Cirtek to spend up to $8M for capacity expansion
By Arra B. Francia,
Reporter
CIRTEK HOLDINGS Philippines Corp. will be spending up to $8 million in capital expenditures (capex) in 2018 to further support its expansion and meet the supply requirements of its recent acquisitions.
“We got about $6-8 million in capex, group-wide… The chunk is really more for expanding our capacity,” Cirtek Chief Finance Officer Anthony S. Buyawe told reporters after the company’s press conference in Makati last week.
Mr. Buyawe explained the company expects higher demand for its products following the acquisition of United States-based antenna maker Quintel for $77 million in July 2017.
“As you can see with Quintel, we expect our sales to double therefore we need to expand our manufacturing capacity for that… And then obviously as we grow the business we will need more working capital so that’s gonna be for the 2018 capex,” Mr. Buyawe said.
The listed electronics manufacturer is also planning to add a fourth manufacturing facility in the Laguna TechnoPark. Cirtek currently operates three buildings inside a 20,000-square meter complex in Laguna.
“Right now we’re fully utilized in terms of floor space, so at some point we will have to build the fourth facility,” Mr. Buyawe said.
Remaining portions of the capex will be used for quality assurance of equipment, among others.
The group’s capex for 2018 is slightly higher than its actual spending of around $5-6 million in 2017, according to the Cirtek official.
For full-year 2017, the company targets consolidated revenues to hit close to $100 million, as it already expects sales from Quintel to contribute to its top-line. In terms of net income, Mr. Buyawe said it may be better than 2016’s earnings of $7.12 million, as Quintel’s impact on Cirtek’s bottom line will not yet be felt.
“Our goal for 2018 is have Quintel break even for the first quarter, and then thereafter be profitable,” he said.
Cirtek has been aggressive on acquisitions in 2017. Last December, the company also acquired a 49% stake in local e-commerce firm MultiPay for P100 million. MultiPay provides payment platforms and solutions to companies like Bayad Center, EasyPay, and DragonPay.
MultiPay is expected to contribute P500 million in revenues in 2018.
Meanwhile, Cirtek is aiming to grow Quintel into a $500-million revenue firm in the next three to five years, making it eligible for listing at the Nasdaq stock market.
Cirtek saw its net income attributable to the parent rise 154% to $2.95 million in the first nine months of 2017, following a 25% uptick in revenues to $67.9 million during the same period.
