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Incap's 1H Revenue Up 15% YoY
August 3, 2011 |Estimated reading time: 3 minutes
Highlights:
- Revenue for the first half of the year stood at EUR 33.7 million, or 15% higher than during the comparable period in the previous year (1-6/2010: EUR 29.3 million).
- Operating profit (EBIT) was EUR -1.0 million (EUR -2.8 million)
- Earnings per share were EUR -0.11 (EUR -0.26).
- Sales efforts and improvement of the general economic situation accelerated revenue growth.
- The large share of material- and labour-intensive products in production increased costs.
- The company raises its revenue estimate for 2011 and repeats guidance for profitability.
This interim report has been prepared in accordance with international financial reporting standards (IFRS) - IAS 34 Interim Financial Reporting standard. The accounting principles of the interim report are the same as those used in the preparation of the 2010 financial statements. Unless otherwise stated, the comparison figures refer to the same period in the previous year. This interim report is unaudited.
Sami Mykkänen, President and CEO of Incap Group, said, "Revenue developed favourably in the strategic focus areas of energy efficiency and well-being technology industries. The improving general economic situation has stimulated demand and the recovery of investment activities is especially evident in the increased sales of electrotechnical devices."
"Even though our profitability in means of EBIT improved considerably compared to the same period last year, we cannot be satisfied with the negative result. Our main objective is to improve profitability and during the review period we have implemented a systematic adjustment of customer prices and used competitive tendering to select materials suppliers."
"After the renewal of our production structure, our most important development target today is the enhancement of our global material management. We have established a sourcing office in Hong Kong, which gives us better opportunities to increase the efficiency of sourcing operations and to lower material prices. This increases our competitiveness and intensifies our global customer service."
Revenue and Earnings in April-June 2011
The second-quarter revenue for the year amounted to EUR 17.7 million, up nearly 11% from the first quarter and 12% year-on-year.
The second-quarter operating loss increased somewhat compared to the first quarter of the year, which was due to the large share of material- and labour-intensive products in production and increased variable personnel expenses. Nonetheless, the operating profit was clearly better than during the comparable period in the previous year, when it was EUR -1.1 million.
Revenue and Earnings in January-June 2011
Demand for Incap's manufacturing services developed positively during the first half of the year. Revenue grew by 15% from the comparable period in 2010 and stood at EUR 33.7 million (1-6/2010: EUR 29.3 million). Revenue increased in both customer sectors. The development of revenue was accelerated by the improvement of the general economic situation and the recovery of investment activities, as well as by enhanced sales efforts. The global shortage of components slowed down the increase at the beginning of the year but the availability of components improved significantly towards the end of the review period.
Incap Group's result remained negative even though profitability increased considerably compared with the same period the previous year. Operating loss in January-June was EUR -1.0 million (EUR -2.8 million) or -3.1% of revenue (-9.5%).
Profitability was negatively affected by rising material expenses. The revenue share of material- and labour-intensive products was large especially during the second quarter. In addition, the global component shortage increased material and logistics costs slightly.
Personnel expenses decreased by some EUR 1.5 million year-on-year, which was mainly attributable to the merger of two electronics factories.
Net financial expenses increased to EUR 1.1 million (EUR 0.6 million). Depreciation stood at EUR 1.1 million (EUR 1.5 million). Loss for the period was EUR -2.1 million (EUR -3.4 million).
Return on investment was -6.8% (-18%) and return on equity -96.1% (-126.5%). Earnings per share were EUR -0.11 (EUR -0.26).
For the full report, click here.