Circuits Assembly Online Magazine - Scanfil Returns to Black in Q2, Ups 2017 Guidance

HELSINKI -- Scanfil reported June quarter revenue of EUR 132.4 million, down 1% from a year ago.

The EMS company swung to a net profit of EUR 4.3 million, up from a loss of EUR 6.1 million in 2016. The operating profit was EUR 7.1 million, versus a loss of 3.6 million last year.

The second-quarter operating profit includes a sales gain of EUR 1.2 million from the sale of the factory property of Rozalia Invest Kft., Hungary, a 100% owned subsidiary of Scanfil EMS Oy. In addition, operating profit includes a total of EUR 1 million expenses related to the closure of the plants in Finland and Hungary and other individual nonrecurring expenses.

Second quarter sales rose about 10% compared to the first quarter. Growth was driven by generally higher customer demand and several strong new customer ramps.

CEO Petteri Jokitalo said: "Scanfil's strong performance in the second quarter shows that the selected strategy works. The factory network is now optimized, and the cost structure is clearly lower and more competitive, enabling profitable business.

The fixed costs of the closed Vantaa and Hungarian factories were still burdening the second quarter results, and the production ramp-ups in Myslowice and Sievi contributed extra costs. The restructuring of the factory network has now been completed, and I expect to see the positive results in full impact during the rest of the year. We are well on the way to targeted 6% operating profit."

Scanfil forecast 2017 sales of EUR 500 million to 530 million and operating profits of EUR 28 million to 31 million. That's up from previous company guidance of EUR 480 million to 520 million in sales and operating profits of EUR 26 million to 31 million.

"Many of our customers have indicated that the strengthen economic development, especially in North America and Europe, will improve their business outlook," Jokitalo said. "This can also be seen in higher demand in Scanfil’s services."

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