FPC’s Q2 Results Show Impact of COVID Outbreak

Fingerprint Cards has indeed fallen short of its initial revenue targets for Q2 of 2021, as the company had recently warned might be the case; but it still managed to deliver a year-over-year revenue increase.

In its Q1 update, the biometrics specialist had forecast a revenue range of SEK 330 million to SEK 370 million for the second quarter. Then COVID-19 threw a curveball, with an outbreak causing one of FPC’s key suppliers in Vietnam to shut down its production facilities, prompting the Sweden-based company to issue a warning in which it indicated that revenues for the quarter would likely be lower than expected.

Now, the company has posted its official Q2 results, showing that revenues came in at SEK 290.2 million – lower than the bottom of its initial forecast range, but three percent higher than its revenues of SEK 282.3 million in the same quarter of 2020.

In a statement, Fingerprint Cards CEO Christian Fredrikson explained that after the COVID-19 outbreak, the Vietnam production facility was restarted in the second half of June, allowing FPC’s supplier to start to get back on track. FPC now anticipates that production capacity for this supplier will be fully restored during the third quarter, while FPC has also secured extra production capacity through other suppliers.

Fredrikson also asserted that the company’s leadership expect that the sales lost due to the plant closure “will be recouped in the coming quarters.”

As for its other Q2 results, Fingerprint Cards is reporting an EBITDA of SEK 9.4 million for Q2 of 2021, compared to an EBITDA of SEK 6.7 million in the same period of 2020. Its bottom line, however, went from a loss of SEK 22.3 million in Q2 of 2020 to a loss of SEK 25 million in the most recent quarter.

Nevertheless, Fredrikson pointed out a number of bright spots in the company’s business efforts, including “healthy” demand for its solutions, positive trends in the mobile and PC biometrics markets, and the growing momentum behind biometric payment cards, where FPC “has a world-leading position”, with its technology being used “in all of the commercial launches of biometric payment cards announced to date”.

The Q2 report comes shortly after the announcement the Fingerprint Cards’ board of directors would conduct a strategic review in which a number of major corporate changes will be considered, including the possibilities of acquisitions, sales, and spin-offs, among other maneuvers.

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July 16, 2021 – by Alex Perala