Scanfil starts 2020 with a strong first quarter

Two thirds of the increase in turnover came from the acquisition of HASEC during the previous year, while one third comprised organic growth, the company states in its fiscal quarter report. Turnover for the quarter was EUR 144.1 million, somewhat lower than the company expected due to the longer-than-planned closure of Chinese facilities in February due to the COVID-19 epidemic. However, turnover of the Communication segment increased compared to first quarter of the previous year by EUR 4.4 million (24.7%). The biggest single growth driver was the demand for 5G network elements. Scanfil’s operating profit for the first quarter of 2020 was EUR 8.6 million, 6.0% of turnover, compared to EUR 6.8 million for the same period last year, which then represented 5.3% of turnover. Operating profit increased 26.1% compared the corresponding period of the previous year. The increase in the operating profit resulted from the increase in turnover and improved operational efficiency. The net profit for the review period was EUR 7.5 million, compared with EUR 4.8 million during 1Q19. “The development of sales was particularly strong in March, compensating for the slower February. Longer than expected, shutdowns of plants in China due to the coronavirus situation had a negative impact on realized sales in February. The delivery capacity of the supply chain did not set any major restrictions on our deliveries during the quarter,” says CEO, Petteri Jokitalo, in the report. The CEO also expresses his clear intention to continue with its planned investments during the year. “We have been determined to continue our investment program as planned. In 2020 we have invested, for example, in an electronics assembly line at the Sieradz plant and an automated storage system at the Åtvidaberg plant,” Jokitalo continues. However, as a result of the coronavirus pandemic, Scanfil's visibility for the rest of the year has decreased, and uncertainties have increased. Jokitalo explains that the risk is related to customer demand and the delivery capacity of the supply chain, as well as the safety and capability of its plants and employees. “We have already seen some of these risks materializing, and this trend will likely continue during the next months,” the CEO says. “The health and safety of our employees is always priority number one. We always comply with the instructions of local health authorities, and we also share the best practices between our plants to minimize coronavirus risks. If necessary, we are also ready to take rapid and drastic measures to protect our employees,” Jokitalo concludes.