© Electronics Production | April 10, 2013

Incap fighting for survival

EMS-provider Incap is lowering its expectations for 2013 – but the company is continuing to work on improving profitability and implementing measures.
Incap Corporation estimates that the Group's revenue in 2013 will be lower than in 2012, when it amounted to EUR 64.1 million. The company retains its previous estimate for profitability and estimates that the full-year operating result (EBIT) will be clearly positive. The operating result in 2012 was negative EUR -0.7 million.

The decrease in revenue is caused by the fact that the purchase of a part of the materials needed in production has temporarily been transferred over to some customers. This way the deliveries to customers are secured, while the company's challenging financial situation has weakened the availability of materials. The transfer of responsibility for material purchase is a temporary action.

Action plan for improved profitability

The actions taken during 2011 have resulted in a profitability improvement of approximately EUR 1 million in 2012. By enhanced material sourcing, closing down the Helsinki factory and centralising corporate functions to Estonia the company estimates to gain further savings of approximately EUR 2.3 million in 2013.

Furthermore, the company launched an action plan in the beginning of 2013, which aim to improve the operating result (EBIT) of the year 2013 by a total of approximately EUR 1.8 million.

The respective actions are focused on the operations in Finland and in Estonia. There have been substantial actions for increased operational efficiency in the subsidiary in India already during 2012, which have for their part contributed to the positive development of the performance of the subsidiary.

In order to decrease the overhead expenses the organisation structure of the Group will be streamlined. The corporate functions in Finland have been decreased to a half compared with the previous situation. Some tasks will be transferred from Finland to Estonia and India, and functions are centralised to the factories.

The production will be made more efficient and adjusted both in Estonia and in Finland. The number of personnel in production has been reduced.


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