© Incap Electronics Production | November 27, 2020
Incap bounces back from tough second quarter
Following a tough second quarter which was affected by the negative consequences of the COVID-19 pandemic, Incap’s business recovered during the third quarter.
The EMS provider recorded third quarter revenues of EUR 28.1 million, an increase of 59.9% compared to the same quarter last year. While Q320 revenue contains the business performance of AWS Electronics Group acquired in January 2020, excluding these, revenue still increased organically by 10.7% Adjusted EBIT for the period was EUR 3.6 million, compared with EUR 2.4 million during the same period last year. Operating profit (EBIT) for the third quarter 2020 was EUR 3.3 million, up from EUR 2.2 million during 3Q19, an increase of 46.0%.. Net profit for the period was EUR 2.4 million, an increase of 33.7% from last years EUR 1.8 million. Earlier in November 2020 Incap revised its outlook for the full fiscal year. The company then said that it expected revenue for 2020 will be significantly higher than that of 2019 and the operating profit (EBIT) during the year would be higher than in 2019. The Group now specifies that the estimated revenue in 2020 will be approximately EUR 105–107 million and the operating profit (EBIT) between EUR 10.5–11.5 million. “Our revenue grew organically over 10 percent, as we cleared our backlog in our Indian factory while at the same time the demand from existing customers increased more than previously estimated. COVID-19 pandemic delayed our growth plans for 2020, but we are happy that we are now back on track and were able to announce an improved outlook for our operating profit, which we estimate will be higher than in 2019,” says CEO Otto Pukk in the third quarter report. As a consequence of the good demand from existing and new customers, Incap announced back in August that the company will further expand its factory in India. “We expect the original factory expansion to be finalised early 2021 and the further expansion is expected to be completed by the end of 2021,” the CEO says. He points out that the EMS sector remains highly fragmented and that Incap see no shortage of opportunity for growth through consolidation. “We want to be an active player in the sector, and to prepare ourselves for consolidation, we successfully completed our rights issue of 10,9 million euros in November. With the rights issue we will be able to strengthen our capital structure, balance sheet and financial position and thus create conditions for the implementation of our growth strategy.” The integration of AWS Electronics Group in the UK, which was acquired in January, is progressing according to plan despite the difficulties that pandemic has brought with it. As 2020 is coming to a close and 2021 and the UK’s exit from the EU is just around the corner, Incap is preparing for a transformation period and securing availability of certain critical components by increasing stock levels for these parts.