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Sales boom returns 3S Photonics to profit

Having near-doubled sales in the past year, the Paris-based manufacturer of optoelectronic components for fiber-optics expects to grow by another 20% in 2009.

3S Photonics, the GaAs- and InP-based component maker formerly owned by Avanex and Alcatel Optronics, has posted an 87 per cent increase in sales for fiscal year 2008.

In the 12 months that ended on June 30, the privately owned company recorded revenue of €27.9 million ($39.6 million), and tripled its net profit to €2.1 million as the fiber-optic recovery gathered momentum.

Alexandre Krivine, the entrepreneur who, along with Didier Sauvage, acquired the business from Avanex in April 2007, expects that momentum to keep growing in 2009:

"We are expecting an approximately 20 per cent increase in turnover [in] the next fiscal year, building on a continued organic growth of the company [and] driven by the renewal of the product portfolio," said Krivine, who is both president and CEO of 3S Photonics.

He believes that the optoelectronics market itself grew 15 per cent over the past year, something that 3S was able to exploit with the launch of new products such as 980 nm GaAs-based pump lasers that are used in submarine amplifier components to boost fiber-optic signals (see related stories).

"Sales of these highly strategic components - pump laser modules, fiber Bragg grating (FBG)-based filters and photodetectors - multiplied by three or four during fiscal year 2008," said the company in its earnings statement.

With the Paris-based firm s operating profit also markedly improved "“ from a €7.0 million loss in fiscal 2007 to a profit of €2.1 million in 2008 "“ the fab s underlying financial health looks to be in far better shape now than it did at any time under Avanex s control.

With a current headcount of around 160, the payroll at 3S Photonics is almost exactly the same as it was when Avanex off-loaded the business (see "Entrepreneur takes over Avanex s French fabs").

Having restored profitability in such a short time, the company is now looking towards the longer-term future. "In the medium term, we plan to double our annual revenues through external growth operations," Krivine said.

Beyond that, 3S is also involved in what it describes as two "major" collaborative research projects. One project is focused on developing high-power/low-noise optical modules, while the second is aiming to produce photonic integrated circuits, or PICs, for broadband network applications.

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