GPV maintains strong growth despite increasing challenges
Danish EMS provider GPV continues to deliver strong growth in 2022, reporting the best first quarter results ever.
During the company’s first quarter 2022, revenue reached one billion DKK for the first time, and the company says that the earnings are keeping up well despite rising costs of materials and freight.
GPV achieved revenue of DKK 1,009 million (EUR 135.6 million) compared to DKK 741 million (EUR 99.6 million) in the same quarter 2021. This is a significant increase of 36%, partly due to increased demand and partly to rising prices due to increased costs of materials and freight.
"GPV has had its best Q1 ever, and a lot of things are going our way. At the same time, we continue to be in a particularly complex situation where, on the one hand, we see increased demand, while on the other, we continue to see a challenging material supply situation that has been further disrupted indirectly by the war in Ukraine and directly by the coronavirus lockdowns in China. So far, we are very pleased with the record-high turnover and our strong order book, and of course we are monitoring the situation closely,” says GPV's CEO Bo Lybæk in the Q1 report.
The CEO continues to explains how the difficult situation has reduced earnings, which have not increased at the same rate as revenue. In terms of profit, the first quarter for 2022 ended better than expected with an EBITDA of DKK 91 million (EUR 12.2 million) compared to DKK 76 million (EUR 10.2 million) in the same period last year. Earnings were positively affected by increased sales to a wide range of customers, good cost control and high-capacity utilisation at the company's production units.
One of GPV’s largest production units is located in Sri Lanka, which is currently battling the worst economic crisis since the country gained independence in 1948. Drastically high inflation, combined with the coronavirus pandemic, and a poor harvest last year has led to a difficult situation for the country.
"We have launched a number of measures to help our employees in Sri Lanka. Among other things, we have established a system of monthly food packages to support the individual employees and their basic family well-being," the CEO explains.
GPV cut the first sod for its new factory in Sri Lanka in October 2021 with an increase in production capacity of 40%. The company says that the work is proceeding according to plan, and at the same time, GPV has started the construction of a new mechanics factory in Thailand with an expansion of the electronics facilities to follow. The new factories are expected to start operations in the first quarter of 2023. GPV has also invested in new production capacity and optimised its production units in Thailand, Switzerland, and Slovakia.
Despite the volatility experienced throughout the industry, GPV is raising its full-year guidance. The revenue forecast is raised to the level of DKK 3.5 – 3.7 billion (EUR 470 - 497 million).