Incap estimates that its revenue and operating profit (EBIT) for 2023 will be lower than in 2022. The decrease in the revenue and operating profit estimate is related to Incap’s largest customer, who has decided to reduce inventory levels and is therefore postponing some orders from 2023 to 2024.

With the current change in the market dynamics including improved component availability as well as a recession in some key markets, the customer has built up too high inventory levels, as growth is smaller than they initially projected.

Incap has a long-term relationship with the customer and is working closely with them by adjusting the production volumes to help them reduce their inventory levels. The inventory adjustment period is expected to be temporary. The customer is in a strong financial position, and the outlook for their business remains good.

Incap expects growing revenue from most of its other customers, but the growth is not enough to compensate for the decreased sales to the largest customer.

Previously Incap estimated that its revenue, operating profit (EBIT) and adjusted operating profit (EBIT) for 2023 would be higher than in 2022.

Incap’s business review for January–March 2023 will be published on 26 April 2023.

Source: EMS Now