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  • Revenue in January-June was EUR 46.7 million, up 29% on the same period the previous year (Jan-Jun 2007: EUR 36.1 million)
  • Operating profit (EBIT) was EUR 1.9 million negative (EUR 1.1 million negative), or 4.1% negative of revenue (3.2% negative).
  • Net profit for the report period amounted to EUR 2.7 million negative (1.5 million negative).
  • Earnings per share (EPS) were EUR 0.22 negative (0.12 negative)
  • Profitability was burdened by increased production costs, non-recurring items for organisational development and delayed revenue growth in India
This unaudited interim financial report has been prepared in compliance with the recognition and measurement principles of the IFRS standards. The tables in the report have been prepared in compliance with the requirements of the IAS 34 standard approved by the EU. The accounting principles and methods of the interim report are the same as in the last annual financial statements. Unless mentioned otherwise, the comparison figures used in the text portion of the report are the figures for the comparable period during the previous year. The figures for 2007 include the Indian operations as of 1 June 2007.
Revenue and earnings in April-June 2008
Revenue during the second quarter was EUR 26.4 million (4-6/2007: EUR 19.1 million) or 38% higher than during the comparable period in 2007. Compared to the first quarter in 2008, growth amounted to 30%.
The operating profit was EUR 0.6 million negative (EUR 0.04 million) and as a percentage of revenue it was 2.3% negative (0.2%). Compared to the first quarter in 2008, the operating profit improved by 55%.
Revenue and earnings in January-June 2008
Revenue for the first half of the year was EUR 46.7 million (Jan-Jun 2007: EUR 36.1 million) or 29% higher than during the comparable period in 2007. In addition to an upswing in the demand for some established products, revenue was increased by several new products entering actual serial production. The figures for the comparable period include the operations in India as from 1 June 2007.
Operating profit, EUR 1.9 million negative, was weaker than during the comparable period in 2007 (EUR 1.1 million negative) and as a percentage of revenue it was 4.1% negative (3.2% negative). Sales margin was lower than expected, because the production was focused on material-intensive products and several new products were launched simultaneously to volume production. The revenue development in India was slower than expected and therefore, the fixed costs were high compared to revenue and the operations were not yet profitable. The increase in material prices could not yet be transferred to customer prices. Approximately EUR 1.9 million of revenue came from the low-margin sale of materials.
The operating profit includes approx. EUR 0.5 million of non-recurring costs connected with the development of the organisation and Group structure. During the comparable period the non-recurring costs amounted to EUR 0.6 million.
Net profit for the report period amounted to EUR 2.7 million negative (EUR 1.5 million negative). Net profit was particularly affected by an increase in financing expenses. Earnings per share amounted to EUR 0.22 negative (EUR 0.12 negative), while equity per share stood at EUR 1.31 (EUR 1.55).
Development of operations
Several new delivery agreements were signed during the report period. An agreement signed with ABB further increased Incap's share in the manufacturing of magnetic poles for electric motors. Collaboration with Finland's Slot Machine Association (RAY) and Rapiscan Systems deepened to increasingly extensive product entities. During the report period, negotiations on new collaboration in the manufacturing of sub-assemblies for wind generators, among others, were initiated.
Collaboration with six new customers was launched in India. Integrated product entities for the energy technology and industrial electronics industries comprise the majority of the factory's production. Construction of the new premises proceeded as planned. The country organisation in India was reinforced in terms of design services, sales and materials management.
Materials operations were made more efficient by renewing the organisation and transferring the focus of procurement to India and China. Sourcing cooperation with a partner operating in China got off to a promising start, and direct material deliveries to India and Europe were carried out on schedule.
Financing and cash flow
The Group's equity ratio was 31.2% (35.2%). Interest-bearing net liabilities totalled EUR 19.2 million (EUR 18.8 million) and the gearing ratio was 120.4% (99.5%). Net financial expenses were EUR 0.8 million (EUR 0.4 million) and depreciation expenses were EUR 1.5 million (EUR 1.3 million).
The Group's equity at the close of the period under review was EUR 16.0 million (EUR 18.9 million). Debt totalled EUR 35.2 million (EUR 34.8 million), of which interest-bearing debt amounted to EUR 19.7 million (EUR 20.9 million).
The Group's quick ratio was 0.7 (0.9) and the current ratio 1.3 (1.8). Cash flow from operations was EUR 0.9 million positive (EUR 1.6 million negative) and the change in cash and cash equivalents was a decrease of EUR 0.4 million (an increase of EUR 1.7 million).
Capital expenditures
The Group's capital expenditures were EUR 1.3 million (EUR 0.6 million) or 2.7% (1.6%) of revenue.
At the end of the report period, Incap Group had 731 employees (773) in addition to which a total of 102 leased employees worked at the company. The number of employees decreased the most in Estonia. In European operations, the number of clerical workers decreased by 13 compared to the beginning of the year. At the end of the report period, 52% of personnel worked in Finland, 27% in Estonia and 21% in India.
The co-determination negotiations concerning Incap's material and purchasing operations as well as the corporate support functions in Finland concluded in April. As a result, five people were made redundant.
Sami Mykkänen was appointed President and CEO for Incap Corporation on temporary basis as from 1 June to 31 December 2008. He joined Incap in 2007 and has previously been responsible for the manufacturing services and strategic sourcing of Incap as Vice President and member of the management team. Before Incap he acted as manufacturing Director at Powerwave Shanghai and before that among others as production and purchasing director at REMEC and ADC.
Juhani Hanninen, President and CEO since 2003, assumed responsibility for the development of Incap's marketing and sales. He will also advance further internationalisation of the Group in the boards of Incap's foreign subsidiaries.
Eeva Vaajoensuu was appointed as Chief Financial Officer of Incap Group and as a member of the management team on 14 April. Her area of responsibility includes the Group's administration, financing and IT management.
Authorisations of the Board of Directors
The Annual General Meeting of 10 April 2008 authorised the Board of Directors to decide, within one year of the Annual General Meeting, on increasing the share capital through one or more rights issues and on granting stock options so that the total number of new shares to be subscribed for on the basis of the authorisation is a maximum of 4,000,000 shares, from which a maximum of 600,000 shares can be used in stock options. At the end of the report period, the Board of Directors had not exercised the authorisation.
Shares and shareholders
Incap Corporation has one series of shares and the number of shares is 12,180,880. During the report period, the share price varied between EUR 1.04 and EUR 1.60 and the closing price of the period was EUR 1.04 (EUR 2.20). During the report period, the trading volume was 8% of outstanding shares (28%).
At the end of the report period, the company had 1,074 shareholders (1,122). Foreign or nominee-registered owners held 4% (17%) of all shares. The company's market capitalisation on 30 June 2008 was EUR 12.8 million (EUR 26.8 million). The company does not own any of its own shares.
Short-term risks and factors of uncertainty concerning operations
The risks and factors of uncertainty relating to Incap's operations are described in more detail in the report by the Board of Directors dated 3 March 2008, and no significant changes have taken place with regard to these factors during the report period.
The most significant short-term uncertainties are connected with the volume of business, the management of the costs of materials and the financing arrangements of the Indian operations. Deliveries to customers operating in the telecommunications sector will decrease during 2008 in accordance with expectations.
Events after the report period
Incap sold the entire share capital of its subsidiary Ultraprint Oy on 16 July 2008 to the operative management of the subsidiary. The business operations were passed over to the new owners the same day. The sale does not have any remarkable effect on Incap's result, and the resulting expenses have been recognised for the second quarter.  The company's revenue in 2007 amounted to about EUR 1.2 million and it had 12 employees.
Outlook for the rest of 2008 
Due to the uncertainty of general economic trends and the rapid fluctuation of demand typical of the industry segment, market visibility is very limited. Incap's estimates of future business development are mainly based on its customers' estimates of the trend in their own demand.
Incap's revenue estimate for the year as a whole remains unchanged.  Incap estimates that the Group's revenue in 2008 will increase from last year's EUR 83.0 million. Profitability is expected to improve during the second half of the year compared to the first half of the year, but the operating profit from operations in 2008 is expected to be on the same level than in 2007.
In the earlier statement on 7 May 2008 Incap estimated that the operating profit from operations would be better than in 2007, when it was EUR 2.8 million negative.
Incap will release its January-September Interim Report on Wednesday, 5 November 2008.
Helsinki, 6 August 2008
Board of Directors
For additional information, please contact:
Sami Mykkänen, President and CEO, tel. +358 40 559 9047
Eeva Vaajoensuu, Chief Financial Officer, tel. +358 40 763 6570
Hannele Pöllä, Director, Communications and Investor Relations, tel. +358 40 504 8296
OMX Nordic Exchange Helsinki
Principal media
The company's website  
Incap will arrange a conference for the press and financial analysts today at 10.00 a.m. at the World Trade Center Helsinki, in Meeting Room 1 on the 2nd floor at Aleksanterinkatu 17, FI-00100 Helsinki.
1 Consolidated Income Statement
2 Consolidated Balance Sheet
3 Consolidated Cash Flow Statement
4 Consolidated Statement of Changes in Equity
5 Group Key Figures and Contingent Liabilities
6 Quarterly Key Figures
Incap Corporation is an internationally operating electronics contract manufacturer whose comprehensive service covers the entire product lifecycle from design and manufacture to maintenance services. In addition to electronics, Incap also manufactures mechanical products and parts. The company specialises in technically demanding products and entities that are manufactured in small and medium-sized production series. Incap's customers are leading equipment suppliers in telecommunications, energy, industrial electronics, security as well as in medical and well-being sectors. Incap has operations in Finland, Estonia and India. The Group's revenue in 2007 amounted to EUR 83 million and the company currently employs approx. 730 persons. Incap's share is listed on the OMX Nordic Exchange Helsinki. For additional information, please visit

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Annex 2
Annex 4
Annex 5
Annex 6
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