Electronics Production | August 04, 2011

Scanfil EMS increase turnover to 120.8 million in 1H/2011

The turnover of contract manufacturing operations of Sievi Capital - operating under the name Scanfil EMS - increased compared to the corresponding period of the previous year, amounting to EUR 120.8 (94.7) million in January– June.
Operating profit also increased considerably during the period under review, amounting to EUR 7.7 (4.7) million, representing 6.4% (5.0%) of turnover. The result amounted to EUR 5.6 (2.8) million, or 4.7% (2.9%) of turnover. Measures to develop the operating processes and the increase in turnover have contributed to the favorable development of the profitability of the Scanfil EMS subgroup.

Return on investment was 14.9% (10.9%), equity ratio was 43.3% (42.2%) and gearing 31.9% (1.7%). Return on investment has improved as the result of favourable profit development. The change in gearing is the result of the EUR 40 million credit raised towards the end of 2010.

Turnover amounted to EUR 62.0 (53.9) million in April-June. Operating profit for the second quarter was EUR 4.2 (3.5) million, or 6.7% (6.5%) of turnover. Profit for the quarter was EUR 3.0 (2.1) million.

The positive development of demand in the contract manufacturing market continued during the period under review. The growth in turnover compared to the corresponding period the previous year amounted to 27.6%. In particular, demand among professional electronics customers remained at a high level, with the increase in sales amounting to almost 45% compared to the corresponding period the previous year. Professional electronics customers accounted for 58% of total sales in the first half of the year (51% during the corresponding period in 2010) and telecommunications customers for 42% (49%).

Scanfil EMS Oy aims to increase its customer portfolio in a controlled way in order to decrease the company's dependence on a single industry or individual customer. Professional electronics customers already come from several industries, and the company is actively increasing its customer base further, such as in the rapidly growing energy technology industry.

The company's measures to prepare for a lack of electronics components due to the natural disaster in Japan were successful. Component availability did not have much impact on production or deliveries during the period under review.

Scanfil EMS Oy underwent employer-employee negotiations during the period under review, and based on the results of the negotiations, the Board of Directors of Scanfil EMS Oy decided to close down the Vantaa plant, reorganise the operations of the Sievi plant and to adjust the group administration functions according to the new situation.

The reason for closing down the Vantaa plant is that a significant part of the demand for the products manufactured at the plant is centralised in lower cost countries. The majority of the plant's production will be moved to the group's plants in China, and part of the production will be transferred to the Sievi plant.

The Sievi plant's electronics production will transfer to the Suzhou plant in China and the Pärnu plant in Estonia. The Sievi plant will focus on sheet metal mechanics production and assembly of demanding products.

The operations of the Suzhou subsidiary in China on the new premises have commenced as planned. The new premises have proven to be very functional from the point of view of the plant's production, and the production capacity is in efficient use. The company has ensured uninterrupted production and secured electricity supply by obtaining a sufficient capacity of emergency power generators.

The product development and marketing efforts of Scanfil EMS Oy's subsidiary Greenpoint Oy concerning impulse sales concepts for fast moving consumer goods began to yield results towards the end of the period under review. Orders for the new products were received in June, and deliveries will commence during the third quarter.
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