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31
July
2012

Incap: 1H revenue on previous year's level

Incap reports revenue for the period January-June was EUR 33.9 million, up 1% on the same period the previous year (Jan-Jun 2011: EUR 33.7 million)
Sami Mykkänen, President and CEO of Incap Group:

"We have made progress in implementing the company's strategic changes. The transfer of the Helsinki plant's production to the company's other plants, which was decided in the beginning of the year, has proceeded as scheduled and will have a positive impact on the Group's profitability already during the latter half of the year."

"The demand for energy efficiency sector's products continues to stay on a pleasing level. Thanks to this, the capacity usage of our Vaasa factory is good and in addition to in-house personnel, we employ there approximately 20 persons via a staffing agency. Also the growth of the Indian operations has been rapid this year and the profitability has improved remarkably."

"The comprehensive financing solution which was negotiated during spring stabilises our financing structure, and we can thus be very satisfied with the final result of the negotiations. In order to redeem the convertible bond, we will implement a share issue towards the end of the year, and I am confident that the issue will be a success."


Revenue and profitability April-June 2012

Revenue for the second quarter amounted to EUR 18.4 million, up approximately 18% on the first quarter and up 4% year-on-year. The growth was mainly due to brisk demand for electric power products, which is expected to continue at a good level during the latter half of the year as well.

The operating result (EBIT) for April-June was approximately EUR 13 thousand positive. The sales margin improved clearly year-on-year as the result of increases in customer prices and a proportional decrease in material expenses and other variable costs. Net profit for the second quarter was positive, approximately EUR 0.4 million.

Revenue and profitability January-June 2012

Revenue for the first half of 2012 amounted to EUR 33.9 million, up approximately 1 % year-on-year. Revenue increased at a steady rate in all months of the period, although the trend varied greatly between different customers. Deliveries to customers in the energy efficiency sector remained at a good level, and especially the demand for products manufactured at the Indian plant clearly picked up.

The operating result for January-June was EUR -0.3 million, which is slightly over EUR 0.7 million better than the corresponding period for the previous year. Long-term measures aiming to improve profitability began to show in the result. Financial performance was particularly burdened by expenses related to the closure of the Helsinki plant.

Personnel and management

At the close of the period, Incap Group had a payroll of 714 employees (759), while at the beginning of the year the company had 735 employees. Proportionally, the number of employees decreased the most in Group Services, which underwent restructuring through the transfer of operations to Estonia. Of the personnel, 50% worked in India, 30% in Estonia and 20% in Finland.

Outlook for 2012

Incap's estimates for future business development are based on its customers' forecasts and the company's own assessments. The demand for energy efficiency sector products, which are manufactured in Vaasa and India, is expected to remain good and even pick up towards the end of the year. Revenue from well-being technology products is expected to fall short of the previous year because not all of the products formerly manufactured at the Helsinki plant will be transferred to the company's other plants to the expected extent.

The closure of the Helsinki plant is the final stage in the company's strategic restructuring of production, which has formed a basis for profitable growth. Transferring the plant's production to other units and making operations more efficient will improve the company's profitability during the latter half of 2012.

Incap reiterates its previous forecast published on 19 June 2012 in terms of revenue and estimates that the Group's revenue in 2012 will be lower than the EUR 68.9 million achieved in 2011.

Incap amends its previous guidance concerning EBIT and estimates that the operating profit (EBIT) for the latter half of the year will be positive and full-year operating profit will be clearly better than in 2011, at which time it amounted to EUR -1.6 million. Previously, on 19 June 2012, Incap estimated that its full-year operating result would be positive and clearly higher than in 2011.
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