Crystal timing devices manufacturer Rakon is blaming the high New Zealand dollar for its $3.5 million bottom line first-half loss.
The loss compares with a $5.9 million profit in the same six months ended September 30 a year earlier.
Rakon's share price fell 8.96 per cent to 61 cents on Tuesday. This is below the previous low of 62 cents during the global financial crisis in 2009. The shares have fallen from $1.29 in January.
Before taking currency translation differences and other hedging into account, the net loss was $259,000, down from a net profit of $5.6 million in the previous first half.
Managing director Brent Robinson said significant underlying business growth was hurt by the currency's strength.
The New Zealand dollar averaged 81 US cents during the latest six months, 10 cents higher than in the previous first half.
Revenue in US dollars rose 14 per cent, while in New Zealand dollars it was flat at $94.6 million and earnings before interest, depreciation and tax (Ebitda) fell 55 per cent to $6.2 million.
The growth in US dollar sales reflected increased sales for smart wireless devices and for applications for space and defence industries, Mr Robinson said.
"The prolonged strength of the New Zealand dollar is a problem not only for Rakon but for all New Zealand exporters and manufacturers," he said.
Mr Robinson said the economic environment is challenging but he reaffirmed previous guidance that full-year Ebitda will be between $14 million and $18 million.
The earthquake in Japan had an impact on the supply chain and European economic uncertainty hurt earnings.
Telecommunications customers are buying less and are cutting inventories and Rakon is responding by reducing indirect cost.
However, the proliferation of smart wireless devices is putting pressure on telecommunications network capacity, which will increase demand for Rakon's products.
The company is not paying a final dividend.
BusinessDesk/NZN