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  • 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 with international financial reporting standards (IFRS). Unless otherwise stated, the comparison figures refer to the same period the previous year.
Sami Mykkänen, the President and CEO of Incap Group: "The decrease in revenue was due to a planned and controlled winding down of the high-volume manufacturing of telecommunications products. Other customer industries have developed positively, without any surprises. We continued with our reorganisation and restructuring programme and managed to cut costs and develop our business operations as planned compared with the first half of last year. The increase in financing costs continued to burden net profit. 
The restructuring has proceeded as planned and we have made advances in new customer acquisition. New inquiries are at an active phase in India, in particular, where the quotation base and demand for design services by global customers have grown sharply. The introduction of modern production premises has further enhanced the opportunities for business growth in India.
Improving profitability is still our key challenge, so we will continue to adjust the production capacity, improve the efficiency of materials management and cut fixed costs. At the same time we continue with strong development of our business operations in selected focus areas."
Revenue and earnings in April-June 2009
Revenue during the second quarter totalled EUR 16.9 million (4-6/2008: EUR 26.4 million), or 36% less than in the same period in 2008. Decrease in revenue was due to the expected discontinuation of volume production in telecommunications. Revenue developed positively especially in well-being technology products, whose sales increased in the second quarter compared with both the first quarter and the corresponding period the previous year.
Operating profit for April-June was EUR 0.5 million negative (EUR 0.6 million negative), representing 2.8% negative (2.3% negative) of revenue. Net profit for the second quarter amounted to EUR 1.0 million negative (1.0 million negative). In particular, net profit was reduced by the increase in financing expenses by about 40% compared with the same period the previous year.  Earnings per share were EUR 0.08 negative (EUR 0.08 negative).
Revenue and earnings in January-June 2009
Revenue for January-June totalled EUR 35.4 million (1-6/2008: EUR 46.7 million), or 24% less than in the same period in 2008.The main reason behind the decline in revenue was the planned decrease in revenue from the high-volume manufacturing of telecommunications products by about EUR 9 million on the same period the previous year. Revenue developed steadily in the strategic focus areas in energy efficiency and well-being technology. Of the revenue for the first half of the year, EUR 1.6 million represented the sale of materials of products to be discontinued to customers.
Operating loss reduced by almost one half with operating profit amounting to EUR 1.0 million negative (EUR 1.9 million negative), representing 2.8% negative (4.1% negative) of revenue. The efficiency measures in line with the reorganisation programme reduced costs, fixed costs being EUR 1.6 million lower than in the same period the previous year.
Net profit for the report period amounted to EUR 2.0 million negative (EUR 2.7 million negative). Net profit was particularly affected by the 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).
Development of operations
The demand for the Indian unit's services picked up, and the quotation base showed strong growth. The new production facilities, the modern capacity and extensive design services will improve the unit's competitiveness further.
The value of inventories fell from EUR 16.2 million to EUR 14.1 million at the end of June. The positive development reflected both the decrease in telecommunications component stocks and higher efficiency in materials management.
The production capacity and the cost structure were adapted to the market situation. The electronics factories adopted reduced working hours. The work situation at the mechanical factories was good during the report period, and the production of sheet-metal parts is  concentrated in Vaasa, while the Helsinki factory is focusing on product assembly. Due to the decreased demand in certain mechanics products, statutory cooperation negotiations concerning eventual temporary lay-offs were launched in the Vaasa factory after the end of the report period in August.
Incap is investigating possibilities to concentrate the company's electronics production in Europe in the Kuressaare factory. For this purpose, the company will during autumn explore if part of the products manufactured in the Vuokatti factory can be transferred to Kuressaare and if part of the operations could be taken over by a third party.
Financing and cash flow
The Group's equity ratio was 26.4% (31.2%). Interest-bearing net liabilities totalled EUR 18.6 million (EUR 19.2 million) and the gearing ratio was 164.9% (120.4%). Net financial expenses stood at EUR 0.99 million (EUR 0.76 million) and depreciation and amortisation expense at EUR 1.4 million (EUR 1.5 million). Incap aims to improve liquidity primarily by enhancing working capital management. Trade receivables continued to decline compared with the beginning of the year, and no credit losses arose during the report period.
The Group's equity at the close of the report period was EUR 11.3 million (EUR 16.0 million). Debt totalled EUR 31.5 million (EUR 35.2 million), 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 0.9 million), and the change in cash and cash equivalents was an increase of EUR 73,000 (a decrease of EUR 0.4 million).
Capital expenditures
The Group's capital expenditures amounted to EUR 0.7 million (EUR 1.3 million). The majority of these were related to the operations of the Indian company.
Incap Group employed 757 people at the end of June (727 people at the beginning of the year). The number of personnel in India increased by 49 persons and was 243 at the end of the report period. At the end of June, 35 people were temporarily laid off.
Shares and shareholders
Incap Corporation has one series of shares, and the number of shares in 12,180,880. During the period under review, the share price varied between EUR 0.43 and EUR 0.99 and the last closing price of the period was EUR 0.66. During the report period, the trading volume was 16.8% 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. The company'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 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 24 February 2009, and no significant changes have taken place with regard to these factors during the report period.
The most significant short-term risks are connected with the volume of business, the profitability as well as the financing.
Incap's sales are spread over several customer sectors, which hedges the company against sharp seasonal changes. However, market visibility is very limited.
The company's financial position is influenced by the trends in the general financial market and the company's future earnings development. Incap aims at ensuring the company's liquidity by efficient working capital management and investigate different financing options in order to enhance the financial position.
Incap's estimates of the future business development are based on its customers' forecasts and the company's own assessments. Customers' views of the future market development vary, and the forecasts are still very cautious. 
In line with the earlier estimate, Incap expects that the Group's revenue in 2009 will be lower than in 2008, when it totalled EUR 93.9 million. Operating profit for the latter half of the year is estimated to be better than during the first half of the year. Full-year operating profit (EBIT) is estimated to be clearly better compared with 2008 (EUR 3.6 million negative).
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 of Communications and Human Resources, tel. +358 40 504 8296
NASDAQ OMX Helsinki Ltd
Principal media
The company's website: 
Incap will arrange a conference for the press and financial analysts on 5 August 2009 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. The presentation material will be available on the company's website the same day.
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 contract manufacturer whose comprehensive services cover the entire life-cycle of electromechanical products from design and manufacture to maintenance services. Incap's customers are leading equipment suppliers in energy-efficiency and well-being technology, for which the company produces new competitiveness as a strategic partner. Incap has operations in Finland, Estonia and India. The Group's revenue in 2008 amounted to around EUR 94 million, and the company currently employs approximately 760 people. Incap's shares are listed on the NASDAQ OMX Helsinki Oy. For additional information, please visit our website,

Annex 1

Annex 2
Annex 3
Annex 4
Annex 5
Annex 6
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