Cirtek nets $1.94 million in Q1

CIRTEK Holdings Philippines Corp. (CHPC) grew its net income by 14% in the first quarter of 2018, driven by a double-digit increase in revenues following the consolidation of its recently acquired firm alongside higher sales from its semiconductor unit.

In a regulatory filing, CHPC reported a net income of $1.94 million in the January to March period, higher than the $1.7 million it generated a year ago. This was supported by a 53% increase in revenues to $25.86 million.

“The increase was accounted for by the three- month contribution of Quintel, a United States-based product and research and development company acquired in August 2017, and growth in semiconductor sales,” the company said.

CHPC acquired Quintel for $77 million last year as part of efforts to expand its footprint in the antenna market that is seen to grow into a $14- billion industry by 2020.

Quintel’s contribution to CHPC’s revenues reached $14.7 million in the first quarter. At the same time, it recorded a net loss of $1.1 million. The listed firm noted that Quintel achieved break- even last March, and is due to become profitable by the start of the second quarter.

CHPC expects Quintel to increase its sales to US telecom firms, AT&T and Verizon, by at least 60% for the rest of the year.

“The company is also looking to complement its in-house product R& D with strategic acquisitions and technology collaboration with third parties,” CHPC said.

Meanwhile, the semiconductor business generated $9.4 million in revenues for the period, up 6% from a year ago.

CHPC noted the semiconductor industry is seen to grow by 5-7% in the next three years. The company expects its business to follow the higher end of the industry’s guidance this year, leveraging on its partnerships with over 70 international customers.

The company registered a 32% increase in cost of sales for the period to $18.1 million, following an increase in expenses for raw materials. The company attributed this to higher sales, higher salaries and wages, depreciation, utilities, and increase in inward freight and duties.

Gross margins improved to 30% during the quarter, higher by 11% than what it posted in the same period last year.

Shares in CHPC were unchanged at P51 each at the Philippine Stock Exchange on Monday. —