INCAP GROUP INTERIM REPORT JANUARY-JUNE 2009: REVENUE DECREASED AS
PLANNED - RESULT IMPROVED CLEARLY
(Thomson Reuters ONE) - Incap Corporation Stock Exchange Release 5 August 2009 at 8:30 a.m. * Revenue in January-June decreased by approximately 24% on the same period the previous year, amounting to EUR 35.4 million (Jan-Jun 2008: EUR 46.7 million) * Focus of business volume shifted over to energy efficiency and well-being technology products, whereas business with telecommunications products was decreased strongly according to the restructuring plan * Operating profit (EBIT) improved on the same period the previous year, amounting to EUR 1.0 million negative (EUR 1.9 negative) * Capacity and cost structure were adjusted in line with the reorganisation programme, while at the same time creating prerequisites for growth in selected business areas in energy and well-being, which provide good prospects for improved profitability * Net profit for the report period amounted to EUR 2.0 million negative (EUR 2.7 million negative)This unaudited interim report has been prepared in accordance withinternational financial reporting standards (IFRS). Unless otherwisestated, the comparison figures refer to the same period the previousyear.Sami Mykk?¤nen, the President and CEO of Incap Group: "The decrease inrevenue was due to a planned and controlled winding down of thehigh-volume manufacturing of telecommunications products. Othercustomer industries have developed positively, without any surprises.We continued with our reorganisation and restructuring programme andmanaged to cut costs and develop our business operations as plannedcompared with the first half of last year. The increase in financingcosts continued to burden net profit.The restructuring has proceeded as planned and we have made advancesin new customer acquisition. New inquiries are at an active phase inIndia, in particular, where the quotation base and demand for designservices by global customers have grown sharply. The introduction ofmodern production premises has further enhanced the opportunities forbusiness growth in India.Improving profitability is still our key challenge, so we willcontinue to adjust the production capacity, improve the efficiency ofmaterials management and cut fixed costs. At the same time wecontinue with strong development of our business operations inselected focus areas."Revenue and earnings in April-June 2009Revenue during the second quarter totalled EUR 16.9 million(4-6/2008: EUR 26.4 million), or 36% less than in the same period in2008. Decrease in revenue was due to the expected discontinuation ofvolume production in telecommunications. Revenue developed positivelyespecially in well-being technology products, whose sales increasedin the second quarter compared with both the first quarter and thecorresponding period the previous year.Operating profit for April-June was EUR 0.5 million negative (EUR 0.6million negative), representing 2.8% negative (2.3% negative) ofrevenue. Net profit for the second quarter amounted to EUR 1.0million negative (1.0 million negative). In particular, net profitwas reduced by the increase in financing expenses by about 40%compared with the same period the previous year. Earnings per sharewere EUR 0.08 negative (EUR 0.08 negative).Revenue and earnings in January-June 2009Revenue for January-June totalled EUR 35.4 million (1-6/2008: EUR46.7 million), or 24% less than in the same period in 2008.The mainreason behind the decline in revenue was the planned decrease inrevenue from the high-volume manufacturing of telecommunicationsproducts by about EUR 9 million on the same period the previous year.Revenue developed steadily in the strategic focus areas in energyefficiency and well-being technology. Of the revenue for the firsthalf of the year, EUR 1.6 million represented the sale of materialsof products to be discontinued to customers.Operating loss reduced by almost one half with operating profitamounting to EUR 1.0 million negative (EUR 1.9 million negative),representing 2.8% negative (4.1% negative) of revenue. The efficiencymeasures in line with the reorganisation programme reduced costs,fixed costs being EUR 1.6 million lower than in the same period theprevious year.Net profit for the report period amounted to EUR 2.0 million negative(EUR 2.7 million negative). Net profit was particularly affected bythe sharp increase in financing costs.Earnings per share amounted to EUR 0.16 negative (EUR 0.22 negative),while equity per share stood at EUR 0.92 (EUR 1.31).Quarterly comparison 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/(EUR thousands) 2009 2009 2008 2008 2008 2008Revenue 16,928 18,479 25,789 21,395 26,412 20,330Operating profit/loss -472 -518 -1,241 -442 -600 -1,329Net profit/loss -1,035 -949 -1,915 -800 -1,005 -1,681Earnings per share,EUR -0.08 -0.08 -0.16 -0.07 -0.08 -0.14Development of operationsThe demand for the Indian unit's services picked up, and thequotation base showed strong growth. The new production facilities,the modern capacity and extensive design services will improve theunit's competitiveness further.The value of inventories fell from EUR 16.2 million to EUR 14.1million at the end of June. The positive development reflected boththe decrease in telecommunications component stocks and higherefficiency in materials management.The production capacity and the cost structure were adapted to themarket situation. The electronics factories adopted reduced workinghours. The work situation at the mechanical factories was good duringthe report period, and the production of sheet-metal parts is concentrated in Vaasa, while the Helsinki factory is focusing onproduct assembly. Due to the decreased demand in certain mechanicsproducts, statutory cooperation negotiations concerning eventualtemporary lay-offs were launched in the Vaasa factory after the endof the report period in August.Incap is investigating possibilities to concentrate the company'selectronics production in Europe in the Kuressaare factory. For thispurpose, the company will during autumn explore if part of theproducts manufactured in the Vuokatti factory can be transferred toKuressaare and if part of the operations could be taken over by athird party.Financing and cash flowThe Group's equity ratio was 26.4% (31.2%). Interest-bearing netliabilities totalled EUR 18.6 million (EUR 19.2 million) and thegearing ratio was 164.9% (120.4%). Net financial expenses stood atEUR 0.99 million (EUR 0.76 million) and depreciation and amortisationexpense at EUR 1.4 million (EUR 1.5 million). Incap aims to improveliquidity primarily by enhancing working capital management. Tradereceivables continued to decline compared with the beginning of theyear, and no credit losses arose during the report period.The Group's equity at the close of the report period was EUR 11.3million (EUR 16.0 million). Debt totalled EUR 31.5 million (EUR 35.2million), of which interest-bearing debt amounted to EUR 19.3 million(EUR 19.7 million).The Group's quick ratio was 0.6 (0.7) and the current ratio 1.3(1.3). Cash flow from operations was EUR 1.0 million (EUR 0.9million), and the change in cash and cash equivalents was an increaseof EUR 73,000 (a decrease of EUR 0.4 million).Capital expendituresThe Group's capital expenditures amounted to EUR 0.7 million (EUR 1.3million). The majority of these were related to the operations of theIndian company.PersonnelIncap Group employed 757 people at the end of June (727 people at thebeginning of the year). The number of personnel in India increased by49 persons and was 243 at the end of the report period. At the end ofJune, 35 people were temporarily laid off.Shares and shareholdersIncap Corporation has one series of shares, and the number of sharesin 12,180,880. During the period under review, the share price variedbetween EUR 0.43 and EUR 0.99 and the last closing price of theperiod was EUR 0.66. During the report period, the trading volume was16.8% of outstanding shares.At the end of the report period, the company had 1,153 shareholders.Foreign or nominee-registered owners held 2.8% of all shares. Thecompany's market capitalisation on 30 June 2009 was EUR 8.0 million.The company does not own any of its own shares.Short-term risks and factors of uncertainty concerning operationsThe risks and factors of uncertainty relating to Incap's operationsare described in more detail in the report by the Board of Directorsdated 24 February 2009, and no significant changes have taken placewith regard to these factors during the report period.The most significant short-term risks are connected with the volumeof business, the profitability as well as the financing.Incap's sales are spread over several customer sectors, which hedgesthe company against sharp seasonal changes. However, marketvisibility is very limited.The company's financial position is influenced by the trends in thegeneral financial market and the company's future earningsdevelopment. Incap aims at ensuring the company's liquidity byefficient working capital management and investigate differentfinancing options in order to enhance the financial position.OutlookIncap's estimates of the future business development are based on itscustomers' forecasts and the company's own assessments. Customers'views of the future market development vary, and the forecasts arestill very cautious.In line with the earlier estimate, Incap expects that the Group'srevenue in 2009 will be lower than in 2008, when it totalled EUR 93.9million. Operating profit for the latter half of the year isestimated to be better than during the first half of the year.Full-year operating profit (EBIT) is estimated to be clearly bettercompared with 2008 (EUR 3.6 million negative).INCAP CORPORATIONBoard of DirectorsFor additional information, please contact:Sami Mykkänen, President and CEO, tel. +358 40 559 9047Eeva Vaajoensuu, Chief Financial Officer, tel. +358 40 763 6570Hannele Pöllä, Director of Communications and Human Resources, tel.+358 40 504 8296DISTRIBUTIONNASDAQ OMX Helsinki LtdPrincipal mediaThe company's website: www.incap.fiPRESS CONFERENCEIncap will arrange a conference for the press and financial analystson 5 August 2009 at 10:00 a.m. at the World Trade Center Helsinki, inMeeting Room 1 on the 2nd floor at Aleksanterinkatu 17, FI-00100Helsinki. The presentation material will be available on thecompany's website the same day.ANNEXES1 Consolidated Income Statement2 Consolidated Balance Sheet3 Consolidated Cash Flow Statement4 Consolidated Statement of Changes in Equity5 Group Key Figures and Contingent Liabilities6 Quarterly Key FiguresINCAP IN BRIEFIncap Corporation is an internationally operating contractmanufacturer whose comprehensive services cover the entire life-cycleof electromechanical products from design and manufacture tomaintenance services. Incap's customers are leading equipmentsuppliers in energy-efficiency and well-being technology, for whichthe company produces new competitiveness as a strategic partner.Incap has operations in Finland, Estonia and India. The Group'srevenue in 2008 amounted to around EUR 94 million, and the companycurrently employs approximately 760 people. Incap's shares are listedon the NASDAQ OMX Helsinki Oy. For additional information, pleasevisit our website, www.incap.fi.Annex 1CONSOLIDATED INCOME STATEMENT (IFRS)(EUR thousands, unaudited) 1-6/2009 1-6/2008 Change % 1-12/2008REVENUE 35,407 46,742 -,24 93,925Work performed by the enterpriseand capitalisedChange in inventories offinished goods andwork in progress -264 917 -129 791Other operating income 114 17 573 53Raw materials and consumablesused 23,204 33,638 -31 66,672Personnel expenses 7,433 9,275 -20 18,722Depreciation and amortisation 1,424 1,510 -6 2,823Other operating expenses 4,187 5,182 -19 10,165OPERATING PROFIT/LOSS -990 -1,929 -49 -3,612Financing income and expenses -992 -757 31 -1,810PROFIT/LOSS BEFORE TAX -1,982 -2,686 -26 -5,422Income tax expense -3 0 21PROFIT/LOSS FOR THE PERIOD -1,984 -2,686 -26 -5,401Earnings per share -0.16 -0.22 -27 -0.44Options have no dilutive effectin report periods 2008 and 2009OTHER COMPREHENSIVEINCOME 1-6/2009 1-6/2008 Change % 1-12/2008PROFIT/LOSS FOR THEPERIOD -1,984 -2,686 -43 -5,401OTHER COMPREHENSIVEINCOME:Translation differencesfrom foreignunits 42 -270 -116 -262Other comprehensiveincome, net 42 -270 -124 -262TOTAL COMPREHENSIVEINCOME -1,942 -2,956 -34 -5,663Attributable to:Shareholders of theparent company -1,942 -2,956 -34 -5,663Minority interest 0Annex 2CONSOLIDATED BALANCE SHEET (IFRS)(EUR thousands, unaudited) 31 30 June 30 June December 2009 2008 Change % 2008ASSETSNON-CURRENT ASSETSProperty, plant and equipment 10,565 12,198 -13 11,250Goodwill 973 1,061 -8 969Other intangible assets 1,170 1,361 -14 1,311Other financial assets 14 19 -24 16Deferred tax assets 4,152 4,151 0 4,148TOTAL NON-CURRENT ASSETS 16,874 18,790 -10 17,693CURRENT ASSETSInventories 14,099 15,174 -7 16,153Trade and other receivables 11,043 16,710 -34 14,444Cash and cash equivalents 707 475 49 641TOTAL CURRENT ASSETS 25,849 32,359 -20 31,239TOTAL ASSETS 42,723 51,149 -16 48,932EQUITY ATTRIBUTABLE TO EQUITYHOLDERS OF THE PARENTCOMPANYShare capital 20,487 20,487 0 20,487Share premium account 44 44 0 44Exchange differences -435 -486 -10 -478Retained earnings -8,838 -4,079 117 -6,864TOTAL EQUITY 11,257 15,966 -29 13,190NON-CURRENT LIABILITIESDeferred tax liabilities 99 121 -18 99Interest-bearing loans andborrowings 11,495 10,714 7 12,977NON-CURRENT LIABILITIES 11,595 10,835 7 13,077CURRENT LIABILITIESTrade and other payables 12,097 15,369 -21 15,731Current interest-bearing loans andborrowings 7,774 8,979 -13 6,935CURRENT LIABILITIES 19,871 24,348 -35 22,666TOTAL EQUITY AND LIABILITIES 42,723 51,149 -16 48,932Annex 3CONSOLIDATED CASH FLOW STATEMENT(EUR thousands, unaudited) 1-6/2009 1-6/2008 1-12/2008Cash flow from operating activitiesNet income -990 -1,929 -3,612Adjustments to operating profit 1,441 1,299 2,760Change in working capital 2,133 2,503 3,702Interest paid -1,580 -1,101 -1,640Interest received 21 106 143Cash flow from operating activities 1,024 878 1,353Cash flow from investing activitiesCapital expenditure on tangible andintangible assets -603 -1,160 -1,699Proceeds from sale of tangibleand intangible assets 158 118 160Loans granted -4 0 0Shares of subsidiaries sold 0 0 50Repayments of loan receivables 2 0 1Cash flow from investing activities -448 -1,042 -1,488Cash flow from financing activitiesDrawdown of loans 1,917 810 1,753Repayments of borrowings -1,847 -504 -838Repayments of obligations under financeleases -573 -523 -1,063Cash flow from financing activities -503 -217 -148Change in cash and cash equivalents 73 -381 -283Cash and cash equivalents at beginning ofperiod 641 944 944Effect of changes in exchange rates -8 -88 -20Cash and cash equivalents at end ofperiod 707 475 641Annex 4CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)(EUR thousands, unaudited) Retained Share Share premium Exchange capital account differences earnings TotalEquity on 1 January 2008 20,487 44 -216 -1,188 19,127Change in exchangedifferences -270 -270Options and share-basedcompensation -205 -205Net income and lossesrecogniseddirectly in equity -270 -205 -475Net profit/loss -2,686 -2,686Total income and losses -270 -2,891 -3,161Equity on 30 June 2008 20,487 44 -486 -4,079 15,966Equity on 1 January 2009 20,487 44 -478 -6,864 13,189Change in exchangedifferences 42 42Options and share-basedcompensation 10 10Net income and lossesrecogniseddirectly in equity 42 10 52Net profit/loss -1 984 -1 984Total income and losses 42 -1 975 -1 932Equity on 30 June 2009 20 487 44 -435 -8 838 11 257Annex 5GROUP KEY FIGURES AND CONTINGENT LIABILITIES (IFRS) 31 30 June 30 June December 2009 2008 2008Revenue, EUR millions 35.4 46.7 93.9Operating profit, EUR millions -1.0 -1.9 -3.6 % of revenue -2.8 -4.1 -3.9Profit before taxes, EUR millions -1.9 -2.7 -5.4 % of revenue -5.6 -5.7 -5.8Return on investment (ROI), % -3.6 -9.2 -8.6Return on equity (ROE), % -32.5 -30.6 -33.4Equity ratio, % 26.4 31.2 27.0Gearing, % 164.9 120.4 146.1Net debt, EUR millions 19.7 18.0 20.7Net interest-bearing debt, EURmillions 18.6 19.2 19.3Average number of shares during thereportperiod, adjusted for share issues 12,180,880 12,180,880 12,180,880Earnings per share (EPS), euro -0.16 -0.22 -0.44Equity per share, euro 0.92 1.31 1.08Investments, EUR millions 0.7 1.3 1.8 % of revenue 2.0 2.7 1.9Average number of employees 730 729 735CONTINGENT LIABILITIES, EUR millionsFOR OWN LIABILITIESMortgages 12.0 12.3 12.0Other liabilities 6.5 7.7 8.8Nominal value of currency optionsEUR thousands 0 0 0Fair values of currency options, EURthousands 0 0 0Annex 6QUARTERLY KEY FIGURES (IFRS) 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ 2009 2009 2008 2008 2008 2008Revenue, EUR millions 16.9 18.5 25.8 21.4 26.4 20.3Operating profit, EURmillions -0.5 -0.5 -1.2 -0.4 -0.6 -1.3 % of revenue -2.8 -2.8 -4.8 -2.1 -2.3 -6.5Profit before taxes, EURmillions -1.0 -0.9 -1.9 -0.8 -1.0 -1.7 % of revenue -6.1 -5.1 -7.5 -3.7 -3.8 -8.3Return on investment (ROI),% -2.1 -4.9 -11.1 -4.1 -4.9 -13.4Return on equity (ROE), % -33.9 -29.8 -47.4 -18.7 -22.9 -37.0Equity ratio, % 26.4 27.4 27.0 29.43 31.2 33.3Gearing, % 164.9 151.1 146.1 132.6 120.4 106.5Net debt, EUR millions 19.7 19.6 20.7 21.7 18.0 19.9Net interest-bearing debt,EUR millions 18.6 18.6 19.3 20.1 19.2 18.3Average number of shareissue-adjusted 12,180 12,180 12,180 12,180 12,180 12,180shares during report period ,880 ,880 ,880 880 ,880 ,880Earnings per share (EPS),euro -0.08 -0.08 -0.16 -0.07 -0.08 -0.14Equity per share, euro 0.92 1.01 1.08 1.24 1.31 1.41Investments, EUR millions 0.5 0.1 0.3 0.3 0.4 0.8 % of revenue 2.9 0.6 1.3 1.2 1.6 4.1Average number of employees 732 728 743 739 724 733http://hugin.info/120192/R/1332693/315670.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 05.08.2009 - 07:30 Uhr
Sprache: Deutsch
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