Incap Group Business Review for January-March 2017: Revenue growth 26%, operating profit affected by increased material costs

Incap Corporation                                
Interim report                       16 May 2017 at 8.30 a.m. (EET)                                       

INCAP GROUP BUSINESS REVIEW FOR JANUARY-MARCH 2017: REVENUE GROWTH 26%, OPERATING PROFIT AFFECTED BY INCREASED MATERIAL COSTS

The information in this business review concerns the development of Incap Group in January-March 2017 and in the corresponding period of 2016, unless otherwise stated. The figures are unaudited.

Key figures in January-March 2017

  • The Group’s revenue amounted to EUR 11.0 million, up 26% on the corresponding period of previous year (Jan-Mar 2016: EUR 8.7 million).
  • The Group’s operating profit (EBIT) amounted to EUR 1.0 million, down 17% on the corresponding period (EUR 1.2 million).
  • Net profit for the period amounted to EUR 0.66 million, up 2% on the corresponding period (EUR 0.65 million).
  • The company repeats its previous outlook for full year 2017.
 

(EUR thousand)

 
1-3/
2017
1-3/
2016
4-6/
2016
7-9/
2016
10-12/
2016
1-12/
2016
             
Revenue 10,986 8,686 9,186 10,048 10,706 38,626
Operating profit/loss (EBIT) 966 1,165 1,037 1,063 1,121 4,386
Profit/loss for the period 664 651 614 778 699 2,742

Key events of the period

Incap Group’s revenue for January-March 2017 developed favourably both in India and in Estonia, growing by 26% on the comparison period. The growth was mainly based on increased demand of long-term customers.

The operating profit (EBIT) amounted to EUR 1.0 million, showing a decrease of 17% on the comparison period last year. Major reason for the decrease was the higher material costs. Due to the current growth of global electronics market the prices of main commodity raw materials such as copper, led and tin are increasing, resulting in higher component prices. 

The Group’s operating profit margin amounted to 8.8%, being in the upper end of the common levels in the electronics manufacturing services business. During the preceding quarter October-December 2016 the operating profit amounted to 10.5% and in the corresponding period January-March 2016 to 13.4%.

The extension of the export production facilities in India was inaugurated during the review period. Also in the factory in Estonia the manufacturing capacity was increased by a new SMT line.

Outlook for 2017

Incap repeats its previous guidance and outlook for the year 2017. The Group’s revenue in 2017 is estimated to be higher than in 2016 when it was EUR 38.6 million. The operating profit (EBIT) is estimated to be somewhat higher than in 2016 when it was EUR 4.4 million. The figures have been estimated based on the assumption that there are no major changes in exchange rates.

Incap will publish its half-year report for January-June 2017 in accordance with IAS 34 on Wednesday, 23 August 2017.  

Ville Vuori, President and CEO of Incap Group:

“The first quarter of 2017 met with our expectations. The production portfolio was as forecasted a bit unfavorable with respect to profitability due to high material shares and increasing raw material prices, which will take some time to mitigate. The increase in volumes is positive and improves our position in many ways.

Overall, our outlook remains positive. We are expecting organic growth to continue and even though the relative profitability is approaching the market standards levels, we trust in our business model and aim to be among the best in the peer group also in future especially in terms of profitability.”

INCAP CORPORATION
Board of Directors

For additional information, please contact:
Ville Vuori, President and CEO, tel. +358 400 369 438

Distribution:
Nasdaq Helsinki Ltd.
Principal media
The company’s home page www.incapcorp.com

INCAP IN BRIEF
Incap Corporation is an international electronics contract manufacturer. Incap’s customers are leading suppliers of high-technology equipment in their own business segments, and Incap increases their competitiveness as a strategic partner. Incap has operations in Finland, Estonia, India and Hong Kong, and the company currently employs approximately 520 people. Incap’s share is listed on the Nasdaq Helsinki Ltd. as from 1997. Additional information: www.incapcorp.com.