Electronics Production | October 25, 2007
Scanfil shows a 10% decrease in turnover
The Group's turnover in January – September was EUR 170.2 (190.0) million, showing a decrease of 10% over the previous year. Distribution of turnover based on the location of customers was as follows: Finland 42 (43)%, rest of Europe 26 (28)%, Asia 30 (26)%, USA 1 (1)% and the others 1 (2)%.
The Chinese plants' sales accounted for 41% of the Group's total sales in the review period, including the deliveries to the Group's other plants (32% in the corresponding period last year). A little over half of all staff work in the Chinese subsidiaries, and on 30 September 2007, the proportion of the Group's employees working in foreign subsidiaries was 74%. The reorganisation of Scanfil's Finnish production activities was completed during the review period. Production was terminated in both Äänekoski and Oulu at the end of the third quarter. The plants' production was transferred to the Group's other units in a controlled way, and the measures did not lead to significant additional expenses. The Äänekoski plant property was sold after the review period in October. Measures have been initiated to sell the Oulu plant property. During the review period, Scanfil announced that it is investigating the possibility to sell the plant properties in Vantaa, Estonia and Hungary. If these properties were sold, the plants would continue their current operations as tenants, and the sale of the properties would not have effects on their operations. Scanfil set as its goal for 2007 to maintain its profitability and improve its efficiency. In a situation where price competition is fierce, the company has focused on maintaining its profitability by paying particular attention to product-level profitability, and has managed to retain it at a satisfactory level. Operating profit amounted to EUR 13.1 (8.7) million, representing 7.7 (4.6)% of turnover. The result for the review period was EUR 10.7 (5.2) million. Earnings per share were EUR 0.18 (0.09), and return on investment was 13.3 (8.4)%. A total of EUR 1.3 million of non-recurring income items have been recorded for the ongoing year, most of which are profits from the sale of fixed assets. Write-downs of the material and product stores of terminated products totalled EUR 1.8 million. Last year's result was burdened by a non-recurring expense item of EUR 7.6 million related to the termination of the Belgian subsidiary's production. Turnover in July – September was EUR 59.1 (67.5) million. Operating profit in the third quarter totalled EUR 5.6 (7.0) million, representing 9.4 (10.4)% of turnover. The result for July – September includes EUR 0.3 million of positive non-recurring items.As regards terminated products, a write-down of EUR 0.8 million was made in the third quarter for material and product stores. Owing to the structure of the company's operations, the effects of changes in exchange rates on the result were minimal. If the US dollar remains weak or continues to weaken, it will mainly have a declining impact on the turnover and expenses of the Asian operations. Changes in the US dollar exchange rate will not have a significant effect on the relative profitability of the Asian operations. The Group enjoys a strong financial position. Liabilities amounted to EUR 48.5 (71.8) million, EUR 41.0 (54.3) million of which were non-interest-bearing and EUR 7.5 (17.5) million interest-bearing. Liquid cash assets totalled EUR 42.0 (39.2) million. The equity ration was 73.0 (63.8)% and gearing –26.4 (-17.1)%. Cash flow from operating activities in the review period was positive at EUR 13.6 (12.5) million. Gross investments in fixed assets totalled EUR 1.2 (5.6) million, which is 0.7 (2.9)% of turnover. Investments consists mainly machinery and equipment purchases. Depreciations were EUR 5.6 (6.6) million.
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