The reporting quarter was successful for the Harju Elekter Group. The large agreements and purchase orders concluded at the end of the year increased the sales revenues and operating profit, and the realisations of the takeover bids for the shareholders of PKC Group Oyj earned a one-time financial profit in the amount of 24.8 million euros.
|
Change% |
January – March |
Year |
||
|
|
2017 |
2016 |
2016 |
|
| Revenue (thousand euros) |
49.0 |
17,519 |
11,757 |
61,167 |
| Gross profit (thousand euros) |
29.0 |
2,670 |
2,069 |
10,348 |
| EBITDA (thousand euros) |
34.6 |
1,050 |
780 |
4,777 |
| EBIT (thousand euros) |
71.3 |
668 |
390 |
3,181 |
| Profit for the period (thousand euros) |
8,063.2 |
25,366 |
311 |
3,224 |
| incl attributed to Owners of the Company (thousand euros) |
7,726.0 |
25,374 |
324 |
3,219 |
In the accounting quarter, the Group’s consolidated revenue was 17.5 (Q1 2016: 11.8) million euros. Sales revenue of the reporting quarter increased by 49% or 5.8 million euros in relation to the comparison period. 92% of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 8% of the consolidated sales volume. The sales of electrical equipment accounted for 95% (Q1 2016: 94%) of the sales revenue of the Production segment and 88% (Q1 2016: 84%) of the sales revenue of the whole Group. The sale of electrical equipment was up by 56% or 5.5 million euros.
The Group’s sales revenue earned outside Estonia accounted for 77.4% in Q1 2017 (Q1 2016: 73.8%).
The Finnish market, which is the Group’s largest, has grown by 57% or 4.2 million euros year-on-year. In the reporting quarter, 67% of the Group’s products and services were sold on the Finnish market (Q1 2016: 63%). The main reason for the growth was the contracts concluded with Finnish network companies at the end of 2016, whose orders already began in Q1 of 2017.
The purposeful work of the Group and AS Harju Elekter Elektrotehnika continued for growing sales volume on the Swedish market, which resulted in growth of sales to the Swedish market in the reporting quarter – compared to the same period last year – by a fifth, to 1.0 million euros.
During the reporting quarter grew by 28.7% or 0.9 million euros up to 4.0 million euros of the Group’s products and services were sold on the Estonian market. It was 22.6% of the consolidated sales revenue.
Operating expenses increased 48.1% or 5.5 million euros in the reporting quarter compared to the reference period. The main reason for the upsurge in costs is rise of metal prices on the world markets, while the salaries of the manufacturing staff of the Group’s Estonian companies have also grown. The continued focus of the Group towards increasing exports has led to a rise in distribution costs, growing by 10% in the reporting quarter in respect to the comparable period. The rate of distribution costs accounted for 4.5% of the sales revenue (Q1 2016: 6.1%). Administrative expenses increased by 24.8%, i.e. 235 thousand euros in the reporting quarter. More than half of the increase was due to growth in development expenses related to new orders and thereby development of new products. The rate of administrative expenses to revenue accounted for 6.7%, having decreased by 1.4 percentage points.
In Q1 of 2017, an average of 490 employees worked in the Group, which is 37 people more than in the comparable period. As at the balance day on 31 March, there were 517 people working in the Group, which was 45 persons more than a year ago. From the beginning of the year, the number of employees increased by 37. In the reporting quarter, the employees were paid as salaries and fees 2,616 (Q1 2016: 2,374) thousand euros, which was 10.2% higher than in the reference period. The growth of wages was due to hiring new employees in connection with the significant increase in production volumes. The average monthly salary for an employee of the Group was 1,780 (Q1 2016: 1,747) euros.
In the reporting quarter the gross profit of the Group was 2,670 (Q1 2016: 2,069) thousand euros. The gross profit margin was 15.2% (Q1 2016: 17.6%).
The Group’s operating profit in the reporting quarter was 668 (Q1 2016: 390) thousand euros and EBITDA 1,050 (Q1 2016: 780) thousand euros. Return of sales for the accounting quarter was 3.8% (Q1 2016: 3.3%) and return of sales before depreciation 6.0% (Q1 2016: 6.6%).
The profit before taxes for the reporting quarter was 25,505 (2016 QI: 385) thousand euros. The calculated income tax expense of three months was 139 (2016 IQ: 74) thousand euros.
In the reporting quarter, the consolidated net profit was 25,366 (Q1 2016: 311) thousand euros, of which the share of the owners of the Company was 25,374 (Q1 2016: 324) thousand euros. EPS in the Q1 2017 was 1.43 euros (Q1 2016: 0.02 euros). Large net profit was the result of Motherson Sumi Systems Limited acquiring the shares of PKC Group Oyj at the price of EUR 23.55 per share. AS Harju Elekter owned 1,094,641 shares of PKC Group Oyj. Financial income from the sale of shares was 24,839 thousand euros.
In Q1 2017, EPS was 1.43 (Q1 2016: 0.02) euros. During the reporting quarter, Harju Elekter’s share in Nasdaq Tallinn increased by 32.5% from 2.83 euros up to 3.75 euros.
In three months’ period, the Group has made a total of 1.7 million (Q1 2016: 49 thousand) euros worth of investments to property, plant and equipment and investment properties. Investment growth is related to the ongoing developments of Allika Industrial Park.
Andres Allikmäe
Chairman of the Management Board
+372 674 7400
For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-3/2017
| AS HARJU ELEKTER | ||
| CONSOLIDATED BALANCE SHEET,31.03.2017 | ||
| Unaudited | ||
| EUR’000 | ||
| ASSETS | 31.03.17 | 31.12.16 |
| Cash and cash equivalents | 26 517 | 3 278 |
| Trade receivables and other receivables | 11 458 | 8 480 |
| Prepayments | 793 | 771 |
| Prepaid income tax | 70 | 24 |
| Inventories | 11 917 | 9 712 |
| TOTAL CURRENT ASSETS | 50 755 | 22 265 |
| Deferred income tax asset | 37 | 37 |
| Other long-term financial investments | 4 684 | 21 990 |
| Investment property | 14 181 | 13 273 |
| Property, plant and equipment | 11 004 | 10 972 |
| Intangible assets | 5 848 | 5 431 |
| TOTAL NON-CURRENT ASSETS | 35 754 | 51 703 |
| TOTAL ASSETS | 86 509 | 73 968 |
| LIABILITIES AND OWNERS’ EQUITY | ||
| Interest-bearing loans and borrowings | 720 | 804 |
| Advances from customers | 1 104 | 857 |
| Trade payables and other payables | 10 528 | 8 283 |
| Payables to shareholders | 0 | 1 242 |
| Tax liabilities | 1 675 | 1 075 |
| Income tax liabilities | 61 | 133 |
| Short-term provision | 15 | 15 |
| TOTAL CURRENT LIABILITIES | 14 103 | 12 409 |
| NON-CURRENT LIABILITIES | 3 014 | 1 167 |
| TOTAL LIABILITIES | 17 117 | 13 576 |
| Share capital | 11 176 | 11 176 |
| Share premium | 804 | 804 |
| Restricted reserves | 2 844 | 19 214 |
| Retained earnings | 54 487 | 29 113 |
| TOTAL OWNERS’ EQUITY | 69 311 | 60 307 |
| Non-controlling interests | 81 | 85 |
| TOTAL EQUITY | 69 392 | 60 392 |
| TOTAL LIABILITIES AND OWNERS’ EQUITY | 86 509 | 73 968 |
| CONSOLIDATED INCOME STATEMENT, 1-3/2017 | ||
| Unaudited | ||
| EUR’000 | Q1 2017 | Q1 2016 |
| Revenue | 17 519 | 11 757 |
| Cost of goods sold | -14 849 | -9 688 |
| Gross profit | 2 670 | 2 069 |
| Distribution costs | -796 | -723 |
| Administrative expenses | -1 182 | -947 |
| Other income | 2 | 10 |
| Other expenses | -26 | -19 |
| Operating profit | 668 | 390 |
| Finance income | 24 846 | 1 |
| Finance costs | -9 | -6 |
| Profit from normal operations | 25 505 | 385 |
| Corporate income tax | -139 | -74 |
| Profit for the period, attributable to | 25 366 | 311 |
| owners of the Company | 25 374 | 324 |
| non-controlling interests | -8 | -13 |
| Basic earnings per share (EUR) | 1,43 | 0,02 |
| Diluted earnings per share (EUR) | 1,43 | 0,02 |
Tiit Atso
CFO
+372 674 7400
