Fingerprint Cards issues interim report for Q3 2017

Fingerprint Cards issues interim report for Q3 2017

Fingerprint Cards AB (FPC) issued its interim report for Q3 2017, in which the company’s revenues amounted to SEK 841.4 M (US$101.3 M), down 55 percent compared to SEK 1,862.3 M (US$224.0 M) it reported in Q3 2016.

The company’s gross margin was 33 percent compared to 49 percent in the year-earlier period. Operating profit amounted to SEK 52.4 M (US$6.3 M), compared to SEK 764.5 M (US$92.0 M) in the year-earlier period.

FPC’s earnings per share before dilution totaled SEK 0.16 M (US$20,000), compared to SEK 1.89 M (US$230,000) in the year-earlier period.

In addition, the company’s cash flow from operating activities amounted to SEK 174.7 M (US$21.0 M), compared to SEK 134.5 M (US$16.2 M) in the year-earlier period.

For the accumulative period between January and September 2017, FPC’s revenues totaled SEK 2,350.7 M (US$282.8 M), down 53 percent compared to SEK 5,019.6 M (US$604.3 M) it reported in the year-earlier period.

The gross margin was 37 percent, compared to 49 percent in the year-earlier period. FPC’s operating profit amounted to SEK 195.2 M (US$23.5 M), compared to SEK 2,058.2 M (US$248.2 M) in the year-earlier period.

Earnings per share before dilution totaled SEK 0.44 M (US$53,000), compared to SEK 5.04 M (US$610,000) in the year-earlier period. The company’s cash flow from operating activities amounted to SEK 378.6 M (US$45.7 M), compared to SEK 944.3 M (US$113.8 M) in the year-earlier period.

FPC CEO Christian Fredrikson said the company’s lower earnings for Q3 2017 can be attributed to the cautious market situation and noticeable price pressure. However, he said it continued to reduce its own inventories and maintained a strong cash flow.

Fredrikson said FPC is implementing a few initiatives to enable it to restore growth and improve profitability, including pursuing a combination of technology and product development in order to reduce production costs and develop new, innovative products; focusing on business development in order to increase the number of application areas for technology and expand its customer base; and increasing efficiency and lowering costs throughout the supply chain.

He also explained that there were “a number of concurrent technological trends and uncertainty factors that caused [its] Chinese OEM customers to adopt a highly cautious approach during the quarter”, which resulted in its customers opting to shorten their planning horizons and component inventories in the value chain have decreased from normal levels.

Coupled with the consolidation FPC said it is witnessing in the value chain, this ultimately impeded market growth and its deliveries during the quarter.

“Fingerprints’ market position remains very strong,” Fredrikson said. “During the quarter, 27 mobile devices equipped with our sensors were launched and we announced the first product launch of FPC1028, a high-performance, cost-efficient sensor. Fingerprints’ smart card offering is attracting considerable and growing interest, even though it will take time for market volumes to become comparable with those we are currently seeing in the smartphone marke. As the only player in this space with extensive experience in the mass production of sensors, Fingerprints has a very strong starting position in the promising smart card market.

“During the quarter, we took the next step toward high-volume production of Fingerprints’ smart card sensors through the launch of the new module design T-Shape. We also joined the standardization work being carried out by Eurosmart and announced that our sensors will be used in AirPlus’s pilot project for contactless payment cards. To create the conditions for profitable growth, we are pursuing a number of technology and market initiatives and are continuing to invest in new innovations. We will talk more about this at our Technology Update on November 1 in Stockholm.”

Earlier this month, Fingerprint Cards (FPC) commissioned research group Kantar TNS to conduct a study on how consumers perceive biometrics, including which methods are being used, for what, and why.

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