Incap Corporation
Business Review Q1/2019                       8 May 2019 at 8.30 a.m. (EEST)                              

Incap Group´s business review for January-March 2019: Growth continued, profitability improved 

Key figures in January-March 2019 (unaudited)

  • The Group’s revenue amounted to EUR 18.5 million, up 48% from the corresponding period of previous year (Jan-Mar 2018: EUR 12.5 million).
  • The Group’s operating profit (EBIT) amounted to EUR 2.8 million, up 146% from the corresponding period (1-3/2018: EUR 1.1 million).
  • Net profit for the period amounted to EUR 2.2 million, up 207% from the corresponding period (1-3/2018: EUR 0.7 million).
  • Outlook for the full year of 2019: The revenue and operating profit (EBIT) for 2019 will be higher than the revenue and EBIT for 2018, provided that there are no major changes in currency exchange rates or in component availability.
Key figures 1-3/2019 1-3/2018 Change 1-12/2018
EUR million
18.5 12.5 48.2% 59.0
Operating profit/loss (EBIT),
EUR million
2.8 1.1 145.6% 8.5
% of revenue
15.3% 9.2%   14.5%
Profit for the period,
EUR million
2.2 0.7 207.0% 3.2

Incap Group’s business continued to grow strongly both in Estonia and in India. The factory expansion with the new production line in India and the development actions implemented in Estonia last year resulted in increased efficiency as anticipated. The January-March revenue amounted to EUR 18.5 million, an increase of 48.2% from the comparison period in 2018. The revenue increased mainly thanks to projects from new customers. The demand from the existing customers also continued strong.

January-March operating profit (EBIT) amounted to EUR 2.2 million, showing a growth of 145.6% from the comparison period a year ago. The share of operating profit out of revenue increased from 9.2% to 15.3%.

The company’s financing position continued to be solid. Equity ratio on 31 March 2019 was 52.6% (43.9%). 

Impacts of the adoption of IFRS 16

The Group adopted IFRS 16 on 1 January 2019 using the modified retrospective method where comparative information will not be restated.

The adoption of IFRS 16 has no material impact on group´s EBIT even though the interest component on the lease payments is recognized in financial income and expenses. The impact of IFRS 16 adoption on total equity is not material. 

Cash flow from operating activities will increase as the principal component of lease payments is now recorded within cash flows from financing activities. The amendment increases the volumes of rental contracts and liabilities recorded in the consolidated balance sheet by EUR 0.8 million.

Incap will not adapt IFRS 16 to leasing agreements with rental period 12 months or less or when the contracts notice period is less than 12 months without sanctions with exception of the Estonian unit´s production and office premises in Kuressaare. Most of Incap’s leasing commitments are short term or low value agreements, which are handled as operating lease contracts. Incap has at the moment no activities as a lessor. 

Outlook for 2019

Incap’s estimates on its future business development are based both on its customers’ forecasts and on the company’s own assessments.

The company repeats its previous estimation that was given 18 April 2019, that in 2019 the revenue and operating profit (EBIT) will be higher than the revenue and EBIT for 2018, provided that there are no major changes in currency exchange rates or in component availability.

Otto Pukk, President and CEO of Incap Group:

“This first quarter of the year 2019 was exceptionally good for Incap. We were pleased to have several new orders from new customers. Yet, at the same time the demand from the existing customers continued strong.

I am also delighted of our team´s performance that made it possible to increase the volumes significantly with only moderate increase in overhead costs. This clearly proofs the flexibility of our operational model.

Our revenue increased from EUR 12.5 to 18.5 million, and the operating profit increased from EUR 1.1 million to EUR 2.8 million. The growth rate (146%) of the EBIT can mainly be explained by several projects completed during the reporting period. However, I would like to emphasize that this quarter EBIT was extraordinary good because of the timings of completed projects. 

Prospects for contract manufacturing services currently look bright as the use of electronics in various application areas is expanding worldwide, but as an Electronic Manufacturing Service provider we need to be ready to adjust quickly to the possible market changes. The problems in component availability have continued and we will continue to cooperate closely with our suppliers to secure on-time deliveries to our customers. “

Financial reporting of Incap in 2019

Incap will publish the half-year report for January-June on Wednesday 14 August and the business review for January-September on Wednesday 6 November.

Board of Directors

For additional information, please contact:
Otto Pukk, President and CEO, tel. +372 508 0798

Nasdaq Helsinki Ltd.
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Incap Corporation is an international 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 China, and the company currently employs approximately 820 people. Incap's share is listed on the Nasdaq Helsinki Ltd. as from 1997. Additional information: