freight services to the US that can bring down the costs. We are targeting sea shipment of these antennas to US,” Mr. Dispo said.
Asked if they have more plans for acquisitions, Mr. Dispo said Cirtek is looking at one to two more within the next two years in order to help its transformation into a “very high-tech company.”
Earnings of Cirtek grew by 14.7% to $849,395 in the first quarter of 2017, following a 12% increase in revenues to $17 million.
Trading of Cirtek shares were suspended by the stock exchange on Monday, pending its compliance with the disclosure requirements for substantial acquisitions.