Publication of financial reports in 2019

AS Harju Elekter wishes to the shareholders Happy Holiday Season and informs you that in the year 2019, the consolidated financial results of AS Harju Elekter will be published as following:

2018 4Q results                      27.02.2019
2019 1Q results                        2.05.2019
AGM                                         2.05.2019
2019 2Q results                      31.07.2019
2019 3Q results                      30.10.2019

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at www.harjuelekter.ee

Andres Allikmäe
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Extension of delivery contract until 2020

Caruna, Finland’s largest distribution network company, approved the extension of the delivery contract (signed in 2016) for substations for a term of two years until 2020. The estimated total volume of the contract for next 2 years is 24 million euros.

The contract, concluded between Harju Elekter and Caruna on 19 December 2016, has significantly increased the manufacturing of substations in the Estonian and Finnish factories of the Harju Elekter Group. In addition to standard production, more than 1000 compact secondary substations are manufactured each year for the Caruna Group alone, which has resulted in an increase in the annual output of substations manufactured in factories here to more than 4000 substations.

The vigorous expansion of the Harju Elekter Group over the past few years in terms of the acquisition of business associations, entry into new markets and the ever-closer integration of subsidiaries increases the capacity of the Group to offer its customers more comprehensive technical-engineering solutions, turnkey projects and support services.

Caruna is the largest company in Finland dedicated to the transmission of electricity. Countrywide, Caruna holds a market share of about 20 per cent of local electricity transmission and provide electricity to 650,000 private and corporate customers in South, Southwest and West Finland, as well as in the city of Joensuu, the sub-region of Koillismaa and the Satakunta region.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ 700 specialists, and 9 months sales revenue of the Group was 89.1 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-9/2018

AS Harju Elekter has focused on increasing sales and gaining market share in Scandinavia. 9-month sales revenue increased by 21%, but reaching the desired profitability requires additional time and expenses. The fulfilment of contractual orders in the third quarter was hampered by restrictions on electrical work related to fire risk in certain areas of Finland. Profitability was substantially affected by the potential loss in the third quarter of 1.5 million euros in connection with the additional costs of shipbuilding electrical works. The actual result will be clear at the end of negotiations and legal disputes.

Change

January – September

Change

July – September

Year

(thousand euros)

%

2018

2017

%

2018

2017

2017

Sales revenue

20.7

89,134

73,850

-6.2

29,298

31,228

102,668

Gross profit

0.5

11,108

11,055

-35.5

2,963

4,580

15,625

EBITDA

-31.4

3,300

5,241

-72.1

654

2,347

7,587

EBIT

-65.2

1,406

4,037

-99.5

9

1,915

5,442

Profit for the period

-95.9

1,158

28,186

-99.1

18

1,798

29,132

incl attributed to Owners of the Company

-95.8

1,190

28,153

-99.4

11

1,798

29,129

The Group’s consolidated revenue for nine months reached to 89.1 (9M 2017: 73.8) million euros, of which 29.3 (Q3 2017: 31.2) million euros was earned in reporting quarter. The sales revenue decreased by 1.9 million euros in the reporting quarter but increased in 9-months period by 15.3 million euros compared to the reference periods. The boost in sales volumes was due to the increase in order volumes and the acquisition of new business combinations in the second half of 2017 and in January 2018.

During the reporting quarter 85.2% (Q3 2017: 80.0%) of the Group’s revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 14.8% (Q3 2017: 20.0%) of the consolidated sales revenue. During 9-months period, the Manufacturing segment contributed 82.0% (9M 2017: 86.0%) of the consolidated sales revenue. Sales of electrical equipment contributed the biggest part (93-96%) of the Manufacturing segment’s revenue. The sales revenue of the Real Estate segment increased to 0.6 million euros in Q3 and to 1.8 million euros in nine months. The new production and storage buildings completed in the Allika industrial park in autumn 2017 and rented out to AS Stera Technologies AS and the Laohotell that was taken into use at the beginning of the current year have increased the rental income of this year.

The Group’s sales revenue earned outside Estonia accounted for 85.3% in Q3 2018 (Q3 2017: 88.7%), decreasing by 2.7 million to 25.0 million euros and in nine months 88.0% (9M 2017: 83.3%), increasing by 16.9 million to 78.5 million euros.

In Q3, sales to the Estonian market increased by 22.0% to 4.3 million euros and accounted for 14.7% of the consolidated sales revenue of the reporting quarter. Over the course of 9 months, the sale to Estonian market still dropped 13.3% due to the low investment level of the electrical distribution sector, i.e. 1.6 million euros, to 10.7 million euros and made 12.0% of the Group’s sales revenues.

The Group’s largest market is Finland, where 60.0% in Q3 2018 and 66.5% in 9-months period of the Group’s products and services were sold (78.0% and 72.0%, respectively in 2017). In the quarterly comparison, sale to the Finnish market has decreased by 6.8 million euros to 17.6 million, half of which was caused of the decline in the orders of Finnish grid companies. Compared to nine months, Finland’s sales increased up to 59.2 million euros i.e. by 6.1 million euros. Half of the growth came from the Finnish subsidiary Telesilta Oy, acquired in June 2017, but also large-scale contracts concluded with Finnish grid companies in the years 2016-2017 were behind the growth.

Comparing to the same periods last year, the sales to Swedish market has fivefold in Q3 2018 and increased to 3.4 million euros and have increased by 6.2 million euros to 8.4 million euros in 9-months period, accounting for 9.4% (9M 2017: 3.0%) of the total sales revenue. The growth came from acquisition new companies to the Group as well as Group’s subsidiaries purposeful work to increase market share in Sweden. In Q1, AS Harju Elekter Elektrotehnika signed a 3-year frame agreement with the biggest Swedish grid company E.ON Energidistribution AB, to deliver substations to Sweden. Deliveries of substations started in Q3. Altogether, 150 substations have been delivered to Sweden in nine months, being three times more than in the entire year 2017. Active work on Norwegian-direction continued also. The sales to the Norwegian market increased by 1.1 million euros up to 2.3 million euros in Q3 and in 9-months period by 2.1 million euros to 5.6 million euros, accounting for 7.9% and 6.3% of consolidated sales revenue, respectively.

From other markets, the biggest were the Netherlands, Austria and Denmark, where 1.7 million, 1.7 million and 0.8 million euros were earned during 9-months period, respectively.

In the reporting quarter, operating expenses amounted 29.3 million euros remaining on the same level with the comparable period and increased by 17.9 million euros to 87.7 million euros in 9-months period. The principal part of the cost increase, i.e. 15.2 million euros, is attributable to the greater cost of sales, outpacing the growth rate of sales revenues and reducing the 9-month gross profit margin in relation to the comparable period by 2.5 percentage points. The Group’s distribution costs amounted 1.1 million euros in Q3 and 3.6 million euros in nine months. The rate of distribution costs accounted for 3.6% (Q3 2017: 3.1%) of the sales revenue in the reporting quarter and 4.1% (9M 2017: 3.8%) in 9-months period. Upsurge in specific orders has brought along an increase in development costs for upgrading the exiting products and for developing a new low-voltage product series and the brand. Recruitment of new specialists and qualifying of the staff resulted in training and new job preparation costs; the higher salary levels of the top managers of the subsidiaries in Sweden and Finland also affected the costs. All this has grown the rate of administrative expenses to reporting quarter revenue to 6.4% (Q3 2017: 5.3%). In nine months, administrative expenses amounted 6.0 million euros increasing by 1.8 million euros and the rate of administrative expenses to sales revenue was 6.7% (9M 2017: 5.6%). The labour costs of the reporting period have increased due to the bigger number of staff in the Group as well as the wage pressure. Moreover, the number of employees in Group’s subsidiaries in Finland and Sweden has also increased, with the wage level being significantly higher than in the Group’s other enterprises. Labour costs increased by 13.4% up to 5.8 million euros in Q3 and by 37.3% up to 18.0 million euros during 9-months period. The labour costs rate to revenue of the reporting quarter accounted for 19.9% (Q3 2017: 16.4%) and in the nine months it was 20.1% (9M 2017: 17.8%).

In Q3 2018, an average of 733 employees worked in the Group, which was 115 people more than in the comparable period. In nine months, an average of 709 employees worked in the Group, which was 159 people more than in the reference period. At the end of the reporting period, there were 728 people working in the Group, which was 104 persons more than a year earlier. From the beginning of the year, the number of employees increased by 98 people. With the acquisition of SEBAB AB and Grytek AB, 45 employees were added to the Group. In the reporting quarter, 4,766 (Q3 2017: 4,020) thousand euros and 14,046 (9M 2017: 9,945) thousand euros during the 9-months period were paid to the employees as salaries and fees. In the nine months, the average monthly salary per employee of the Group was 2,203 euros, an average increase of 193 euros compared to the reference period.

In the reporting quarter, the gross profit of the Group was 2,963 (Q3 2017: 4,580) thousand euros and the gross profit margin was 10.1% (Q3 2017: 14.7%). In 9-months period, the consolidated gross profit was 11,108 (9M 2017: 11,055) thousand euros and the gross profit margin was 12.5% (9M 2017: 15.0%). The decline in profitability was caused by amortisation of customer agreements recorded in 2017; the potential loss in the third quarter of 1.5 million euros in connection with the additional costs of shipbuilding electrical projects was taken into account also. The actual result will be clear at the end of negotiations and legal disputes.

In Q3, the Group’s operating profit was 9 (Q3 2017: 1,915) thousand euros and EBITDA 654 (Q3 2017: 2,347) thousand euros. In 9-months period, the Group’s operating profit was 1,406 (9M 2017: 4,037) thousand euros and EBITDA 3,300 (9M 2017: 5,241) thousand euros. Return of sales for nine months was 1.6% (9M 2017: 5.5%) and return of sales before depreciation 3.7% (9M 2017: 7.1%). Integrating newly acquired businesses has increased distribution and development costs. Preparations for new and already won procurements continue, leading to higher development costs, and due to hiring new specialists, increase labour costs. The profitability was also affected by one-off expenses due to the move of AS Harju Elekter Teletehnika into new premises and re-certification of subsidiaries’ quality and environmental management systems.

In Q3, the consolidated net profit was 18 (Q3 2017: 1,798) thousand euros, of which the share of the owners of the Company was 11 (Q3 2017: 1,798) thousand euros. All in all, the consolidated net profit in nine months was 1,157 (Q3 2017: 28,186) thousand euros, of which the share of the owners of the Company was 1,190 (9M 2017: 28,153) thousand euros. In the nine months, EPS was 0.07 euros (9M 2017: 1.59 euros). In 9-months 2017, the consolidated net profit without extraordinary income (the result of one-time financial income from the sale of the PKC Group Oyj shares in amount of 24,839 thousand euros) was 3,314 thousand euros.

In 9 months 2018, the Group has made a total of 7.5 (9M 2017: 7.2) million euros worth of investments to fixed assets, incl. acquisitions through business combinations amounted to 1.0 (9M 2017: 1.7) million euros and the ongoing developments in Allika Industrial Park and in the construction of the Haapsalu solar plant in amount of 2.0 million euros.

In the end of the period, the share of Harju Elekter in Nasdaq Tallinn stood at the same, 5.00-euro level as at the beginning of the year.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-9/2018

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,30.09.2018
Unaudited
EUR’000
ASSETS 30.09.18 31.12.17
Cash and cash equivalents 1,868 10,992
Short-term financial investments 5,414 9,935
Trade receivables and other receivables 22,711 13,575
Prepayments 1,299 1,118
Prepaid income tax 274 56
Inventories 18,974 13,037
TOTAL CURRENT ASSETS 50,540 48,713
Deferred income tax asset 56 56
Other long-term financial investments 4,696 4,684
Investment property 18,938 17,881
Property, plant and equipment 15,879 11,983
Intangible assets 7,211 6,660
TOTAL NON-CURRENT ASSETS 46,781 41,264
TOTAL ASSETS 97,321 89,977
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 5,334 625
Advances from customers 1,989 1,088
Trade payables and other payables 15,943 12,802
Tax liabilities 2,838 2,106
Income tax liabilities 18 270
Short-term provision 40 245
TOTAL CURRENT LIABILITIES 26,162 17,136
Interest-bearing loans and borrowings 4,411 2,910
Other long-term liabilities 35 0
NON-CURRENT LIABILITIES 4,446 2,910
TOTAL LIABILITIES 30,608 20,046
Share capital 11,176 11,176
Share premium 804 804
Reserves 2,715 2,844
Retained earnings 52,040 55,048
TOTAL OWNERS’ EQUITY 66,735 69,872
Non-controlling interests -22 59
TOTAL EQUITY 66,713 69,931
TOTAL LIABILITIES AND OWNERS’ EQUITY 97,321 89,977
CONSOLIDATED INCOME STATEMENT,  1-9/2018
Unaudited
EUR’000 Q3 2018 Q3 2017 9m 2018 9m 2017
Revenue 29,298 31,228 89,134 73,850
Cost of sales -26,335 -26,648 -78,026 -62,795
Gross profit 2,963 4,580 11,108 11,055
Distribution costs -1,052 -983 -3,644 -2,807
Administrative expenses -1,882 -1,658 -5,998 -4,162
Other income 17 9 60 39
Other expenses -37 -33 -120 -88
Operating profit 9 1,915 1,406 4,037
Finance income 171 120 523 24,966
Finance costs -15 -7 -38 -23
Profit for the period 165 2,028 1,891 28,980
Income tax expense -147 -230 -734 -794
Profit for the period, attributable to 18 1,798 1,158 28,186
   owners of the Company 11 1,798 1,190 28,153
   non-controlling interests 7 0 -33 33
Basic earnings per share  (EUR) 0.00 0.10 0.07 1.59
Diluted earnings per share  (EUR) 0.00 0.10 0.07 1.59

Tiit Atso
CFO
+372 674 7400

Download report

Harju Elekter raises its technology capacity

Today, on 6 September, AS Harju Elekter’s subsidiary AS Harju Elekter Teletehnika festively opened a fully automated sheet metal processing line in the new section of its factory. The activation of the robotised production line, supplied by Finnish company Finn-Power Oy, increases the factory’s capacity to flexibly produce both small and large batches in a single stream, exponentially increasing the factory’s productivity and bringing manufacturing within the Group to the smart factory i.e. Industry 4.0 level. The need to increase the production volume of sheet metal components was made necessary by the efficient fulfilment of the increased number of orders to the Group’s undertakings, as well as clients outside of the Group.

Within the framework of the technological upgrades, a hi-tech bending machine was also acquired from the company AMADA, along with a fully automatic mounting press for pressed accessories from the company Haeger, which was integrated with the FMS automated sheet metal processing line. In addition, a 2300 m2 section of the production hall was renovated, during the course of which the subsidiary’s production space increased to nearly 9000 m2. The total cost of the investments was 3 million euros.

The main activities of AS Harju Elekter Teletehnika include a range of customer-based sheet metal products and semi-manufactured articles are produced for the electrical engineering and energy sectors as well as for the telecom sector. In addition, subcontracting works are carried out and services rendered in the area of sheet metal processing and finishing. In 2017, the sales revenue of Harju Elekter Teletehnika amounted to 5.1 million euros, and the share of export in sales revenue amounted to 26%. The company employs 91 people.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 750 specialists, and 6 months sales revenue of the Group was 59,8 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter expands production capacity in Lithuania

Harju Elekter’s Lithuanian subsidiary RIFAS UAB concluded a contract with construction company Panevezio Statybos Trestas AB for the expansion of its production facilities in Panevežys. The total cost of the contract is 2.4 million euros, and the contract includes an option for additional extension (800 sq.m). Construction will start after RIFAS will get permission for construction, within September 2018 latest. In 2019, after the completion of the construction work, the office and production area of the Lithuanian subsidiary will increase from 3,500 sq.m to 8,200 sq.m. The extension allows for significant increase of production capacity to provide products and solutions for our customers in shipbuilding and industry segments.

RIFAS UAB, AS Harju Elekter’s Lithuanian subsidiary, belongs to the Group since 2003. RIFAS provides contract manufacturing services delivering tailor made electrotechnical systems for marine and industrial system integrators.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 750 specialists, and 6 months sales revenue of the Group was 59,8 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-6/2018

In Q2, many orders that were delayed in Q1 continued to be performed. Production and sales for Estonian, Finnish and Lithuanian enterprises began swiftly and sales revenue has increased in this area significantly. Primarily, sales of substations to Finland increased. H1 as well Q2 began much more modestly for Swedish companies, in the case of which the execution of the new substations contract only began at the end of Q2 and new large orders were also received at the end of the reporting quarter. In H1, preparation and development costs continued to increase in order to execute the Swedish and Finnish procurement contracts that had already been won and to integrate newly acquired businesses.

Change

January – June

Change

April – June

Year

(thousand euros)

%

2018

2017

%

2018

2017

2017

Sales revenue

40.4

59,837

42,622

34.9

33,851

25,102

102,668

Gross profit

25.8

8,146

6,476

26.2

4,802

3,805

15,625

EBITDA

-8.5

2,647

2,894

-2.5

1,797

1,844

7,587

EBIT

-34.1

1,398

2,123

-19.9

1,166

1,455

5,442

Profit for the period

-95.7

1,140

26,389

-1.5

1,038

1,023

29,132

incl attributed to Owners of the Company

-95.5

1,180

26,356

6.6

1,047

982

29,129

The Group’s consolidated revenue increased by 34.9% to 33.9 million euros in the reporting quarter. The consolidated sales revenue of the half-year increased by 40.4% and reached 59.8 million euros compared to the reference period. The boost in sales volumes was due to the increase in order volumes and the acquisition of new business combinations in the second half of 2017 and in January 2018.

During the reporting quarter 81.5% (Q2 2017: 89.3%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 18.5% (Q2 2017: 10.7%) of the consolidated sales revenue. In H1, the Manufacturing segment contributed 80.5% (H1 2017: 90.4%) of the consolidated sales revenue. The sales revenue of the Real Estate segment increased by 0.2 million euros to 0.6 million euros in Q2 and by 0.3 million euros to 1.2 million euros in H1, compared to the reference period. The increase in the sales revenue in the Real Estate segment compared to the previous period is related to a long-term major tenant leaving the Group’s rental space at the beginning of 2017, which reduced the sales revenue of the reference period. The new production and storage buildings completed in the Allika industrial park in autumn 2017 and rented out to AS Stera Technologies AS and the Laohotell that was taken into use at the beginning of the current year have halted the decrease in the sales revenue of the Real Estate segment and increased the rental income of this year. The sales revenue of Unallocated activities has increased by 3.4 million euros to 5.7 million euros in the quarterly comparison, and in first 6 months by 7.3 million euros up to 10.4 million euros.  Electrical installation work, which was added to the Group since second half of 2017, contributed over 90% of the segment’s sales revenue.

The sales revenue increased by 8.7 million euros in Q2 and by 17.2 million euros in half-year comparison, of which 5.9 million euros in the reporting quarter and 10.7 million euros in H1 came from the increase in sales of electrical equipment. Important part of the 27.5% growth of the electrical equipment sales came from the purchase of a Swedish subsidiaries.

In Q2 2018, the Group’s sales revenue earned outside Estonia accounted for 89.5% (Q2 2017: 80.8%) increasing by 10.0 million to 30.3 million euros and in the first half of the year for 89.4% (H1 2017: 79.4%) increasing by 19.6 million to 53.5 million euros.

The Group’s largest market is Finland. Both, in the reporting quarter and in the first half of the year, 70.0% of the Group’s products and services were sold on the Finnish market (68.3% and 67.6% respectively in 2017). In the quarterly comparison, sale to the Finnish market has grown by 6.5 million euros to 23.7 million euros and in the first 6 months by 44.6% i.e. 12.8 million euros up to 41.7 million euros. Half of the growth in the reporting quarter sales revenue came from the Finnish subsidiary Telesilta Oy, acquired in June 2017, but also large-scale contracts concluded with Finnish grid companies in the years 2016-2017 were behind the growth.

In Q2 2018, the sales to Swedish market has fourfold in quarterly comparison and increased to 3.0 million euros. In H1, sales to Sweden have increased by 3.4 million euros to 5.0 million euros, accounting for 8.3% (H1 2017: 3.7%) of the total sales revenue. The growth came from Group’s and Group’s subsidiaries purposeful work to increase market share in Sweden and combining new companies to the Group. AS Harju Elekter Elektrotehnika participation in several tenders resulted a 3-year frame agreement to deliver substations to E.ON Energidistribution AB. The deliveries of substation will start in Q3.

While comparing the quarters, sales to the Norwegian market decreased by 0.4 million euros but increased in the half-year comparison by 1.0 million euros to 3.3 million euros and stayed at 5.5% of the consolidated sales revenue. As the sale of the Group’s Lithuanian subsidiary has been directed towards other European countries, the Lithuanian market continues to decline.

Due to the low level of investment in the energy distribution sector, sales to the Estonian market in the second quarter decreased by 26.3% to 3.5 million euros and accounted for 10.5% of the consolidated sales revenue of the reporting quarter. In H1, sales to the Estonian market decreased by 27.4% i.e. 2.4 million euros to 6.4 million euros and accounted for 10.7% of the consolidated sales revenue of H1 2018.

Sales from other markets were majority earned from Austria, Denmark and the Netherlands, where 1.7 million, 0.7 million and 0.5 million euros were earned respectively.

Operating expenses increased by 38.1% i.e. 9.0 million euros in the second quarter and 44.3% i.e. 17.9 million euros in a half-year compared to the reference periods. The main reason for the upsurge in costs was the increase in the cost of sales:  by 7.8 million euros in Q2 2018 and by 15.5 million euros in H1 compared to the reference periods, exceeding the growth rate of sales revenue, while decreasing the gross profit margin by 1.0 percentage point and 1.6 percentage point respectively, compared to the reference periods. The labour costs of the reported period have increased due to the need to hire new employees to the Group because of increased production volumes as well as the wage pressure. Moreover, the number of employees in Group’s subsidiaries in Finland and Sweden has also increased, with the wage level being significantly higher than in the Group’s other enterprises. Labour costs increased by 52.0% up to 6.5 million euros in Q2 and by 52.7% up to 12.2 million euros in H1. The rate of labour costs accounted for 19.3% (Q2 2017: 17.2%) of the reporting quarter and for 20.4% (H1 2017: 18.7%) of the first 6-months period sales revenue. The Group’s distribution costs increased by 0.4 million euros to 1.4 million euros in Q2 and by 0.8 million euros to 2.6 million euros in H1. The rate of distribution costs accounted for 4.2% (Q2 2017: 4.1%) of the sales revenue in the reporting quarter and stood stable in 4.3 % in H1, compared to the reference periods.

The Group has incurred expenditures on the preparation of new procurements and completing the acquisition of new subsidiaries in 2018. Besides that, the exponential rise in the volume of specific orders has brought with it the need to hire additional specialists. The higher salary levels of the top managers of the new subsidiaries in Sweden and Finland also affected the costs. All this has increased administrative expenses by 0.9 million euros in Q2 and has grown the rate of administrative expenses to revenue to 6.5% (Q2 2017: 5.3%). In H1, administrative expenses amounted 4.1 million euros increasing by 1.6 million euros and the rate of administrative expenses to revenue was 6.9% (H1 2017: 5.9%). The growth in administrative expenses is mainly due to the increase in development costs.

In Q2 2018, an average of 713 employees worked in the Group, which was 171 people more than in the comparable period. In H1 2018, an average of 696 employees worked in the Group, which was 180 people more than in the reference period. At the end of the reporting period, there were 752 people working in the Group, which was 170 persons more than a year earlier. From the beginning of the year, the number of employees increased by 122 people, incl. 53 people in Q2. With the acquisition of SEBAB AB and Grytek AB, 45 employees were added to the Group and 7 more in Q2. In the reporting quarter, 4,906 (Q2 2017: 3,308) thousand euros and 9,281 (H1 2017: 5,925) thousand euros during the first 6 months were paid to the employees as salaries and fees. In H1, the average monthly salary per employee of the Group was 2,221 euros, an average increase of 307 euros compared to the reference period.

In the reporting quarter, the gross profit of the Group was 4,802 (Q2 2017: 3,805) thousand euros and the gross profit margin was 14.2% (Q2 2017: 15.2%). In H1, the consolidated gross profit was 8,146 (H1 2017: 6,476) thousand euros and the gross profit margin was 13.6% (H1 2017: 15.2%). The decline in profitability was caused by the raw material price as well as the significant increase in sales volume in the Swedish market, where margins are lower. According to the London stock exchange the customs tariffs change initiated by the US has brought all metal ore, except for aluminium, into decline. The price change could be reflected in Q3-4.

In Q2, the Group’s operating profit was 1,166 (Q2 2017: 1,455) thousand euros and EBITDA 1,797 (Q2 2017: 1,844) thousand euros. Return of sales for the reporting quarter was 3.4% (Q2 2017: 5.8%) and return of sales before depreciation 5.3% (Q2 2017: 7.3%). In H1, the Group’s operating profit was 1,398 (H1 2017: 2,123) thousand euros and EBITDA 2,647 (H1 2017: 2,894) thousand euros. Return of sales for the first half of the year was 2.3% (H1 2017: 5.0%) and return of sales before depreciation 4.4% (H1 2017: 6.8%). Integrating newly acquired businesses has increased distribution and development costs. Preparations for new and already won procurements continue, leading to higher development costs, and due to hiring new specialists, increase labour costs. The profitability was also affected by one-off expenses due to the move of AS Harju Elekter Teletehnika into new premises.

The profit before taxes for the reporting quarter was 1,497 (Q2 2017: 1,448) thousand euros. The calculated income tax expense of last three months was 459 (Q2 2017: 425) thousand euros. In Q2, the consolidated net profit was 1,038 (Q2 2017: 1,023) thousand euros, of which the share of the owners of the Company was 1,048 (Q2 2017: 982) thousand euros. EPS in the Q2 2018 was 0.06 euros (Q2 2017: 0.06 euros).

In H1, the profit before taxes was 1,726 (H1 2017: 26,953) thousand euros and the calculated income tax expense was 586 (H1 2017: 564) thousand euros. All in all, the consolidated net profit in H1 was 1,140 (H1 2017: 26,389) thousand euros, of which the share of the owners of the Company was 1,180 (H1 2017: 26,356) thousand euros. EPS in the H1 2018 was 0.07 euros (H1 2017: 1.49 euros). The consolidated net profit without extraordinary income of the H1 2017 (the result of one-time financial income from the sale of the PKC Group Oyj shares in amount of 24,839 thousand euros) was 1,550 thousand euros.

In H1 2018, the Group has made a total of 4.6 (H1 2017: 4.5) million euros worth of investments to fixed assets, incl. acquisitions through business combinations amounted to 1.0 (H1 2017: 0.7) million euros and the ongoing developments in Allika Industrial Park in amount of 1.0 (H1 2017: 2.9) million euros.

During H1 2018, Harju Elekter’s share in Nasdaq Tallinn increased by 3.2% from 5.00 euros up to 5.16 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-6/2018

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,30.06.2018
Unaudited
EUR’000
ASSETS 30.06.18 31.12.17
Cash and cash equivalents 2,997 10,992
Available-for-sale financial assets 5,251 9,935
Trade receivables and other receivables 24,248 13,575
Prepayments 1,204 1,118
Prepaid income tax 204 56
Inventories 19,832 13,037
TOTAL CURRENT ASSETS 53,736 48,713
Deferred income tax asset 56 56
Other long-term financial investments 4,696 4,684
Investment property 18,528 17,881
Property, plant and equipment 13,896 11,983
Intangible assets 7,359 6,660
TOTAL NON-CURRENT ASSETS 44,535 41,264
TOTAL ASSETS 98,271 89,977
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 3,893 625
Advances from customers 1,678 1,088
Trade payables and other payables 18,239 12,802
Tax liabilities 3,423 2,106
Income tax liabilities 69 270
Short-term provision 44 245
TOTAL CURRENT LIABILITIES 27,346 17,136
NON-CURRENT LIABILITIES 4,233 2,910
TOTAL LIABILITIES 31,579 20,046
Share capital 11,176 11,176
Share premium 804 804
Restricted reserves 2,715 2,844
Retained earnings 51,978 55,048
TOTAL OWNERS’ EQUITY 66,673 69,872
Non-controlling interests 19 59
TOTAL EQUITY 66,692 69,931
TOTAL LIABILITIES AND OWNERS’ EQUITY 98,271 89,977
CONSOLIDATED INCOME STATEMENT,  1-6/2018
Unaudited
EUR’000 Q2 2018 Q2 2017 6m 2018 6m 2017
Revenue 33,851 25,102 59,837 42,622
Cost of goods sold -29,049 -21,297 -51,691 -36,146
Gross profit 4,802 3,805 8,146 6,476
Distribution costs -1,431 -1,028 -2,592 -1,824
Administrative expenses -2,187 -1,322 -4,116 -2,504
Other income 24 28 38 30
Other expenses -42 -28 -78 -55
Operating profit 1,166 1,455 1,398 2,123
Finance income 343 0 353 24,846
Finance costs -12 -7 -25 -16
Profit from normal operations 1,497 1,448 1,726 26,953
Corporate income tax -459 -425 -586 -564
Profit for the period, attributable to 1,038 1,023 1,14 26,389
   owners of the Company 1,047 982 1,18 26,356
   non-controlling interests -9 41 -40 33
Basic earnings per share  (EUR) 0.06 0.06 0.07 1.49
Diluted earnings per share  (EUR) 0.06 0.06 0.07 1.49

Tiit Atso
CFO
+372 674 7400

Interim report 1-6/2018

Dividend payment ex-date of Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 17.05.2018 at the end of the working day of the settlement system.

Proceeding from the above, the ex-date is 16.05.2018. From that date the new owner of the shares is not entitled to dividends for the year 2017.

AS Harju Elekter will pay dividend 0.24 euros per share on 22.05.2018 by a transfer to the bank account of the shareholder.

Andres Allikmäe
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

AGM decisions

Today, on 3 May 2018 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 103 shareholders and their authorised representatives who represented the total of 12,577,346 votes accounting for 70.90 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2017;
2. Approval to profit distribution;
3. Appointment and remuneration of auditors;
4. Approval of the stock option programme

1. Approval to AS Harju Elekter annual report of the year 2017

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2017, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 89,977 thousand euros as of 31.12.2017, while the sales revenue of the financial year was 102,402 thousand euros and net profit 29,132 thousand euros.

The number of the votes given in favor of the resolution was 12,563,652 which accounted for 99.89 % of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2017 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2017

25,919,289 euros

total net profit of the financial year

 29,128,985 euros

total retained profit on 31.12.2017

55,048,274 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,24 euros per share*)

 4,257,571 euros

balance carried forward after profit distribution

50,790,703 euros

The dividends will be paid to the shareholders on 22 May 2018 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 17 May 2018 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 16.05.2018. From that date the new owner of the shares is not entitled to dividends for the year 2017.

The number of the votes given in favor of the resolution was 12,560,083 which accounted for 99.86 % of the voted participants.

3. Appointment and remuneration of auditors

The general meeting resolved:
To appoint AS PricewaterhouseCoopers, register code 10142876to perform the audit of AS Harju Elekter on the years 2018-2020. Consent obtained. The auditor will be remunerated according to the agreement.

The number of the votes given in favor of the resolution was 12,546,469 which accounted for 99.75 % of the voted participants.

4. Approval of the stock option programme

The general meeting resolved:
To approve the stock option program of Harju Elekter (hereinafter: Option Program) on the following basic terms and conditions:

1.   The purpose of the Option Program is to engage the key persons of enterprises belonging to the same group as Harju Elekter, incl. the members of the governing bodies, leading specialists and engineers, as shareholders of AS Harju Elekter, to motivate them to act in the name of achieving better economic outcomes for Harju Elekter, thereby ensuring the business development of AS Harju Elekter and involving additional funds in the equity of AS Harju Elekter, and therefore increasing the value of the shares of AS Harju Elekter.

2.   As part of the Option Program, AS Harju Elekter issues stock options each year in the amount of up to two per cent (2%) of the total number of the shares of AS Harju Elekter. The term of the Option Program is 3 (three) years, to which the term of realising the stock options is added.

3.   The circle of entitled persons in the Option Program is determined with a decision of the Supervisory Board of AS Harju Elekter based on the proposal of the Management Board of AS Harju Elekter.

4.   AS Harju Elekter notifies the entitled persons, referred to in Clause 3 of the Management Board decision, in writing.

5.   A person entitled to a stock option is given access to a maximum of 10,000 (ten thousand) stock options each year. Each stock option grants the right to acquire 1 (one) ordinary share of AS Harju Elekter.

6.   Persons entitled to take part in the Option Program have the right to acquire shares according to the terms and conditions specified in the option agreement concluded with them. Application of the terms and conditions of the Option Program and the procedure for the realisation of the stock option is established in the option agreement. The precise terms and conditions of the option agreement are established by the Supervisory Board of AS Harju Elekter and the agreements are concluded by the Management Board of AS Harju Elekter.

7.   Option agreements are concluded with the entitled persons in the first two weeks of June.

8.   With the aim of avoiding uncovered subscriptions, the entitled person must pay a contractual fee of ten euro cents (0.10 euros) for each stock option by the day of the conclusion of the option contract. The contractual fee is formalised as an interest-free loan to AS Harju Elekter and is accounted in the realisation of the stock options as part of the initial payment and returned if the stock options are not realised. If the entitled person has not concluded an option agreement within the time period specified in Clause 7, they shall lose the right to acquire the stock options allocated to them.

9.   The person entitled to the Stock Option has the right to realise the issued stock options within a three-year-period following the conclusion of the option agreement with them.

10.  The issue price of the shares acquired with the stock option is the average closing price as at 31 December on the NASDAQ Tallinn for the 3 (three) calendar years preceding the conclusion of the option agreement.

11.  In the case of the realisation of the stock options, the entitled person shall be obligated to pay for the shares of AS Harju Elekter in the amount of their issue price according to the option agreement concluded with them.

12.  A prerequisite for realising the stock options is that the persons entitled to the stock option have a current employment or professional relationship with a company belonging to the same group as Harju Elekter.

13.  A person entitled to the stock option does not have the right to transfer, pledge or in other way encumber or dispose of the stock options and they are not inheritable.

14.  In order to meet the conditions of the stock option in issuing new shares, they give the shareholder the right to receive dividends starting from the financial years when the shares were issued, given that the list of the persons entitled to dividends has not been established before the shares are issued.

15.  The general meeting of the shareholders of AS Harju Elekter gives the Supervisory Board of AS Harju Elekter the authorisation to issue the share options without the decision of the general meeting of the shareholders of AS Harju Elekter for each instance, given that the share options and the option agreements concluded to issue them are fully compliant with these terms and conditions.

16. In order to fulfil the terms and conditions of the Stock Option and realise the Stock Options, new shares are issued and the pre-emptive subscription rights of current shareholders is precluded based on §345 (1) of the Commercial Code.

The number of the votes given in favor of the resolution was 12,443,639 which accounted for 98.94 % of the voted participants.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-3/2018

The Group’s consolidated revenue increased by 48.3% to 26.0 million euros in the reporting quarter. The increase in sales revenue was supported by the acquisition of new business combinations in the second half of 2017. Q1 2018 profitability of the Group were below the initial expectations as a result of several combined impacts. In addition to the regular seasonality, the profitability of the quarter was influenced by postponed installation of works of many clients due to the cold winter months, resulting in a large quantity of production into the warehouse. In Q1, the heating and electricity costs also increased notably; in addition, several preparations and development works were undertaken to perform the new procurement contracts of Sweden and Finland. At the same time, positive trends in the market and high volume of order book is promising, looking at the upcoming quarters.

Change %

January – March

Year

(thousand euros)

2018

2017

2017

Sales revenue

48.3

25,986

17,519

102,668

Gross profit

25.2

3,344

2,670

15,625

EBITDA

-19.1

849

1,050

7,587

EBIT

-65.4

231

668

5,442

Profit for the period

-99.6

102

25,366

29,132

incl attributed to Owners of the Company

-99.5

133

25,374

29,129

During the reporting quarter 79.2% (Q1 2017: 91.9%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 20.8% (Q1 2017: 8.1%) of the consolidated sales volume. In August 2017, AS Stera Saue opened new production hall and warehouses in the Allika Industrial Park owned by AS Harju Elekter, which has increased sales revenue from the Real Estate Segment for the comparable period. The sales revenue of Unallocated activities has increased by 3.9 million euros to 4.8 million euros in the quarterly comparison, of which electrical installation work comprised 71.3% (Telesilta Oy acquired in June 2017).

Sales revenue increased for the comparable period for all products and services. The biggest contribution to the 8.5 million growth came from greater sales volumes of electrical equipment within 52.6% and new electrical installation works within 40.2%, added to the services of the Group in 2017. Sales of electrical equipment increased by 4.5 million euros to 19.8 million euros in comparison with the quarter.

The Group’s sales revenue earned outside Estonia accounted for 89.1% in Q1 2018 (Q1 2017: 77.4%) increasing by 9.6 million to 23.2 million euros.

The Group’s largest market is Finland. Compared to the reference period, sale to the Finnish market has grown by 54.1% or 6.3 million euros to 18.0 million euros. The main reason for the growth was the contracts concluded with Finnish grid companies at the end of the years 2016 and 2017. Telesilta Oy, acquired in June 2017, also made a significant contribution to the growth of the Finnish market. In the reporting quarter, 69.1% of the Group’s products and services (Q1 2017: 66.5%) were sold on the Finnish market.

Compared to Q1 2017, the sales revenue to Swedish market has doubled, to 2.0 million euros. The growth came from Group’s and AS Harju Elekter Elektrotehnika purposeful work to increase market share in Sweden and combining new companies to the Group. AS Harju Elekter Elektrotehnika participation in several tenders resulted a 3-year frame agreement to deliver substations to E.ON Energidistribution AB. The deliveries of substation will start in Q2.

In the reporting quarter, the Lithuanian subsidiary Rifas UAB continued to increase its order volumes from Norway. Compared to Q1 2017, deliveries to the Norwegian market increased threefold to 2.0 million euros, accounting for 8.0% of consolidated sales revenue (Q1 2017: 4.0%).

Sales from other markets were majority earned from Austria, Denmark and the Netherlands.

Due to the low level of investment in the energy distribution sector, sales to the Estonian market in the first quarter decreased by 28.8% to 2.8 million euros and accounted for 10.9% of the consolidated sales revenue of the reporting quarter.

Operating expenses increased by 52.9%, i.e. 8.9 million euros in the reporting quarter compared to the reference period. The main reason for the upsurge in costs was the increase in the cost of sales by 7.8 million euros in Q1 2018 compared to Q1 2017, exceeding the growth rate of sales revenue, while at the same time decreasing the gross profit margin by 2.3 percentage point compared to the reference period. Labour costs increased by 53.5% up to 5.6 million euros. The rate of labour costs accounted for 21.7% of the reporting quarter sales revenue, decreasing by 0.7 percentage points for the comparable period. The Group’s distribution costs increased by 45.9% and the rate of distribution costs accounted for 4.5% of the sales revenue in the reporting quarter (Q1 2017: 4.5%). Administrative expenses increased by 0.7 million euros in the reporting quarter. The Group has incurred expenditures on the preparation of new procurements and completing the acquisition of new subsidiaries in 2018. Besides that, the exponential rise in the volume of specific orders has brought with it the need to hire additional specialists. All this has grown the rate of administrative expenses to revenue to 7.4% in Q1 2018 (Q1 2017: 6.7%). The growth in administrative expenses is mainly due to the increase in development costs.

In Q1 2018, an average of 679 employees worked in the Group, which was 189 people more than in the comparable period. At the end of the reporting period, there were 699 people working in the Group, which was 182 persons more than a year earlier. Including with the acquisition of SEBAB AB and Grytek AB, 45 employees were added to the Group. In the reporting quarter, 4,375 (Q1 2017: 2,616) thousand euros were paid to the employees as salaries and fees. The growth of salary cost was due to hiring new employees related to the significant increase in production volumes and the acquisition of new Swedish subsidiaries. In the reporting quarter, the average monthly salary per employee of the Group was 2,147 euros, an average increase of 367 euros.

In the reporting quarter, the gross profit of the Group was 3,344 (Q1 2017: 2,670) thousand euros. The gross profit margin was 12.9% (Q1 2017: 15.2%). The decline in profitability was caused by wage pressure of employees due to overall economic health and in the comparison of quarters, the price of raw material, above all sheet metal, has increased, which also raised the level of cost of sales.

In the reporting quarter, the Group’s operating profit was 231 (Q1 2017: 668) thousand euros and EBITDA 849 (Q1 2017: 1,050) thousand euros. Return of sales for the reporting quarter was 0.9% (Q1 2017: 3.8%) and return of sales before depreciation 3.3% (Q1 2017: 6.0%).

The profit before taxes for the reporting quarter was 229 (Q1 2017: 25,505) thousand euros. The calculated income tax expense of three months was 127 (Q1 2017: 139) thousand euros.

In Q1, several Group companies were influenced by the lower than expected volume of orders due to seasonality, being the main cause of the decline in profitability. Preparations for new procurements continue, leading to higher development costs, and several professionals have been hired.

In the reporting quarter, the consolidated net profit was 102 (Q1 2017: 25,366) thousand euros, of which the share of the owners of the Company was 133 (Q1 2017: 25,374) thousand euros. EPS in the Q1 2018 was 0.01 euros (Q1 2017: 1.43 euros). The consolidated net profit without extraordinary income of the Q1 2017 (the result of one-time financial income from the sale of the PKC Group Oyj shares in amount of 24,839 thousand euros) was 527 thousand euros.

In Q1 2018, the Group has made a total of 2.3 (Q1 2017: 1.7) million euros worth of investments to fixed assets, incl. acquisitions through business combinations amounted to 1.0 (Q1 2017: 0.4) million euros. Investment growth is related to the ongoing developments of Allika Industrial Park as well as investments into the production.

During Q1 2018, Harju Elekter’s share in Nasdaq Tallinn increased by 24.8% from 5.00 euros up to 6.24 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-3/2018

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,31.03.2018
Unaudited
EUR’000
ASSETS 31.03.18 31.12.17
Cash and cash equivalents 3,778 10,992
Available-for-sale financial assets 9,845 9,935
Trade receivables and other receivables 19,540 13,575
Prepayments 1,289 1,118
Prepaid income tax 236 56
Inventories 18,248 13,037
TOTAL CURRENT ASSETS 52,936 48,713
Deferred income tax asset 56 56
Other long-term financial investments 4,696 4,684
Investment property 18,374 17,881
Property, plant and equipment 12,359 11,983
Intangible assets 7,477 6,660
TOTAL NON-CURRENT ASSETS 42,962 41,264
TOTAL ASSETS 95,898 89,977
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 2,500 625
Advances from customers 1,518 1,088
Trade payables and other payables 16,368 12,802
Tax liabilities 2,806 2,106
Income tax liabilities 11 270
Short-term provision 49 245
TOTAL CURRENT LIABILITIES 23,252 17,136
NON-CURRENT LIABILITIES 2,720 2,910
TOTAL LIABILITIES 25,972 20,046
Share capital 11,176 11,176
Share premium 804 804
Restricted reserves 2,737 2,844
Retained earnings 55,181 55,048
TOTAL OWNERS’ EQUITY 69,898 69,872
Non-controlling interests 28 59
TOTAL EQUITY 69,926 69,931
TOTAL LIABILITIES AND OWNERS’ EQUITY 95,898 89,977
CONSOLIDATED INCOME STATEMENT,  1-3/2018
Unaudited
EUR’000 Q1 2018 Q1 2017
Revenue 25,986 17,519
Cost of goods sold -22,642 -14,849
Gross profit 3,344 2,670
Distribution costs -1,161 -796
Administrative expenses -1,930 -1,182
Other income 14 2
Other expenses -36 -26
Operating profit 231 668
Finance income 102 24,846
Finance costs -104 -9
Profit from normal operations 229 25,505
Corporate income tax -127 -139
Profit for the period, attributable to 102 25,366
   owners of the Company 133 25,374
   non-controlling interests -31 -8
Basic earnings per share  (EUR) 0.01 1.43
Diluted earnings per share  (EUR) 0.01 1.43

Tiit Atso
CFO
+372 674 7400

Audited annual report 2017

AS Harju Elekter presents its consolidated audited Annual Report for 2017 together with Independent Auditors’ Report. The same is available on NASDAQ Tallinn web site, as well on issuer’s home page www.harjuelekter.ee

Consolidated sales revenue for the reporting year reached 102.4 million euros, the consolidated operating profit was 5.4 million euros and consolidated net profit 29.1 million euros.

Audited financial results for the year 2017 and yearbook have been included as attachments to this announcement.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

Annual Report 2017

Year Book 2017

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

AS Harju Elekter notice of AGM

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 3 May 2018, beginning at 10 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2017.

To approve the annual report of AS Harju Elekter of 2017, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 89,977 thousand euros as of 31.12.2017, while the sales revenue of the financial year was 102,402 thousand euros and net profit 29,132 thousand euros.

2. Approval to profit distribution.

To approve the profit distribution proposal of AS Harju Elekter of 2017 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2017 25,919,289 euros
total net profit of the financial year  29,128,985 euros
total retained profit on 31.12.2017 55,048,274 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,24 euros per share*)  4,257,571 euros
balance carried forward after profit distribution 50,790,703 euros

The dividends will be paid to the shareholders on 22 May 2018 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 17 May 2018 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 16.05.2018. From that date the new owner of the shares is not entitled to dividends for the year 2017.

3. Appointment and remuneration of auditors

To appoint AS PricewaterhouseCoopers, register code 10142876 to perform the audit of AS Harju Elekter on the years 2018-2020. Consent obtained. The auditor will be remunerated according to the agreement.

4. Approval of the stock option programme

To approve the stock option program of Harju Elekter (hereinafter: Option Program) on the following basic terms and conditions:

1.   The purpose of the Option Program is to engage the key persons of enterprises belonging to the same group as Harju Elekter, incl. the members of the governing bodies, leading specialists and engineers, as shareholders of AS Harju Elekter, to motivate them to act in the name of achieving better economic outcomes for Harju Elekter, thereby ensuring the business development of AS Harju Elekter and involving additional funds in the equity of AS Harju Elekter, and therefore increasing the value of the shares of AS Harju Elekter.

2.   As part of the Option Program, AS Harju Elekter issues stock options each year in the amount of up to two per cent (2%) of the total number of the shares of AS Harju Elekter. The term of the Option Program is 3 (three) years, to which the term of realising the stock options is added.

3.   The circle of entitled persons in the Option Program is determined with a decision of the Supervisory Board of AS Harju Elekter based on the proposal of the Management Board of AS Harju Elekter.

4.   AS Harju Elekter notifies the entitled persons, referred to in Clause 3 of the Management Board decision, in writing.

5.   A person entitled to a stock option is given access to a maximum of 10,000 (ten thousand) stock options each year. Each stock option grants the right to acquire 1 (one) ordinary share of AS Harju Elekter.

6.   Persons entitled to take part in the Option Program have the right to acquire shares according to the terms and conditions specified in the option agreement concluded with them. Application of the terms and conditions of the Option Program and the procedure for the realisation of the stock option is established in the option agreement. The precise terms and conditions of the option agreement are established by the Supervisory Board of AS Harju Elekter and the agreements are concluded by the Management Board of AS Harju Elekter.

7.   Option agreements are concluded with the entitled persons in the first two weeks of June.

8.   With the aim of avoiding uncovered subscriptions, the entitled person must pay a contractual fee of ten euro cents (0.10 euros) for each stock option by the day of the conclusion of the option contract. The contractual fee is formalised as an interest-free loan to AS Harju Elekter and is accounted in the realisation of the stock options as part of the initial payment and returned if the stock options are not realised. If the entitled person has not concluded an option agreement within the time period specified in Clause 7, they shall lose the right to acquire the stock options allocated to them.

9.   The person entitled to the Stock Option has the right to realise the issued stock options within a three-year-period following the conclusion of the option agreement with them.

10.  The issue price of the shares acquired with the stock option is the average closing price as at 31 December on the NASDAQ Tallinn for the 3 (three) calendar years preceding the conclusion of the option agreement.

11.  In the case of the realisation of the stock options, the entitled person shall be obligated to pay for the shares of AS Harju Elekter in the amount of their issue price according to the option agreement concluded with them.

12.  A prerequisite for realising the stock options is that the persons entitled to the stock option have a current employment or professional relationship with a company belonging to the same group as Harju Elekter.

13.  A person entitled to the stock option does not have the right to transfer, pledge or in other way encumber or dispose of the stock options and they are not inheritable.

14.  In order to meet the conditions of the stock option in issuing new shares, they give the shareholder the right to receive dividends starting from the financial years when the shares were issued, given that the list of the persons entitled to dividends has not been established before the shares are issued.

15.  The general meeting of the shareholders of AS Harju Elekter gives the Supervisory Board of AS Harju Elekter the authorisation to issue the share options without the decision of the general meeting of the shareholders of AS Harju Elekter for each instance, given that the share options and the option agreements concluded to issue them are fully compliant with these terms and conditions.

16. In order to fulfil the terms and conditions of the Stock Option and realise the Stock Options, new shares are issued and the pre-emptive subscription rights of current shareholders is precluded based on §345 (1) of the Commercial Code.

The shareholders whose shares represent at least 1/20 of the share capital may request the inclusion of additional issues to the agenda of the general meeting, provided that the respective request has been submitted in writing no later than by 18 April 2018. The shareholders whose shares represent at least 1/20 of the share capital may submit a written draft of the resolution in respect to each item on the agenda no later than by 30 April 2018. More detailed information available on §287 of the Commercial Code (right of shareholder to information), §293 (2) (right to demand the inclusion of additional issues in the agenda) and §293’ (3) (obligation to submit simultaneously with the request on the modification of the agenda a draft of the resolution or substantiation) and §293’ (4) (right to submit a draft of the resolution in respect to each item on the agenda) about the rules and term of exercising these rights have been published on the homepage of AS Harju Elekter at www.harjuelekter.ee. The drafts of the resolutions and substantiations submitted by the shareholders will be published on the same homepage, if any are received. After the items on the agenda of the general meeting, including additional issues, have been discussed, the shareholders can ask for information from the management board about the activity of the public limited company.

The annual report of 2017, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Str. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed on 26 April 2018 as of the end of the business day in the accounting system. Registration of the participants starts on 3 May 2018 at 9 a.m.

Please submit the following documents to register the participants of the general meeting: a shareholder that is a natural person – personal identification document; a representative of a shareholder that is a natural person – personal identification document and a written letter of authorisation; a legal representative of a shareholder that is a legal person – an extract of the relevant (commercial) register in which the legal person is registered, and the personal identification document of the representative; a transactional representative of a shareholder that is a legal person is also required to submit a written authorisation issued by the legal representative of the legal person in addition to the above listed documents.

We ask the documents of a legal person registered in a foreign country to be legalised or having an apostil attached to the documents beforehand, unless specified otherwise in an international agreement. AS Harju Elekter may register a shareholder that is a legal person from a foreign country to the general meeting also in case all required information on the legal person and its representative are included in a notarised letter of authorisation issued in the foreign country and the respective letter of authorisation is accepted in Estonia. We ask you to present a passport or an ID-card as a personal identification document.

A shareholder may inform of the appointment of a representative or withdrawal of an authorisation given to a representative before the general meeting by e-mail on yldkoosolek@he.ee or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 2 May 2018 to the secretariat of AS Harju Elekter at Paldiski Str 31 (3rd floor) in Keila.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group won Elektrilevi tender

AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, won a tender for the supply of 250 Kw prefabricated substations to Estonia. Elektrilevi OÜ, the largest grid company in Estonia, made an announcement on the winner of the tender, based on which totally 2.25 million euros amounted in the 5-year contract period. According to plans, the terms and conditions of the contract will be specified and the framework contract will be concluded in March.

Last year, 3,000 substations were produced in the Harju Elekter Group’s factories. In order to cover the volume of commissions without any issues, AS Harju Elekter Elektrotehnika’s production capacities were increased last year, directing the operations of the subsidiary to the new production halls at Keila Industrial Park.

Elektrilevi OÜ supplies electricity to almost all households and companies in Estonia, having 475,000 clients across Estonia. The company’s role as a network operator is to ensure the constant supply of electricity to its customers. Elektrilevi maintains and repaires almost 61,000 kilometres of power lines and more than 24,000 substations.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 700 specialists, and the year 2017 sales revenue of the Group was 102.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-12/2017

For Harju Elekter Group, Q4 and 2017 as a whole both turned out to be full of changes and extremely successful. The large volume contracts concluded at the end of 2016 and the additional sales orders brought record sales revenue and the biggest profits in history. As discussed with the Supervisory Board, the Management Board proposes to pay 4.3 million euros (0.24 euros per share) in dividends to shareholders, which amounted 100% of the reporting year net profit of regular activities.

Change

January-December

Change

October – December

(thousand euros)

%

2017

2016

%

2017

2016

Sales revenue

67.8

102,668

61,167

75.6

28,818

16,408

Gross profit

50.8

15,625

10,361

83.1

4,570

2,496

EBITDA

58.8

7,587

4,777

62.3

2,345

894

EBIT

71.1

5,442

3,181

88.3

1,404

487

Profit for the period

803.6

29,132

3,224

52.3

946

375

incl attributed to Owners of the Company

804.9

29,129

3,219

64.5

976

369

Profit for the period without extraordinary income

33.2

4,293

3,224

Consolidated revenue for the reporting quarter was 28.8 (Q4 2016: 16.4) million euros, increasing by 75.6% in relation to the comparable period. The Group’s revenue for 12-month was 102.7 (2016: 61.2) million euros, increasing by 67.8% in relation to the comparable period. The main reason for the high growth was the contracts concluded at the end of 2016 and the orders for supplying of specialised pre-fabricated substations to USA in January 2017. In the third quarter, by the acquisition of Telesilta Oy an electrical installation service was added, accounting for 14.6% of the Group’s sales revenue in the reporting quarter and 7.7% in the reporting year.

During the reporting quarter 76.1% (Q4 2016: 91.2%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 23.9% (Q4 2016: 8.8%) of the consolidated sales volume. Over the year, the sales of the Manufacturing segment increased by 29.6 million euros to 85.4 million euros, of which 97.1% was from the sale of electrical equipment. The decrease in Real Estate segment sales was caused by PKC Group Oyj ceasing its production activities in Estonia and leaving from the Group’s rental premises at the beginning of 2017. The available production spaces were taken into use by AS Harju Elekter Elektrotehnika in Q4 2017. In August, AS Stera Saue opened new production hall and warehouse in the Allika Industrial Park owned by AS Harju Elekter. Rental income reflected in the Group’s revenue as well as in income of Real Estate segment from the third quarter. The inclusion since Q3 of the financial indicators of Finnish company Telesilta OY, acquired in June, brought with it a growth in the sales revenue for Unallocated activities during the accounting quarter, as well as the accounting year. Electrical installation works comprised 66.0% among Unallocated activities sales revenue during the accounting quarter and 51.8% in the 12-month period accounting and 27.3% and 35.0% from the intermediate sale of electrical products due to the acquisition of Energo Veritas OÜ.

The Group’s sales revenue earned outside Estonia accounted for 85.8% in Q4 2017 (Q4 2016: 75.4%) and 84.0% in 2017 (2016: 78.1%).

Finland continues as the largest market of the Group. In the reporting quarter, 75.6% of the Group’s products and services (Q4 2016: 62.2%) were sold on the Finnish market, growing over the year by 11.6 million euros, i.e. 113.6%. Comparing the reporting 12 months, the increase was 34.0 million euros up to 75.0 million euros, accounting for 73.0% (2016: 67.0%) of the consolidated sales revenue. The main reason for the growth was the contracts concluded with Finnish network companies at the end of 2016, whose orders began in Q1 of 2017. The acquisition of the new subsidiary Telesilta Oy also made a significant contribution to the growth of the Finnish market, increasing Group’s sales revenue by 12.9% year-on-year.

Sales to the Norwegian market doubled to 5.9 million euros a year, accounting for 5.7% of consolidated sales revenue. The main reason for the growth was the increase in the order volumes of the Lithuanian subsidiary Rifas UAB in the Norwegian market. Sales on the Swedish market increased by 0.6 million euros up to 2.7 million euros during the 12-month period.

Sales on the Estonian market grew also. In 2017, sales on the Estonian market increased by 22.7% up to 16.4 million euros, accounting for 16.0% of the consolidated sales revenue. In Q4, sales on the Estonian market increased by 1.6% up to 4.1 million euros, accounting for 14.2% of the consolidated sales revenue of the reporting quarter.

In 2017, the operating expenses have increased at the same pace with the increase in sales revenue. Operating expenses increased 72.3%, i.e. 11.5 million euros in the reporting quarter compared to the reference period and in a year-on-year comparison, by 67.6% i.e. 39.2 million euros. The main reason for the upsurge in costs was the increase in the cost of sales: quarter to quarter by 74.3% i.e 10.3 million euros and by 71.3% i.e 36.2 million euros y-o-y. The distribution costs and administrative expenses increased totally by 1.1 million euros up to 3.1 million euros in the reporting quarter and by 3.0 million euros up to 10.1 million euros during the year. Both, the rate of distribution costs and the rate of administrative expenses are in decline and accounted for 4.6% (Q4 2016: 5.0%) and 6.3% (Q4 2016: 7.1%) of the sales revenue in the reporting quarte respectively. In 12-month period, the rate of distribution costs as well as the rate of administrative expenses decreased by 1 percentage point, being 4.0% and 5.8% respectively. The exponential rise in the volume of specific orders has brought with it the need to hire additional specialists, which was accompanied by training and new job preparation costs. In the last quarter, the Group has incurred expenditures on the preparation of new procurements and the acquisition of new subsidiaries in 2018.

At the end of the reporting period, there were 630 people working in the Group, which was 150 persons more than a year earlier, including with the acquisition of Telesilta Oy and Energo Veritas OÜ, added 42 employees to the Group. In Q4 2017, an average of 620 (Q4 2017: 467) employees worked in the Group. In year-on-year comparison, an average of 567 employees worked in the Group, which was on average 112 people more than in the reference period. In the reporting quarter, 4,127 (Q4 2016: 3,167) thousand euros were paid to the employees as salaries and fees, totally 14,073 (2016: 10,597) thousand euros during the year. The growth of wages was due to hiring new employees related to the significant increase in production volumes, being still lower from the growth of sales revenue (67.8%). In connection with good economic results, performance pay for 2017 and the reserves created at the end of the year have also increased. In 2017, the average monthly salary per employee of the Group was 2,067 euros, an average increase of 76 euros. The increase in the average salary was influenced by an increase in the share of Finnish employees in the Group as Finland has a significantly higher wage level than in Estonia and Lithuania. Labour costs increased by 51.6% up to 5.6 million euros in Q4, and by 38.9% up to 18.7 million euros during the year. The rate of labour costs accounted for 18.2% of the reporting year sales revenue, decreasing by 3.8 percentage points compared to the reference period.

In the reporting quarter, the gross profit of the Group was 4,570 (Q4 2016: 2,496) thousand euros. The gross profit margin was 15.9% (Q4 2016: 15.2%). In the reporting year, the gross profit of the Group was 15,625 (2016: 10,361) thousand euros. The gross profit margin was 15.2% (2016: 16.9%).

In the reporting quarter, the Group’s operating profit was 1,404 (Q4 2016: 487) thousand euros and EBITDA 2,345 (Q4 2016: 894) thousand euros. Return of sales for the reporting quarter was 4.9% (Q4 2016: 3.0%) and return of sales before depreciation 8.1% (Q4 2016: 5.5%).

The Group’s operating profit of 2017 was 5,442 (2016: 3,181) thousand euros and EBITDA 7,587 (2016: 4,777) thousand euros. Return of sales for the reporting 12-month period was 5.3% (2016: 5.2%) and return of sales before depreciation was 7.4% (2016: 7.8%). Return of sales has decreased due to less rental income as PKC Group Oyj moved out from the Group’s rental premises in the beginning of 2017 and the increase in global commodity prices. European sheet metal producers raised their prices in the first half of the year, affecting the cost of sales of the Group. Also, the non-recurrent expenses occurred in AS Harju Elekter Elektrotehnika, resulting from moving to new production facilities, had effect on return of sales.

In the reporting quarter, the consolidated net profit was 946 (Q4 2016: 375) thousand euros, of which the share of the owners of the Company was 976 (Q4 2016: 369) thousand euros. EPS in the Q4 2017 was 0.06 euros (Q4 2016: 0.02 euros).

Overall, the consolidated net profit of the year 2017 was 29,132 (2016: 3,224) thousand euros. The share of the owners of the Company was 29,129 (2016: 3,219) thousand euros. EPS was 1.64 (2016: 0.18) euros. Large net profit was the result of one-time financial income from the sale of the PKC Group Oyj shares in amount of 24,839 thousand euros. Profit for the period without extraordinary income was 4,293 (2016: 3,224) thousand euros and EPS 0.24 (2016: 0.18) euro.

In 2017, the Group has made a total of 7.3 (2017: 4.8) million euros. Investment growth is related to the ongoing developments of Allika Industrial Park as well as investments into the production.

Cash and cash equivalents increased by 7.7 million euros to 11.0 million euros in the reporting year and decreased by 2.4 million euros to 3.3 million euros in the comparable period.

During the year 2017, Harju Elekter’s share in Nasdaq Tallinn increased by 75.4% from 2.85 euros up to 5.00 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2017

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,31.12.2017
Unaudited
EUR’000
ASSETS 31.12.17 31.12.16
Cash and cash equivalents 10 992 3 278
Available-for-sale financial assets 9 935 0
Trade receivables and other receivables 13 575 8 480
Prepayments 1 118 771
Prepaid income tax 56 24
Inventories 13 037 9 712
TOTAL CURRENT ASSETS 48 713 22 265
Deferred income tax asset 56 37
Other long-term financial investments 4 684 21 990
Investment property 17 881 13 273
Property, plant and equipment 11 983 10 972
Intangible assets 6 660 5 431
TOTAL NON-CURRENT ASSETS 41 264 51 703
TOTAL ASSETS 89 977 73 968
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 625 804
Advances from customers 1 088 9 140
Trade payables and other payables 12 802 1 242
Payables to shareholders 0 1 075
Tax liabilities 2 106 133
Income tax liabilities 270 15
Short-term provision 245 12 409
TOTAL CURRENT LIABILITIES 17 136 1 167
NON-CURRENT LIABILITIES 2 910 13 576
TOTAL LIABILITIES 20 046 12 418
Share capital 11 176 -1 242
Share premium 804 804
Restricted reserves 2 844 19 214
Retained earnings 55 048 29 113
TOTAL OWNERS’ EQUITY 69 872 60 307
Non-controlling interests 59 85
TOTAL EQUITY 69 931 60 392
TOTAL LIABILITIES AND OWNERS’ EQUITY 89 977 73 968
CONSOLIDATED INCOME STATEMENT,  1-12/2017
Unaudited
EUR’000 Q4 2017 Q4 2016 2017 2016
Revenue 28 818 16 408 102 668 61 167
Cost of goods sold -24 248 -13 912 -87 043 -50 806
Gross profit 4 570 2 496 15 625 10 361
Distribution costs -1 325 -818 -4 132 -3 034
Administrative expenses -1 820 -1 165 -5 981 -4 138
Other income 10 10 50 76
Other expenses -31 -36 -120 -84
Operating profit 1 404 487 5 442 3 181
Finance income 20 6 24 869 775
Finance costs -190 -7 -96 -24
Profit from normal operations 1 234 486 30 215 3 932
Corporate income tax -288 -111 -1 083 -708
Profit for the period, attributable to 946 375 29 132 3 224
   owners of the Company 976 369 29 129 3 219
   non-controlling interests -30 6 3 5
Basic earnings per share  (EUR) 0,06 0,02 1,64 0,18
Diluted earnings per share  (EUR) 0,06 0,02 1,64 0,18

Tiit Atso
CFO
+372 674 7400

Harju Elekter Group won an important tender in Sweden

AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, won a tender for the supply of substations in Sweden. E.ON Energidistribution AB, largest distribution network enterprise in Sweden, made a public announcement yesterday on the winner of the tender, based on which more than 2,000 substations will be supplied to Sweden in the 3-year contract period. The terms and conditions as well as the volume of the contract will be specified in February and the framework contract is planned to be concluded in March.

Last year, 3,000 substations were produced in the Harju Elekter Group’s factories in Estonia and Finland. This year, we are expecting a growth in the production and sales of substations in both Sweden and Finland. In order to cover the volume of commissions without any issues, AS Harju Elekter Elektrotehnika’s production capacities were increased last year, directing the operations of the subsidiary to the new production halls at Keila Industrial Park.

E.ON Energidistribution AB is the largest electricity distribution company in Sweden, with more than 44 000 substation in its electricity network. Countrywide, E.ON Energidistribution AB provides electricity to over 1 000 000 private and corporate customers Sweden. Its Parent company, E.ON is an international privately-owned energy supplier which is focused on renewables, energy networks and customer solutions, which are the building blocks of the new energy world.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 700 specialists, and 9 months sales revenue of the Group was 74 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter’s subsidiary won an important tender in Finland

On 18 January 2018, AS Harju Elekter Elektrotehnika, an Estonian subsidiary of AS Harju Elekter, signed a contract with Caruna Oy, owner of the largest electrical grid in Finland, to supply low-voltage cable distribution cabinets and metering cabinets to them in the course of 2+1+1 years. According to estimates by Caruna, the expected volume of the contract is at least 5 million euros.

Harju Elekter Group already has valid contracts in place with the Caruna Group to supply pre-fabricated substations, due to which the production of substations in the Group’s factories in Estonia and Finland has grown from the annual 1000 substations to 3000 substations in a single year. In order to cover the volume of commissions without any issues, Harju Elekter Elektrotehnika’s production capacities were increased last year, directing the operations of the subsidiary to the new production halls at Keila Industrial Park.

Caruna is the largest company in Finland dedicated to the transmission of electricity. Countrywide, Caruna holds a market share of about 20 per cent of local electricity transmission and provide electricity to 650,000 private and corporate customers in South, Southwest and West Finland, as well as in the city of Joensuu, the sub-region of Koillismaa and the Satakunta region.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 700 specialists, and 9 months sales revenue of the Group was 74 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

Additional information: Jan Osa, Managing Director of AS Harju Elekter Elektrotehnika, phone +372 674 7449.

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Changes to the management boards of Harju Elekter’s Finnish subsidiaries

As of 1 January 2018, Rainer Nurkkala, the current Sales Manager, was named the Managing Director of Harju Elekter’s Finnish subsidiary Satmatic Oy, and Maire Korppi, the current Sales Manager, was named the Managing Director of Finnkumu Oy.

The long-time Managing Director of Satmatic Oy, Simo Puustelli, will continue as the Chairman of the Management Board at Harju Elekter’s Finnish subsidiaries: Satmatic Oy, Finnkumu Oy, Telesilta Oy; and the Managing Director of Harju Elekter Kiinteistöt Oy. The current long-time Managing Director of Finnkumu Oy, Matti Ollila, will continue as a Member of Finnkumu’s Management Board.

Rainer Timo Nurkkala (born 13.10.1959) is a graduate of Tampere University of Technology, with a specialty in IT (2005); and the Georgia Institute of Technology (Atlanta, USA), with a Master of Science in Management of Technology (2002). He has been employed at Satmatic Oy since 2009. Mr Nurkkala does not own Harju Elekter shares.

Maire Korpi (born 13.10.1959) is a graduate of Vaasa University of Applied, with a specialty in engineering (2005). She has been employed at Finnkumu Oy since 2004. Mrs Korpi does not own Harju Elekter shares.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ nearly 700 specialists, and 9 months sales revenue of the Group was 74 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Publication of financial reports in 2018

AS Harju Elekter wishes to the shareholders Happy Holiday Season and informs you that in the year 2018, the consolidated financial results of AS Harju Elekter will be published as following:

2017 4Q results                      28.02.2018
2018 1Q results                      25.04.2018
AGM                                              3.05.2018
2018 2Q results                      25.07.2018
2018 3Q results                      24.10.2018

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter purchases SEBAB AB

On 12 December 2017, AS Harju Elekter signed a contract to acquire all of the shares of Swedish company SEBAB AB, a provider of sales and technical solutions, and its subsidiary Grytek AB, a manufacturer of pre-fabricated technical buildings, from the company Tnåa AB. The transaction price for the two companies was 3.6 million euros (SEK 36.0 million), of which 3.0 million euros (SEK 30.1 million) will be paid on 8 January 2018, the date of entry into force of the transaction, with the delayed part of payment being payable in accordance with the agreement. The acquired companies will initially continue to use their names and trademarks, operating as 100% subsidiaries of the Group.

Harju Elekter Group has been active on the Swedish market since 2010, delivering substations and industrial automation solutions to Swedish clients. As a result of this transaction, new prospective market segments will be entered in Sweden, and the Group’s product portfolio will be expanded. Concurrently, Harju Elekter Group’s capability to offer its Swedish clients more complete technical solutions and turn-key projects as well as service support will increase.

Andres Allikmäe, Tiit Atso (CFO) and Thomas Andersson were appointed as Members of the Management Board of SEBAB AB as well as Grytek AB. Thomas Andersson will continue as a CEO of SEBAB AB and Grytek AB.

SEBAB AB, financial summary 2014-2016

thousand SEK (1 SEK = 0,099 EUR) 2014 2015 2016
Cash and cash equivalents 3,496 1,828 6,809
Trade receivables 22,177 32,100 26,115
Inventories 7,745 7,515 9,054
Non-current assets 846 678 1,719
Total assets 34,264 42,121 43,697
Liabilities 14,822 20,834 19,228
Equity 19,442 21,287 24,469
   incl.share capital 120 120 120
Sales revenue 91,109 80,394 90,749
EBIT 3,895 5,232
Net profit 3,139 2,877 1,628
Basic earnings per share (SEK) 3,139 2,877 1,628
Number of shares 1,000 1,000 1,000
Dividend per share (SEK) 0.0 0.0 0.0

Since the end of the previous financial year there are no significant changes in the SEBAB AB’s business activities. According to Stock Exchange Rules and Regulations, the company Grytek AB, which is a part of the transaction, is insignificant.

We confirm that there are no valid contracts between Group’s enterprises and the acquired companies SEBAB AB and Grytek AB, and those have no loans or any court or arbitration proceedings involving the commercial undertaking, which could significantly impact the economic activity of the company.

The financial results of SEBAB AB and Grytek AB will be included in the consolidated reports of Harju Elekter as of 1 January 2018.

SEBAB AB is a marketing and engineering company for MV/LV power and distribution solutions for the construction, infrastructure and renewable energy sector. The company is headquartered in Malmö with its sales, production, warehouse and service units. Company’s branch offices, offering technical solutions, are also located in Stockholm, Borlänge and elsewhere in Sweden. Grytek AB is a producer of technical buildings. In 2016, turnover of the companies amounted to 12.0 million euros in total.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate.

After the transaction, the following 100% subsidiaries are included to Harju Elekter Group: Harju Elekter AB, SEBAB AB and Grytek AB in Sweden, AS Harju Elekter, AS Harju Elekter Elektrotehnika, AS Harju Elekter Teletehnika and Energo Veritas OÜ (81%) in Estonia, Satmatic Oy, Finnkumu Oy, Telesilta Oy and Harju Elekter Kiinteistöt Oy in Finland as well as Rifas UAB and Automatikos Iranga UAB (67%) in Lithuania. In addition, AS Harju Elekter have financial investment in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in Estonian startup company Skeleton Technologies Group OÜ (10%).

Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 600 specialists, and the Group’s 9 months 2017 revenue amounted 74 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

According to the Rules and Regulations of Nasdaq Tallinn, this is not a transaction between related parties.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

Additional information: Tiit Atso, CFO and Member of the Management Board of AS Harju Elekter (+372 674 7400).

Correction: Harju Elekter purchases SEBAB AB

Correction: operating profit of SEK 5,288 thousand was added into the table of SEBAB AB’s financial summary for 2014.

On 12 December 2017, AS Harju Elekter signed a contract to acquire all of the shares of Swedish company SEBAB AB, a provider of sales and technical solutions, and its subsidiary Grytek AB, a manufacturer of pre-fabricated technical buildings, from the company Tnåa AB. The transaction price for the two companies was 3.6 million euros (SEK 36.0 million), of which 3.0 million euros (SEK 30.1 million) will be paid on 8 January 2018, the date of entry into force of the transaction, with the delayed part of payment being payable in accordance with the agreement. The acquired companies will initially continue to use their names and trademarks, operating as 100% subsidiaries of the Group.

Harju Elekter Group has been active on the Swedish market since 2010, delivering substations and industrial automation solutions to Swedish clients. As a result of this transaction, new prospective market segments will be entered in Sweden, and the Group’s product portfolio will be expanded. Concurrently, Harju Elekter Group’s capability to offer its Swedish clients more complete technical solutions and turn-key projects as well as service support will increase.

Andres Allikmäe, Tiit Atso (CFO) and Thomas Andersson were appointed as Members of the Management Board of SEBAB AB as well as Grytek AB. Thomas Andersson will continue as a CEO of SEBAB AB and Grytek AB.

SEBAB AB, financial summary 2014-2016

thousand SEK (1 SEK = 0,099 EUR) 2014 2015 2016
Cash and cash equivalents 3,496 1,828 6,809
Trade receivables 22,177 32,100 26,115
Inventories 7,745 7,515 9,054
Non-current assets 846 678 1,719
Total assets 34,264 42,121 43,697
Liabilities 14,822 20,834 19,228
Equity 19,442 21,287 24,469
   incl.share capital 120 120 120
Sales revenue 91,109 80,394 90,749
EBIT 5,288 3,895 5,232
Net profit 3,139 2,877 1,628
Basic earnings per share (SEK) 3,139 2,877 1,628
Number of shares 1,000 1,000 1,000
Dividend per share (SEK) 0.0 0.0 0.0

Since the end of the previous financial year there are no significant changes in the SEBAB AB’s business activities. According to Stock Exchange Rules and Regulations, the company Grytek AB, which is a part of the transaction, is insignificant.

We confirm that there are no valid contracts between Group’s enterprises and the acquired companies SEBAB AB and Grytek AB, and those have no loans or any court or arbitration proceedings involving the commercial undertaking, which could significantly impact the economic activity of the company.

The financial results of SEBAB AB and Grytek AB will be included in the consolidated reports of Harju Elekter as of 1 January 2018.

SEBAB AB is a marketing and engineering company for MV/LV power and distribution solutions for the construction, infrastructure and renewable energy sector. The company is headquartered in Malmö with its sales, production, warehouse and service units. Company’s branch offices, offering technical solutions, are also located in Stockholm, Borlänge and elsewhere in Sweden. Grytek AB is a producer of technical buildings. In 2016, turnover of the companies amounted to 12.0 million euros in total.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate.

After the transaction, the following 100% subsidiaries are included to Harju Elekter Group: Harju Elekter AB, SEBAB AB and Grytek AB in Sweden, AS Harju Elekter, AS Harju Elekter Elektrotehnika, AS Harju Elekter Teletehnika and Energo Veritas OÜ (81%) in Estonia, Satmatic Oy, Finnkumu Oy, Telesilta Oy and Harju Elekter Kiinteistöt Oy in Finland as well as Rifas UAB and Automatikos Iranga UAB (67%) in Lithuania. In addition, AS Harju Elekter have financial investment in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in Estonian startup company Skeleton Technologies Group OÜ (10%).

Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 600 specialists, and the Group’s 9 months 2017 revenue amounted 74 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

According to the Rules and Regulations of Nasdaq Tallinn, this is not a transaction between related parties.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

Additional information: Tiit Atso, CFO and Member of the Management Board of AS Harju Elekter (+372 674 7400).

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter signed a Letter of Intent for the acquisition of all shares of SEBAB AB

AS Harju Elekter signed a Letter of Intent for the acquisition of all shares in Swedish company SEBAB AB offering sales and technical solutions. To clarify and agree on a fair price, a due diligence process will be initiated. The transaction is scheduled to be completed no later than January 1, 2018.

SEBAB AB is a marketing and engineering company for MV/LV power and distribution solutions for the construction, infrastructure and renewable energy sector. The company is headquartered in Malmö with its sales, production, warehouse and service units. Company’s branch offices, offering technical solutions, are also located in Stockholm, Borlänge and elsewhere in Sweden. The transaction also includes the acquisition of a 100% stake in the sister company, Grytek AB, producer of technical houses. In 2016, turnover of the companies amounted to 12.0 million euros in total.

Harju Elekter Group has been active on the Swedish market since 2011, delivering substations and industrial automation solutions to Swedish clients. As a result of the cooperation, new prospective market segments are being entered into in Sweden, and the Group’s product portfolio will be expanded – the capability of Harju Elekter in offering its Swedish clients more complete technical solutions and turn-key projects as well service support will increase. Successful negotiations may lead to the acquisition of the company’s shares.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The core business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 600 specialists, and the Group’s 9 months 2017 revenue amounted 74 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

Tiit Atso
Member of the Management Board
+372 6747 400

Additional information: Mr Endel Palla, Chairman of the Supervisory Board of AS Harju Elekter (+372 674 7400).

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Changes in AS Harju Elekter subsidiary’s management board

Supervisory Board of AS Harju Elekter Teletehnika decided on its meeting held on 27 October 2017 to appoint Alvar Sass the Chairman of the Management Board of the company as of 13 November 2017. Alvar Sass as a new member of the Management Board and CEO of AS Harju Elekter Teletehnika will be responsible for general administration of the company. Starting from 13 November 2017 the Management Board of AS Harju Elekter Teletehnika will continue with two members – Andre Koit and Alvar Sass.

Since 2006 Alvar Sass has been working for the metal processing company Radius Machining OÜ, from 2012 as CEO. Participation in the management bodies of business organisations: Radius Space OÜ, member of the Management Board; Vientitec OÜ, member of the Management Board. Alvar Sass owns 6,903 of Harju Elekter shares.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 600 specialists, and 9 months sales revenue of the Group was 74 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-9/2017

The first 9m-period as well as the reporting quarter were successful for the Harju Elekter Group. The large agreements and purchase orders concluded at the end of the year 2016 increased the sales revenues as well as the operating profit of the Group. The acquisition of subsidiaries Energo Veritas OÜ and Telesilta Oy in 2017 had an impact, resulting in an increase in sales volumes and economic results.

Change

January – September

Change

July – September

Year

(thousand euros)

%

2017

2016

%

2017

2016

2016

Sales revenue

65.0

73,850

44,759

97.7

31,228

15,794

61,167

Gross profit

40.8

11,055

7,852

74.1

4,580

2,630

10,348

EBITDA

34.9

5,241

3,883

68.0

2,347

1,397

4,777

EBIT

49.8

4,037

2,694

87.2

1,915

1,023

3,181

Profit for the period

889.4

28,186

2,849

106.7

1,798

870

3,224

incl attributed to Owners of the Company

888.0

28,153

2,849

108.6

1,798

862

3,219

Consolidated revenue for the reporting quarter was 31.2 (Q3 2016: 15.8) million euros, increasing 97.7% in relation to the comparable period. With the Q3 acquisition of Telesilta Oy a service providing electrical installation works was added, resulting in an 11.8% increase in the Group’s sales revenue during the reporting quarter. The Group’s revenue for nine months was 73.9 (9m 2016: 44.8) million euros, increasing 65% in relation to the comparable period. The main reason for the high growth was the contracts concluded at the end of 2016.

During the reporting quarter 86.0% (Q3 2016: 91.2%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 14.0% (Q3 2016: 8.8%) of the consolidated sales volume. The sale of electrical equipment provides more than 97% of the sales volume of the Manufacturing segment. Sales revenue of Real Estate segment has decreased due to PKC Group Oyj stopped production in Estonia and moved out from the Group’s rental premises in the beginning of 2017. Released production halles took into use by AS Harju Elekter Elektrotehnika. Since Q3, financial results of Telesilta Oy, an electrical engineering company specializing in electrical contracting for the shipbuilding industry acquired in June, was added, which increased sales revenue for other Unallocated activities during the reporting quarter as well as in 9 months. In August, AS Stera Saue opened new production hall and warehouse in the Allika Industrial Park, owned by AS Harju Elekter. Rental income reflected in the Group’s revenue as well as in income of Real estate segment from beginning of the reporting quarter.

The Group’s sales revenue earned outside Estonia accounted for 88.7% in Q3 2017 (Q3 2016: 81.2%) and 83.3% in 9m 2017 (9m 2016: 79.1%).

Finland continues as the largest market of the Group. In the reporting quarter, 78.0% of the Group’s products and services (Q3 2016: 68.8%) were sold on the Finnish market, growing over the year by 13.5 million euros, i.e. 124.4%. Comparing the reporting 9-months periods, the increase was 72.7%, i.e. 22.4 million euros up to 53.2 million euros, accounting for 72.0% (9m 2016: 68.8%) of the consolidated sales revenue. The main reason for the growth were the contracts concluded with Finnish network companies at the end of 2016, whose orders already began in Q1 of 2017.

Growing the sales volume on the Swedish market is a continuous priority of the Group and AS Harju Elekter Elektrotehnika. Comparing to the same periods last year, the growth of sales to the Swedish market in the reporting quarter was 14.0%, i.e. up to 0.6 million euros and in nine months 40.7%, i.e. up to 2.2 million euros. The growth of sales to the Norwegian market in 9-months period was doubled up to 3.5 million euros, accounting for 4.7% of the consolidated sales revenue.

Operating expenses increased by 98.0% or 14.5 million euros in the third quarter and 65.7% or 27.7 million euros in 9-months compared to the reference period. The main part of operating expenses comprised the cost of sales, which grew faster than the sales revenue. Increased export has also led to a rise in distribution costs, growing by 39.6% in the reporting quarter and 26.7% in 9-months in respect to the comparable periods. Still, the rate of distribution costs dropped, accounting for 3.2% of the sales revenue of the reporting quarter (Q3 2016: 4.6%) and 3.8% in 9 months (9m 2016: 5.0%). Due to large orders and the development of new products in relation to this, new employees were hired, leading to an increase in the development costs and hence also in administrative expenses. Altogether, the rate of administrative expenses to revenue dropped and made 5.3% in the reporting quarter and 5.6% in 9-months, having decreased by 0.5 and 1.0 pp, respectively, compared to the reference periods.

In Q3 2017, an average of 618 employees worked in the Group, which was 171 people more than in the comparable period. In 9-months period, an average of 550 employees worked in the Group, which was 99 people more than in the reference period. At the end of the reporting quarter, there were 624 people working in the Group, which was 170 persons more than a year earlier. Including 42 employees, joined to the Group with purchasing of Telesilta Oy and Energo Veritas OÜ. From the beginning of the year, the number of employees increased by 144 people. In the reporting quarter, the employees were paid as salaries and fees 4,020 (Q3 2016: 2,722) thousand euros, which was 47.7% higher than in the reference period. During 9-months, the employees were paid 9,945 (9m 2016: 7,430) thousand euros, being 33.8% more than in the reference period. The growth of wages was due to hiring new employees related to the significant increase in production volumes, being lower from the growth of sales revenue (65%). The average monthly salary for an employee of the Group was 2,010 (9m 2016: 1,829) euros, having increased by 9.9%. The increase in the average wage was influenced by the increase in the share of Finnish employees in the Group as Finland has a significantly higher wage level than in Estonia and Lithuania.

In the reporting quarter, the gross profit of the Group was 4,580 (Q3 2016: 2,630) thousand euros. The gross profit margin was 14.7% (Q3 2016: 16.7%). In 9-months, the gross profit of the Group was 11,055 (9m 2016: 7,852) thousand euros. The gross profit margin was 15.0% (9m 2016: 17.5%).

The Group’s operating profit in the reporting quarter was 1,915 (Q3 2016: 1,023) thousand euros and EBITDA 2,347 (Q3 2016: 1,397) thousand euros. Return of sales for the reporting quarter was 6.1% (Q3 2016: 6.5%) and return of sales before depreciation 7.5% (Q3 2016: 8.8%).

The operating profit of the Group in the 9-months period was 4,037 (9m 2016: 2,694) thousand euros and the EBITDA was 5,241 (9m 2016: 3,883) thousand euros. Return of sales for the reporting period was 5.5% (9m 2016: 6.0%) and return of sales before depreciation was 7.1% (9m 2016: 8.7%). Return of sales has decreased due to less rental income as PKC Group Oyj moved out from the Group’s rental premises in the beginning of 2017 as well as the global price appreciation of raw materials. Also, the non-recurrent expenses occurred in AS Harju Elekter Elektrotehnika, resulting from moving to new production facilities, has effect on return of sales.

In the reporting quarter, the consolidated net profit was 1,798 (Q3 2016: 870) thousand euros, of which the share of the owners of the Company was 1 798(Q3 2016: 862) thousand euros. EPS in the Q3 2017 was 0.10 euros (Q3 2016: 0.05 euros).

Overall, the consolidated net profit of the 9m 2017 was 28,187 (9m 2016: 2,849) thousand euros. The share of the owners of the Company was 28,154 (9m 2016: 2,850) thousand euros. EPS was 1.59 (9m 2016: 0.16) 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 nine months’ period, the Group has made a total of 7.2 (9m 2016: 1.4) million euros, incl. acquisitions through business combinations amounted to 1.7 million euros, worth of investments to fixed assets. Investment growth is related to the ongoing developments of Allika Industrial Park as well as investments into the production.

During the 9m period, Harju Elekter’s share in Nasdaq Tallinn increased by 57.2% from 2.85 euros up to 4.45 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-9/2017

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,30.09.2017
Unaudited
EUR’000
ASSETS 30.09.17 31.12.16
Cash and cash equivalents 13 271 3 278
Available-for-sale financial assets 5 116 0
Trade receivables and other receivables 17 769 8 480
Prepayments 1 097 771
Prepaid income tax 113 24
Inventories 13 224 9 712
TOTAL CURRENT ASSETS 50 590 22 265
Deferred income tax asset 37 37
Other long-term financial investments 4 684 21 990
Investment property 15 983 13 273
Property, plant and equipment 12 598 10 972
Intangible assets 7 033 5 431
TOTAL NON-CURRENT ASSETS 40 335 51 703
TOTAL ASSETS 90 925 73 968
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 92 804
Advances from customers 1 177 9 140
Trade payables and other payables 14 468 1 242
Payables to shareholders 0 1 075
Tax liabilities 2 724 133
Income tax liabilities 320 15
Short-term provision 145 12 409
TOTAL CURRENT LIABILITIES 18 926 1 167
NON-CURRENT LIABILITIES 3 014 13 576
TOTAL LIABILITIES 21 940 12 418
Share capital 11 176 -1 242
Share premium 804 804
Restricted reserves 2 846 19 214
Retained earnings 54 070 29 113
TOTAL OWNERS’ EQUITY 68 896 60 307
Non-controlling interests 89 85
TOTAL EQUITY 68 985 60 392
TOTAL LIABILITIES AND OWNERS’ EQUITY 90 925 73 968
CONSOLIDATED INCOME STATEMENT,  1-9/2017
Unaudited
EUR’000 Q3 2017 Q3 2016 9m 2017 9m 2016
Revenue 31 228 15 794 73 850 44 759
Cost of goods sold -26 648 -13 164 -62 795 -36 907
Gross profit 4 580 2 630 11 055 7 852
Distribution costs -983 -704 -2 807 -2 216
Administrative expenses -1 658 -922 -4 162 -2 973
Other income 9 31 39 83
Other expenses -33 -12 -88 -52
Operating profit 1 915 1 023 4 037 2 694
Finance income 120 2 24 966 769
Finance costs -7 -6 -23 -17
Profit from normal operations 2 028 1 019 28 980 3 446
Corporate income tax -230 -149 -794 -597
Profit for the period, attributable to 1 798 870 28 186 2 849
   owners of the Company 1 798 862 28 153 2 850
   non-controlling interests 0 8 33 -1
Basic earnings per share  (EUR) 0,10 0,05 1,59 0,16
Diluted earnings per share  (EUR) 0,10 0,05 1,59 0,16

Tiit Atso
CFO
+372 674 7400

Termination of the contract of service of the managing director of a subsidiary

The managing director of AS Harju Elekter Teletehnika, Mr. Urmas Paisnik, CEO as well as member of the management board, will be leaving his post from 1 October 2017. The Management Board of the company will continue with one member, Mr. Andre Koit.

AS Harju Elekter and AS Harju Elekter Teletehnika are grateful for the contribution that Mr. Urmas Paisnik, as a CEO and member of the Management Board of AS Harju Elekter Teletehnika, has made to the development of the company.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Commencement of negotiations

AS Harju Elekter started negotiations with the Swedish company SEBAB AB, a marketing and engineering company for MV/LV power and distribution solutions for the construction, infrastructure and renewable energy sector. The company is headquartered in Malmö with its sales, production, warehouse and service units. Company’s branch offices, offering technical solutions, are also located in Stockholm, Borlänge and elsewhere in Sweden. In 2016, the company’s turnover amounted to 12.0 million euros.

Harju Elekter Group has been active on the Swedish market since 2011, delivering substations and industrial automation solutions to Swedish clients. As a result of the cooperation, new prospective market segments are being entered into in Sweden, and the Group’s product portfolio will be expanded – the capability of Harju Elekter in offering its Swedish clients more complete technical solutions and turn-key projects as well service support will increase. Successful negotiations may lead to the acquisition of the company’s shares.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 600 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Termination of the contract of service of the managing director of a subsidiary

The managing director of Rifas UAB, Mr. Aidas Setikas, the head of the Group’s Lithuanian subsidiary, will be leaving his post. Since 1 August 2017, the tasks and responsibilities of the head of the subsidiary as CEO assumed by the CBDO of Rifas UAB, Mr. Tomas Prusas.

Mr. Prusas is a graduate of the Kaunas University of Technology in the field of electronics engineering and management (2001) and of the Vilnius University International Business School in business administration and international trade (2006). He has worked in the Harju Elekter Group as the CBDO since 2014.

AS Harju Elekter and Rifas UAB are grateful for the contribution that Mr. Aidas Setikas, as a managing director of Rifas UAB, has made to the development of the company.

Andres Allikmäe
Chairman of the Board/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-6/2017

The first half of the year was successful for the Harju Elekter Group. The large agreements and purchase orders concluded at the end of the year increased the sales revenues as well as the operating profit of the Group. Extraordinary revenue from the realisation of PKC Group Oyj shares resulted in a considerable increase in net profit and provided strong cash flow for prospective investments.

Change

January – June

Change

April – June

Year

(thousand euros)

%

2017

2016

%

2017

2016

2016

Sales revenue

47.2

42,622

28,965

45.9

25,102

17,208

61,167

Gross profit

24.0

6,476

5,222

20.7

3,805

3,153

10,348

EBITDA

16.3

2,894

2,486

8.1

1,844

1,706

4,777

EBIT

26.9

2,123

1,671

13.6

1,455

1,281

3,181

Profit for the period

1 233.5

26,389

1,979

-38.7

1,023

1,668

3,224

incl attributed to Owners of the Company

1 225.9

26,356

1,988

-40.9

982

1,664

3,219

Consolidated revenue for the reporting quarter was 25.1 (Q2 2016: 17.2) million euros, increasing 45.9% in relation to the comparable period. The Group’s revenue for six months was 42.6 (H1 2016: 29.0) million euros, increasing 47.2% in relation to the comparable period. The main reason for the high growth were the contracts concluded at the end of 2016.

During the reporting quarter 89% (Q2 2016: 93%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 11% (Q2 2016: 7%) of the consolidated sales volume. The sale of electrical equipment provides more than 96% of the sales volume of the Manufacturing segment. In the reporting quarter the sale of electrical equipment has increased by 6.5 million euros up to 21.6 million euros and in six months’ period by 12.0 up to 37.0 million euros.

The Group’s sales revenue earned outside Estonia accounted for 80.8% in Q2 2017 (Q2 2016: 80.9%) and 79.4% in H1 2017 (H1 2016: 78.0%).

Finland continues as the largest market of the Group. In the reporting quarter, 68.3% of the Group’s products and services (Q2 2016: 71.8%) were sold on the Finnish market, growing over the year by 4.8 million euros, i.e. 38.9%. Comparing the reporting half years, the increase was 45.8%, i.e. 9.1 million euros up to 28.8 million euros, accounting for 67.6% (H1 2016: 68.2%) of the consolidated sales revenue. The main reason for the growth were the contracts concluded with Finnish network companies at the end of 2016, whose orders already began in Q1 of 2017.

The Group has also increased the sales on the Norwegian market. The growth of sales to the Norwegian market in the reporting quarter was 1.5 million euros and in H1 1.8 million euros, compared to reference periods.

Growing the sales volume on the Swedish market is a continuous priority of the Group and AS Harju Elekter Elektrotehnika. The growth of sales to the Swedish market in the reporting quarter was 0.4 million euros and in H1 0.6 million euros, compared to the same periods last year.

Also sales on the Estonian market grew by 46.6%, i.e. 1.5 million euros, to 4.8 million euros in the reporting quarter, accounting for 19.2% of the consolidated sales revenue of the reporting quarter. In H1 2017, sales on the Estonian market grew by 37.9%, i.e. 2.4 million euros, up to 8.8 million euros, accounting for 20.6% of the consolidated sales revenue.

Operating expenses increased by 48.3% or 7.7 million euros in the second quarter and 48.2% or 13.2 million euros in a half-year compared to the reference period. The main part of operating expenses comprised the cost of sales, which grew faster than the sales revenue. The main reason was the global price appreciation of raw materials, but hiring an additional workforce as well. Increased export has also led to a rise in distribution costs, growing by 30.3% in the reporting quarter and 20.6% in the half-year in respect to the comparable period. Still, the rate of distribution costs dropped, accounting for 4.1% of the sales revenue of the reporting quarter (Q2 2016: 4.6%) and 4.3% in 6 months (H1 2016: 5.2%). Due to large orders and the development of new products in relation to this, new employees were hired, leading to an increase in the development costs and hence also in administrative expenses. Altogether, the rate of administrative expenses to revenue dropped and made 5.3% in the reporting quarter and 5.9% in the half-year, having decreased by 1.1 and 1.2 pp, respectively, compared to the reference periods.

In Q2 2017, an average of 542 employees worked in the Group, which was 88 people more than in the comparable period. In H1 2017, an average of 516 employees worked in the Group, which was 62 people more than in the reference period. At the end of the reporting period, there were 585 people working in the Group, which was 112 persons more than a year earlier. From the beginning of the year, the number of employees increased by 102 people. In the reporting quarter, the employees were paid as salaries and fees 3,308 (Q2 2016: 2,781) thousand euros, which was 19.0% higher than in the reference period. The H1 2017, the employees were paid 5,925 (H1 2016: 5,155) thousand euros, being 14.9% more than in the reference period. The growth of wages was due to hiring new employees related to the significant increase in production volumes. The average monthly salary for an employee of the Group was 1,914 (H1 2016: 1,894) euros, having increased by 1.1%.

In the reporting quarter the gross profit of the Group was 3,805 (Q2 2016: 3,153) thousand euros. The gross profit margin was 15.2% (Q2 2016: 18.3%). In H1 the gross profit of the Group was 6,476 (H1 2016: 5,222) thousand euros. The gross profit margin was 15.2% (H1 2016: 18.0%).

The Group’s operating profit in the reporting quarter was 1,455 (Q2 2016: 1,281) thousand euros and EBITDA 1,844 (Q2 2016: 1,706) thousand euros. Return of sales for the reporting quarter was 5.8% (Q2 2016: 7.4%) and return of sales before depreciation 7.3% (Q2 2016: 9.9%).

The operating profit of the Group in the first half year was 2,123 (H1 2016: 1,671) thousand euros and the EBITDA was 2,894 (H1 2016: 2,486) thousand euros. Return of sales for the reporting period was 5.0% (H1 2016: 5.8%) and return of sales before depreciation was 6.8% (H1 2016: 8.6%). Return of sales has decreased due to less rental income as PKC Group Oyj moved out from the Group’s rental premises in the beginning of 2017. Also, the non-recurrent expenses occurred in AS Harju Elekter Elektrotehnika, resulting from moving to new production facilities, has effect on return of sales.

In the reporting quarter, the consolidated net profit was 1,023 (Q2 2016: 1,668) thousand euros, of which the share of the owners of the Company was 982 (Q2 2016: 1,664) thousand euros. EPS in the Q2 2017 was 0.06 euros (Q2 2016: 0.09 euros). The decrease in net profit is related to PKC Group Oyj dividends of 766 thousand euros received in Q2 2016.

Overall, the consolidated net profit of the H1 2017 was 26,389 (H1 2016: 1,979) thousand euros. The share of the owners of the Company was 26,356 (H1 2016: 1,988) thousand euros. In H1, EPS was 1,49 (H1 2016: 0.11) 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 three months’ period, the Group has made a total of 4.5 (H1 2016: 0.5) million euros worth of investments to property, plant and equipment and investment properties. Investment growth is related to the ongoing developments of Allika Industrial Park.

During the 6m period, Harju Elekter’s share in Nasdaq Tallinn increased by 46.6% from 2.83 euros up to 4.15 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-6/2017

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,30.06.2017
Unaudited
EUR’000
ASSETS 30.06.17 31.12.16
Cash and cash equivalents 17 598 3 278
Trade receivables and other receivables 16 113 8 480
Prepayments 1 372 771
Prepaid income tax 73 24
Inventories 14 771 9 712
TOTAL CURRENT ASSETS 49 927 22 265
Deferred income tax asset 37 37
Other long-term financial investments 4 684 21 990
Investment property 15 934 13 273
Property, plant and equipment 11 301 10 972
Intangible assets 6 119 5 431
TOTAL NON-CURRENT ASSETS 38 075 51 703
TOTAL ASSETS 88 002 73 968
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 178 804
Advances from customers 1 402 9 140
Trade payables and other payables 13 379 1 242
Payables to shareholders 0 1 075
Tax liabilities 2 567 133
Income tax liabilities 193 15
Short-term provision 81 12 409
TOTAL CURRENT LIABILITIES 17 800 1 167
NON-CURRENT LIABILITIES 3 014 13 576
TOTAL LIABILITIES 20 814 12 418
Share capital 11 176 -1 242
Share premium 804 804
Restricted reserves 2 847 19 214
Retained earnings 52 272 29 113
TOTAL OWNERS’ EQUITY 67 099 60 307
Non-controlling interests 89 85
TOTAL EQUITY 67 188 60 392
TOTAL LIABILITIES AND OWNERS’ EQUITY 88 002 73 968
CONSOLIDATED INCOME STATEMENT,  1-6/2017
Unaudited
EUR’000 Q2 2017 Q2 2016 6m 2017 6m 2016
Revenue 25 102 17 208 42 622 28 965
Cost of goods sold -21 297 -14 055 -36 146 -23 743
Gross profit 3 805 3 153 6 476 5 222
Distribution costs -1 028 -789 -1 824 -1 512
Administrative expenses -1 322 -1 104 -2 504 -2 051
Other income 28 42 30 52
Other expenses -28 -21 -55 -40
Operating profit 1 455 1 281 2 123 1 671
Finance income 0 766 24 846 767
Finance costs -7 -5 -16 -11
Profit from normal operations 1 448 2 042 26 953 2 427
Corporate income tax -425 -374 -564 -448
Profit for the period, attributable to 1 023 1 668 26 389 1 979
   owners of the Company 982 1 664 26 356 1 988
   non-controlling interests 41 4 33 -9
Basic earnings per share  (EUR) 0,06 0,09 1,49 0,11
Diluted earnings per share  (EUR) 0,06 0,09 1,49 0,11

Tiit Atso
CFO
+372 674 7400

Harju Elekter purchased Telesilta Oy

On 2 June 2017, AS Harju Elekter signed a contract for the purchase of all shares in Telesilta Oy, an electrical engineering company specializing in electrical contracting for the shipbuilding industry. After the transaction, Telesilta Oy will continue to operate under its own name and brand as a wholly-owned subsidiary of the Group. The purchase will provide new knowledge and skills in manufacture and installation of the electrical and automation equipment for ships, and opens the door to the promising Finnish shipbuilding sector.

The transaction was completed on the date of signing, when monetary settlements were also made. According to the agreement and as the transaction is not significant according to the Stock Exchange Rules, the parties will not disclose the value of the transaction.

Simo Puustelli was appointed Chairman and Andres Allikmäe, Tiit Atso, Pertti Vuorinen and Kari Laulajainen were appointed as Members of the Management Board of Telesilta Oy. Kari Laulajainen will continue as a Managing Director of Telesilta Oy.

The financial indicators of Telesilta Oy will be included in consolidated reports of Harju Elekter as of 1 July 2017.

Telesilta Oy is an electrical engineering company established in 1978, located in Uusikaupunki, Finland. The company specializes in electrical contracting for the shipbuilding industry – everything from planning to installation, implementation and service. The annual sales revenue of the company was 4.5 million euros in 2016, and the company employs 30 people.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a well-known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 500 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

This is not a transaction between related parties according to the Rules and Regulations of Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Management Board/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Commencement of negotiations

AS Harju Elekter announces that the Group has started negotiations with Telesilta Oy. The cooperation will provide new knowledge and skills in ship electrical and automation equipment manufacture and installation, and opens the door to the promising shipbuilding sector. Successful negotiations may lead to the acquisition of the company’s shares.

Telesilta Oy is an electrical engineering company established in 1978, located in Uusikaupunki, Finland. The company specializes in electrical contracting for the shipbuilding industry – everything from planning to installation, implementation and service.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 500 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Extension of the authorisations of the Chairman of the Management Board

At its meeting on 3 May 2017, the Supervisory Board of Harju Elekter extended the authorisations of the Chairman of the Management Board, Andres Allikmäe, starting from 4 May 2017 for the next 3 years. Management Board members Tiit Atso and Aron Kuhi-Thalfeldt will continue to serve under their effective authorisations until 31 October 2019.

At the same time, the members of the Supervisory Board appointed former Chairman Endel Palla, as the Chairman of the Supervisory Board and Andres Toome as the Vice Chairman, elected from among the members by the General Meeting of Shareholders on 27 April 2017. Supervisory Board members Andres Toome and Triinu Tombak will continue as members of the Audit Committee.

Tiit Atso
Member of the Management Board
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

AGM resolutions

Today, on 27 April 2017 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 97 shareholders and their authorised representatives who represented the total of 12,980,332 votes accounting for 73.17 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2016;
2. Approval to profit distribution;
3. Extension of the authorisation of Supervisory board members, electing new Supervisory board members;
4. Approval of the remuneration of the Supervisory Board

1. Approval to AS Harju Elekter annual report of the year 2016

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2016, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 73,968 thousand euros as of 31.12.2016, while the sales revenue of the financial year was 61,167 thousand euros and net profit 3,224 thousand euros.

The number of the votes given in favor of the resolution was 12,980,332 which accounted for 100.0 % of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2016 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2016 25,894,937 euros
total net profit of the financial year  3,218,644 euros
total retained profit on 31.12.2016 29,113,581 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,18 euros per share*)  3,193,178 euros
balance carried forward after profit distribution 25,920,403 euros

The dividends will be paid to the shareholders on 16 May 2017 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 11 May 2017 at 23.59 shall be entitled to dividend.

The number of the votes given in favor of the resolution was 12,943,720 which accounted for 99.72 % of the voted participants.

3. Extension of the authorisation of Supervisory board members, electing new Supervisory board members

The general meeting resolved:
3.1  Extend the authorisation of Supervisory board members Endel Palla, Triinu Tombak, Andres Toome and Aare Kirsme for another five years, until 03.05.2022. Consents obtained.

The number of the votes given in favor of the resolution was 12,971,293 which accounted for 99.93 % of the voted participants.

The general meeting resolved:
3.2  Elect Arvi Hamburg as a new member of the Supervisory board starting from 04.05.2017, with authorisation valid for five years, until 03.05.2022. Consent obtained.

The number of the votes given in favor of the resolution was 12,941,562 which accounted for 99.70 % of the voted participants.

4. Approval of the remuneration of the Supervisory Board

The general meeting resolved:
To determine the remuneration of the Supervisory Board member of the company in the amount of 1000 euros per month and the remuneration of the chairman of the Supervisory Board in the amount of 1,600 euros per month. Establish remuneration of 200 euros to the supervisory board members for participating in the meeting. No remuneration is paid if the supervisory board member participates in the meeting by phone. To apply a valid bonus system of the company to the member of the supervisory board who is working in executive management.

The number of the votes given in favor of the resolution was 12,579,833 which accounted for 96.91 % of the voted participants.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-3/2017

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

Harju Elekter purchased a majority holding in Energo Veritas

AS Harju Elekter purchased an 80.5% holding in Energo Veritas OÜ, a company trading in electrical materials and equipment. The transaction was completed as at 29 March 2017, when monetary settlements were also made. According to the agreement and based on the fact that the transaction is not relevant for the purpose of the Stock Exchange Rules, the parties will not disclose the value of the transaction. After the transaction, the business operations of AS Harju Elekter Trade Group will be merged with Energo Veritas OÜ, who will continue as a subsidiary of the Group.

With the purchase of Energo Veritas OÜ and establishment of a trade unit operating as a subsidiary of the Group, the Group increases its market share in Estonia, notably expands its offered product range, and creates prerequisites for boosting the sale of the Group’s products in Estonia and the Baltic states. The company focuses primarily on project-based trading activity.

The former manager of the company, Kristo Reinhold, will continue as the head of the Group’s new subsidiary, Energo Veritas OÜ. The following persons were appointed to the Supervisory board of the company: Chairman of the Management Board of AS Harju Elekter Mr Andres Allikmäe, Member of the Management Board of AS Harju Elekter Mr Tiit Atso and Sales Director of AS Harju Elekter Elektrotehnika Mr Tiit Luman.

Energo Veritas OÜ is a company, established in 2015 and based on local capital, trading in electrical materials and equipment, offering technical advice, solution development and kitting in accordance with the client’s wishes as well as deliveries to construction sites. The company’s largest suppliers are most of the manufacturers of electrical materials or their representatives; the company also imports several products. The turnover of the company was 4.2 million euros in 2016, and the company employs 7 people.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 500 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ Tallinn’s Rules and Regulations.

Andres Allikmäe
Chairman of the Management Board/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

AS Harju Elekter notice of AGM

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 27 April 2017, beginning at 10 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2016.
To approve the annual report of AS Harju Elekter of 2016, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 73,968 thousand euros as of 31.12.2016, while the sales revenue of the financial year was 61,167 thousand euros and net profit 3,224 thousand euros.

2. Approval to profit distribution.
To approve the profit distribution proposal of AS Harju Elekter of 2016 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2016 25,894,937 euros
total net profit of the financial year  3,218,644 euros
total retained profit on 31.12.2016 29,113,581 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,18 euros per share*)  3,193,178 euros
balance carried forward after profit distribution 25,920,403 euros

The dividends will be paid to the shareholders on 16 May 2017 by a transfer to the bank account of the shareholder.
* The shareholders registered in the shareholders’ registry on 11 May 2017 at 23.59 shall be entitled to dividend.

3. Extension of the authorisation of Supervisory board members, electing new Supervisory board members
Extend the authorisation of Supervisory board members Endel Palla, Triinu Tombak, Andres Toome and Aare Kirsme for another five years, until 03.05.2022.

Elect Arvi Hamburg as a new member of the Supervisory board starting from 04.05.2017, with authorisation valid for five years, until 03.05.2022.

4. Approval of the remuneration of the Supervisory Board
To determine the remuneration of the Supervisory Board member of the company in the amount of 1000 euros per month and the remuneration of the chairman of the Supervisory Board in the amount of 1,600 euros per month. Establish remuneration of 200 euros to the supervisory board members for participating in the meeting. No remuneration is paid if the supervisory board member participates in the meeting by phone. To apply a valid bonus system of the company to the member of the supervisory board who is working in executive management.

The shareholders whose shares represent at least 1/20 of the share capital may request the inclusion of additional issues to the agenda of the general meeting, provided that the respective request has been submitted in writing no later than by 12 April 2017. The shareholders whose shares represent at least 1/20 of the share capital may submit a written draft of the resolution in respect to each item on the agenda no later than by 24 April 2017. More detailed information available on §287 of the Commercial Code (right of shareholder to information), §293 (2) (right to demand the inclusion of additional issues in the agenda) and §293’ (3) (obligation to submit simultaneously with the request on the modification of the agenda a draft of the resolution or substantiation) and §293’ (4) (right to submit a draft of the resolution in respect to each item on the agenda) about the rules and term of exercising these rights have been published on the homepage of AS Harju Elekter at www.harjuelekter.ee. The drafts of the resolutions and substantiations submitted by the shareholders will be published on the same homepage, if any are received. After the items on the agenda of the general meeting, including additional issues, have been discussed, the shareholders can ask for information from the management board about the activity of the public limited company.

The annual report of 2016, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Str. Since 3rd April 2017. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 20 April 2017. Registration of the participants starts on 27 April 2017 at 9 a.m.

Please submit the following documents to register the participants of the general meeting: a shareholder that is a natural person – personal identification document; a representative of a shareholder that is a natural person – personal identification document and a written letter of authorisation; a legal representative of a shareholder that is a legal person – an extract of the relevant (commercial) register in which the legal person is registered, and the personal identification document of the representative; a transactional representative of a shareholder that is a legal person is also required to submit a written authorisation issued by the legal representative of the legal person in addition to the above listed documents.

We ask the documents of a legal person registered in a foreign country to be legalised or having an apostil attached to the documents beforehand, unless specified otherwise in an international agreement. AS Harju Elekter may register a shareholder that is a legal person from a foreign country to the general meeting also in case all required information on the legal person and its representative are included in a notarised letter of authorisation issued in the foreign country and the respective letter of authorisation is accepted in Estonia. We ask you to present a passport or an ID-card as a personal identification document.

A shareholder may inform of the appointment of a representative or withdrawal of an authorisation given to a representative before the general meeting by e-mail on yldkoosolek@he.ee or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 26 April 2017 to the secretariat of AS Harju Elekter at Paldiski Str 31 (3rd floor) in Keila.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Audited annual report 2016

The Supervisory Board of AS Harju Elekter approved the audited financial results for the year 2016. The financial results remained unchanged, compared to the preliminary disclosure on 27th of February 2017.

Consolidated sales revenue for the reporting year reached 61.2 million euros, the consolidated operating profit as well as consolidated net profit were both 3.2 million euros.

Audited financial results for the year 2016 has been included as attachment to this announcement.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

Annual Report 2016

Year Book 2016

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

AS Harju Elekter accepted a takeover bid for shares of PKC Group Plc

At their meeting of 16 March 2017, the Supervisory Board of AS Harju Elekter decided to accept the offer by Motherson Sumi Systems Limited for the takeover of all the shares of PKC Group Plc at the price of EUR 23.55 per share. AS Harju Elekter owns 1,094,641 shares of PKC Group Plc. If the takeover is realised, it means that AS Harju Elekter will receive 25.8 million euros on 29 March 2017.

Motherson Sumi Systems Limited and PKC Group Plc have on January 19, 2017 entered into a combination agreement under which they agree to combine the wiring harness businesses of Motherson Sumi Systems Limited and PKC Group Plc. The period of the takeover bid is from 6 February 2017 to 21 March 2017.

AS Harju Elekter has been the shareholder of PKC Group Plc since the company’s founding in 1994.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-12/2016

2016 for the Harju Elekter Group was similar to the previous financial year. Thanks to new agreements and internal transformations, sales revenue increased by 9.2% in Q4, and operating profit multiplied, creating good prospects for a successful 2017.

In 2016, the Group’s consolidated revenue was 61.2 (2015: 60.7) million euros and operating profit 3.2 (2015: 3.3) million euros. The consolidated net profit of the year was 3.22 (2015: 3.18) million euros. Consolidated revenue for the reporting quarter was 16.4 (Q4 2015: 15.0) million euros, increasing during the reporting quarter by 9.2% or 1.4 million euros in relation to the comparable period. In the reporting quarter the sale of electric equipment had increased by 1.2 million euros up to 14.2, which was the main reason for the sales growth in the reporting quarter.

 

October-December

Change

January-December

Change

(thousand euros)

2016

2015

%

2016

2015

%

Sales revenue

16,408

15,030

9.2

61,167

60,656

0.8

Gross profit

2,496

2,079

20.1

10,348

10,299

0.5

EBITDA

895

498

79.7

4,777

4,819

-0.9

EBIT

487

79

517.8

3,181

3,276

-2.9

Profit for the period

375

-16

2,443.7

3,224

3,186

1.2

incl attributable to Owners of the Company

369

-8

4,712.5

3,219

3,190

0.9

During the reporting quarter 91% (Q4 2015: 91%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 9% (Q4 2015: 9%) of the consolidated sales volume. The sale of electrical equipment provides a major part (94%-95%) of the sales volume of the Manufacturing segment.

The Group’s sales revenue earned outside Estonia accounted for 78.1% in 2016 (2015: 76.6%) and in the reporting quarter 75.4% (Q4 2015: 76.8%).

Sales on the Estonian market grew by 15.4%, i.e. 0.5 million euros, to 4.0 million euros in the reporting quarter, accounting for 24.6% of the consolidated sales revenues of the reporting quarter. In 2016, the Group sold 21.9% (2015: 23.4%) of its products and services to the Estonian market. Year on year, supply to the Estonian market decreased by 0.8 million euros or 5.8%. The downturn is the result of the continued decline in investments in Estonia’s energy distribution sector.

At the same time, deliveries in the direction of Finland have grown 5.5% or 2.1 million euros in the reporting year; in the reporting quarter, however, the sales volume remained mostly on the level of the comparable period. Most of the Group’s enterprises have managed to grow their sales volumes on the Finnish market, as a result of which the share of the Finnish market in the Group’s sales revenue grew to 67% (2015: 64.1%).

In 2016, the Group continued active work in the direction of Sweden, both, in terms of sales as well as product development. Sales revenue earned from the Swedish market increased by 24.2% in Q4 and 47.3% in a year.

Due to low oil prices and a change in ownership in the main customer of our Lithuanian company, deliveries towards Norway decreased by 1 million euros or 26.1% in 12 months. The order volumes recovered somewhat in Q4, having increased by 0.5 million euros in the reporting quarter to 1.1 million euros, contributing 6.8% of the Group’s sales revenue in the last quarter.

Operating expenses decreased 6.7% or 1 million euros in the reporting quarter and 1.1% or 0.6 million euros in the 12 months compared to the reference periods. The main reason for the upsurge in costs was the increase in the cost of sales. Cost of sales increased by 1 million euros, i.e. 7.4% compared to Q4 of 2015 and in a year-on-year comparison, 0.5 million euros, i.e. 0.9%, lagging in the reporting quarter behind the 9.2% growth rate for sales revenue in the same period. In a year-on-year comparison, the cost of sales increased in an equivalent pace with sales revenue: 0.8%.

The continued focus of the Group towards increasing exports has led to a rise in distribution costs, growing by 18% in the reporting quarter and 14% during the year in respect to the comparable periods. In terms of distribution costs, labour costs have increased the most, both due to structural changes in the companies as well as due to payment of additional remuneration. The majority of the increase of distribution costs was contributed by the Group’s Finnish companies. The rate of distribution costs accounted for 5% of the sales revenue (2015: 4.4%). Administrative expenses decreased by 6.8% in the reporting quarter and 4.6% in 12m in relation to the comparison periods, and the rate of administrative expenses to revenue accounted for 6.8%, having decreased by 0.3 percentage points.

As at the balance day on 31 December, there were 480 people working in the Group, (31.12.2015: 470).  In 2016, an average of 455 employees worked in the Group, which is 17 people less than in the comparable period. In the reporting quarter, the average number of employees increased by 4, to 467. Until Q3 2016, the process of optimising production in the Group’s Estonian undertakings caused a decrease in the number of employees; however, after the conclusion of several large-scale sales contracts, the company has once again started to create new jobs. Recruitment of new employees on the labour market is complicated due to prevailing fierce competition and increasing salary pressure. To hire employees and retain the existing ones, a review of salary levels was commenced in Q4. Besides, the sound financial results of the Group’s companies in Finland in 2016 have resulted in the payment of additional remuneration and an increase in reserves, which also led to higher labour costs for the Group. In the reporting quarter, the employees were paid as salaries and fees 3,167 (Q4 2015: 2,439) thousand euros and during the year 10,597 (2015: 9,697) thousand euros. The average monthly salary for an employee of the Group was 1,940 (2016: 1,711) euros.

In the reporting quarter the gross profit of the Group was 2,496 (Q4 2014: 2,079) thousand euros. The gross profit margin was 15.2% (Q4 2015: 13.8%). In the 12-months period, the gross profit of the Group was 10,348 (2015: 10,299) thousand euros and the gross profit margin was 16.9% (Q4 2014: 17.0%). The Group’s gross profit margin was influenced by an increase in the global metal price in the last half-year.

The Group’s operating profit in the reporting quarter was 487 (Q4 2015: 79) thousand euros and EBITDA 895 (Q4 2015: 498) thousand euros. Return of sales for the accounting quarter was 3.0% (Q4 2015: 0.5%) and return of sales before depreciation 5.5% (Q4 2015: 3.3%). The Group’s operating profit in was 3,181 (2015: 3,276) thousand euros and EBITDA 4,777 (2015: 4,819) thousand euros. One of the reasons for the decline in operating profit was direct additional costs resulting from the merger of metal factories, totalling at 134,000 euros. In Q4, the merger of metal factories was completed, failures in production, caused by the moving and readjustment of machinery and equipment, have been eliminated and problems with adhering to delivery dates have been minimised. Return of sales was 5.2% (2015: 5.4%) and return of sales before depreciation was 7.8% (2015: 7.9%).

In the reporting quarter, the consolidated net profit was 375 (Q4 2015: -16) thousand euros, of which the share of the owners of the Company was 369 (Q4 2015: -8) thousand euros. EPS in the Q4 2016 was 0.02 euros and in Q4 2015 was 0.00 euros. The net margin was 2.3% (Q4 2015: -0.1%).

All in all, the consolidated net profit of the year 2016 was 3,224 (2015: 3,186) thousand euros. The share of the owners of the Company was 3,219 (2015: 3,190) thousand euros. EPS was 0.18 (2015: 0.18) euros.

In twelve months period, the Group has made a total of 4.6 (2015: 2.3) million euros worth of invest-ments to property, plant and equipment and investment properties, of which 3 million euros the Group invested to the production facilities at Allika Industrial Park.

Andres Allikmäe
Chairman of the Management Board / CEO
+372 674 7400

For more information:
Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2016

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET, 31.12.2016
Unaudited
EUR’000
ASSETS 31.12.2016 31.12.2015
Cash and cash equivalents 3 278 5 711
Trade receivables and other receivables 8 480 6 678
Prepayments 771 278
Prepaid income tax 24 28
Inventories 9 712 7 148
TOTAL CURRENT ASSETS 22 265 19 843
Deferred income tax asset 37 57
Other long-term financial investments 21 990 20 188
Investment property 13 273 12 990
Property, plant and equipment 10 972 8 010
Intangible assets 5 431 5 491
TOTAL NON-CURRENT ASSETS 51 703 46 736
TOTAL ASSETS 73 968 66 579
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 804 296
Trade payables and other payables 9 140 6 043
Payables to shareholders 1 242 0
Tax liabilities 1 075 944
Income tax liabilities 133 146
Short-term provision 15 34
TOTAL CURRENT LIABILITIES 12 409 7 463
NON-CURRENT LIABILITIES 1 167 912
TOTAL LIABILITIES 13 576 8 375
Share capital 12 418 12 418
Unregistered share capital -1 242 0
Share premium 804 804
Restricted reserves 19 214 18 047
Retained earnings 29 113 26 817
TOTAL OWNERS’ EQUITY 60 307 58 086
Non-controlling interests 85 118
TOTAL EQUITY 60 392 58 204
TOTAL LIABILITIES AND OWNERS’ EQUITY 73 968 66 579
CONSOLIDATED INCOME STATEMENT,  1-12/2016
Unaudited
EUR’000 Q4 2016 Q4 2015 2016 2015
Revenue 16 408 15 030 61 167 60 656
Cost of goods sold -13 912 -12 951 -50 819 -50 357
Gross profit 2 496 2 079 10 348 10 299
Distribution costs -818 -696 -3 034 -2 657
Administrative expenses -1 165 -1 249 -4 138 -4 337
Other income 10 4 93 70
Other expenses -36 -59 -88 -99
Operating profit 487 79 3 181 3 276
Finance income 6 48 775 835
Finance costs -7 -9 -24 -49
Profit from normal operations 486 118 3 932 4 062
Corporate income tax -111 -134 -708 -876
Profit for the period, attributable to 375 -16 3 224 3 186
   owners of the Company 369 -8 3 219 3 190
   non-controlling interests 6 -8 5 -4
Basic earnings per share  (EUR) 0,02 0,00 0,18 0,18
Diluted earnings per share  (EUR) 0,02 0,00 0,18 0,18

Tiit Atso
CFO
+372 674 7400

Motherson Sumi Systems made a takeover bid for shares of PKC Group

Motherson Sumi Systems Limited and PKC Group Plc have on January 19, 2017 entered into a combination agreement under which they agree to combine the wiring harness businesses of Motherson Sumi Systems Limited and PKC Group Plc. The offer price for PKC Group Plc shareholders is EUR 23.55 in cash for each share in PKC Group Plc.

AS Harju Elekter has been the shareholder of PKC Group Plc since 1994. On the balance date 31.12.2016, AS Harju Elekter owned 1,094,641 PKC Group Plc shares.

For more information: (http://www.pkcgroup.com/investors/stock-exchange-releases.html).

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

The payment related to reduction of the share capital

At 18 October 2016, the reduction of share capital of AS Harju Elekter on the basis adopted by resolution of the General Meeting of Shareholders held at 28 April 2016 was entered in the Commercial Register. The new amount of the registered share capital of the Company is 11,176,124.40 euros, which is divided into 17,739,880 ordinary shares without nominal value and with the calculated value of 0.63 euros per share.

The reduction of share capital in the amount of 1,241, 791.60 euros or 0.07 euros per share shall be paid to the shareholders three months after entry of the reduction of share capital in the commercial register, on 20th of January 2017.

The list of shareholders, who were entitled to receive the payment related to reduction of the share capital was closed on 12 May 2016 at 23:59.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

ADJUSTMENT: Large order received by Harju Elekter’s subsidiary

On 10 January 2017, AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, received two written orders for supplying total of 86 units of specialised pre-fabricated substations to Konecranes within a two-year period. Supplies are directed to the USA. By agreement, the total value of the transaction will not be disclosed.

Over the past few months Harju Elekter Group has signed 3 large-volume agreements, as a result of which the production of substations in the Estonian and Finnish plants of the Group will increase to a significant degree. As a result of the received orders, the production of substations in the Estonian and Finnish plants of the Group will increase to a significant degree, i.e. the current annual production, which is approx. 1100 substations, could increase up to a maximum of 2500 substations with these orders.

In order to ensure smooth fulfilment of the order volumes, the production capacity of AS Harju Elekter Elektrotehnika will be increased in the first half-year and the subsidiary will transfer its operations to new production halls – being vacated by PKC Eesti – in the Keila Industrial Park.

Konecranes is the world’s leading group providing hoisting equipment and services, servicing a diverse range of customers, incl. the manufacturing and processing industry, shipyards, ports and terminals.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 500 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Management Board/CEO
+372 6747 400

Additional information: Manager of AS Harju Elekter Elektrotehnika Mr Jan Osa (+372 674 7449).

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

 

Large order received by Harju Elekter’s subsidiary

Subsidiary of AS Harju Elekter, AS Harju Elekter Elektrotehnika, received an order for supplying 86 units of specialised pre-fabricated substations to Konecranes within a two-year period. By agreement, the total value of the contract will be disclosing. Substation supplies are directed to the USA.

Over the past few months Harju Elekter Group has signed 3 large-volume agreements, as a result of which the production of substations in the Estonian and Finnish plants of the Group will increase to a significant degree. In order to ensure smooth fulfilment of the order volumes, the production capacity of AS Harju Elekter Elektrotehnika will be increased in the first half-year and the subsidiary will transfer its operations to new production halls – being vacated by PKC Eesti – in the Keila Industrial Park.

Konecranes is the world’s leading group providing hoisting equipment and services, servicing a diverse range of customers, incl. the manufacturing and processing industry, shipyards, ports and terminals.

After launching its activities in 1968, Harju Elekter Group has developed into a leading producer of MV/LV electrical and engineering devices in the Baltic countries and a known and respected manufacturer in Scandinavia. Harju Elekter’s main field of business is the development, manufacturing and sale of equipment necessary for the distribution and transmission of electric energy. The main business is supported by a sheet metal plant in Estonia and the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland and Lithuania employ more than 500 specialists, and the annual sales revenue of the Group exceeds 60 million euros. Harju Elekter’s shares are listed on Nasdaq Tallinn.

Andres Allikmäe
Chairman of the Management Board/CEO
+372 6747 400

Additional information: Manager of AS Harju Elekter Elektrotehnika Mr Jan Osa (+372 674 7449).

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Publication of financial reports in 2017

AS Harju Elekter wishes to the shareholders Happy Holiday Season and informs you that in the year 2017, the consolidated financial results of AS Harju Elekter will be published as following:

2016 4Q results                      27.02.2017
2017 1Q results                      26.04.2017
AGM                                      27.04.2017
2017 2Q results                      26.07.2017
2017 3Q results                      25.10.2017

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group signed a large volume contract

Harju Elekter Group won the procurement for the supply of substations held by Finland’s largest distribution network company Caruna. According to the contract awarded for 2+1+1 years, concluded on 19 December 2016, more than 1000 pre-fabricated substations per year shall be added to the current production of the Harju Elekter Group’s electric equipment plants in Estonia and Finland for Caruna Group, bringing about a considerable increase in production. The estimated volume of the contract is 12 million euros per year.

Caruna is the largest company in Finland dedicated to the transmission of electricity. Countrywide, Caruna holds a market share of about 20 per cent of local electricity transmission and provide electricity to 650,000 private and corporate customers in South, Southwest and West Finland, as well as in the city of Joensuu, the sub-region of Koillismaa and the Satakunta region.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic countries as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia and real estate holding company Harju Elekter Kiinteistöt Oy (100%). In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%), Estonian ultra-capacitors developer and manufacturer Skeleton Technologies Group OÜ (10%) and in the Finnish publicly listed company PKC Group Oyj (5%).

Andres Allikmäe
Chairman of the Management Board/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter Group financial results, 1-9/2016

In the reporting quarter, the Group’s consolidated revenue was 15.8 (Q3 2015: 18.1) million euros. During the reporting quarter, sales revenue decreased 12.7% or 2.3 million euros in relation to the comparison period. 9 month consolidated revenue remained at the same level as the previous year and was 44.8 (9m 2015: 45.6) million euros. The consolidated net profit of the 9m 2016 was 2.85 (9m 2015: 3.20) million euros.

Change

July-September

Change

January-September

Year

(thousand euros)

%

2016

2015

%

2016

2015

2015

Sales revenue

-12.7

15,794

18,091

-1.9

44,759

45,626

60,656

Gross profit

-23.5

2,630

3,441

-4.5

7,852

8,220

10,299

EBITDA

-36.0

1,397

2,181

10.1

3,883

4,321

4,819

EBIT

-42.8

1,023

1,788

-15.7

2,694

3,197

3,276

Profit for the period

-46.3

870

1,620

-11.0

2,849

3,203

3,186

incl attributable to Owners of the Company

-47.0

862

1,627

-10.9

2,850

3,199

3,190

91.2% (Q3 2015: 92.9%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 8.8% (Q3 2015: 7.1%) of the consolidated sales volume. In the reporting quarter the sale of electrical equipment had decreased by 16.1% or 2,566 thousand euros in comparison with the comparison period and by 2.3% or 914 thousand euros in 9 month comparison, providing 85.6% of the sales revenue of the Group. In terms of other products and services, sales revenue in the reporting quarter has increased by 12.4%, being by 269,000 euros more than in the comparable period.

In 9m 2016, 79,1% (9m 2015: 76,5%) of the Group’s products and services were sold in foreign markets, outside Estonia and in the reporting quarter 81,2% (Q3 2015: 77,5%). The Finnish market, which is the Group’s largest, has grown by 7.6% or 2,185 thousand euros year-on-year. In the reporting quarter, 68.8% of the Group’s products and services were sold on the Finnish market (Q3 2015: 65.4%). Sales revenue from the Swedish market has increased by 68.3% in the third quarter and 57.8% during the year. AS Harju Elekter Elektrotehnika, which is responsible for the Sweden-oriented business activity, has been quite active in 2015 as well as in 2016 in sales as well as product development work, in order to increase the sales volumes of the group on the Swedish market.

The Group’s sales revenue from the Norwegian market have decreased by 45.6% over the 9 month period due to a change in the ownership of the main client of the Lithuanian company, as a result of which sales orders have been deferred to the following periods.

In the first 9 months of 2016, the Group sold 20.9% of its products and services to the Estonian market (2015: 23.5%). Year on year, supply to the Estonian market decreased by 1.1 million euros or 12.7%. The decline was precipitated by the continued decline in investments in the energy distribution sector in Estonia.

Operating expenses decreased 9.3% in the reporting quarter and 0.8% in the nine months compared to the reference period. Cost of sales decreased 10.1% in the reporting quarter and 1.3% in nine months compared to the reference period. Distribution costs increased by 14.7% in the reporting quarter and by 13% in 9m in relation to the comparison periods, the rate of distribution costs to revenue accounted for 5.0% (9m 2015: 4.3%). In the case of distribution costs, labour costs have increased the most, both due to structural changes in the companies as well as due to payment of additional remuneration. Administrative expenses decreased by 10.9% in the reporting quarter and 3.8% in 9m in relation to the comparison periods, and the rate of administrative expenses to revenue accounted for 6.6%, having decreased by 0.2 percentage points.

As at the end of the reporting period, the Group had 454 employees (30 September 2015: 477). Compared to the beginning of the year, the number of employees has decreased by 16. In the first 9 months of 2016, an average of 451 employees worked in the Group, which is 24 people less than in the comparable period. In the reporting quarter, the average number of employees decreased by 32, to 447. The sound financial results of the Group’s companies in Finland in 2016 have resulted in the payment of additional remuneration and an increase in reserves, which also led to higher labour costs for the Group. In the reporting quarter, the employees were paid as salaries and fees 2,722 (Q3 2015: 2,454) thousand euros and in nine months, 7,430 (9m 2015: 7,256) thousand euros. The average monthly salary for an employee of the Group was 1,829 (9m 2015: 1,696) euros.

Another 58,000 euros was added in the third quarter to the one-off expense of 71,000 euros incurred in the second quarter upon the merger of the metal factories, totalling 129,000 euros. The merger of the metal factories has reached the finishing line in the reporting period. Failures in production, caused by the moving and readjustment of machinery and equipment, had been eliminated to a large extent by the end of the third quarter. Production failures resulted in temporary standstills in production; accordingly, there have been problems in compliance with the delivery deadlines, which in turn have influenced the sales revenue for the first 9 months as well as of the reporting quarter and also the operating profit.

In nine months the gross profit of the Group was 7,852 (9m 2015: 8,220) thousand euros. The gross profit margin was 17.5% (9m 2015: 18.0%). In Q3 the gross profit margin was 16.7% (Q3 2015: 19.0%).

The operating profit of the Group in the nine months was 2,694 (9m 2015: 3,197) thousand euros and the EBITDA was 3,883 (9m 2015: 4,321) thousand euros. The operating margin of the reporting period was 6.0% (9m 2015: 7.0%) and the EBITDA margin was 8.7% (9m 2015: 9.5%).

The consolidated operating profit of the reporting quarter was 1,023 (Q3 2015: 1,788) thousand euros and the EBITDA was 1,397 (Q3 2015: 2,181) thousand euros. The operating margin of the reporting quarter was 6.5% (Q3 2015: 9.9%) and the EBITDA margin was 8.8% (Q3 2015: 12.1%).

In Q3 2016, the consolidated net profit was 870 (Q3 2015: 1,620) thousand euros, of which the share of the owners of the Company was 862 (Q3 2015: 1,627) thousand euros. EPS in the Q3 2016 was 0.05 (Q3 2015: 0.09) euros. The net margin was 5.5% (Q3 2015: 9.0%).

Overall, the consolidated net profit of the nine months 2016 was 2,849 (9m 2015: 3,203) thousand euros. The share of the owners of the Company was 2,850 (9k 2015: 3,199) thousand euros. EPS was 0.16 (9m 2015: 0.18) euros.

In nine months, the Group has made a total of 1,336 (9m 2015: 2,240) thousand euros worth of investments to property, plant and equipment and investment properties. In the 1st half of 2015, the Group invested 1,272 thousand euros to the production facilities at Allika Industrial Park. In Q3 2016 the Group invested 637,000 euros to the building of the next larger production complex at Allika Industrial Park.

Main events and post-balance events

Swiss CEAMS-CE Asset Management, along with its Baltic partners, announced the next nominees for the Corporate Excellence Award. AS Harju Elekter was recognised as the best listed company in Estonia while being the third in the overall Baltic assessment. It was recognised thanks to a significant improvement compared to the previous year, which was possible thanks to the continued expansion in Northern Europe, conservative balance sheet management as well as a stable and experienced management team. Positive recognition was awarded also to the Group’s Finnish company Oy Finnkumu, who reached high, 2nd ranking on the list of the Entrepreneurs of South Ostrobothnia.

On 14 October 2016, AS Harju Elekter bought the real estate company Kiinteistö Oy Uutvallinkulma. Following the transaction, it will bear the name of Harju Elekter Kiinteistö Oy. The contract price was 518,000 euros. To date, the acquired company has been leasing 2,470 m2 of production premises to the Group’s Finnish company, Finnkulmu Oy, and in the immediate future the production premises used by Satmatic Oy at Kerava and Ulvila, totalling 5,185 m2, will also be consolidated under the acquired real estate company. This activity is consistent with the policy of the Group, whereby any production premises used by companies in the Group are owned by the Group.

On 21 October 2016, in Allika Industrial Park, located on the city limits of Tallinn, the cornerstone was laid for two important buildings: the production and storage facilities of HE and the production and storage building of Stera Technologies Oy, the commercial producer of mechanical and electromechanical devices and components. Prior to that, in April 2016, a preliminary contract was concluded with Stera Technologies Oy for the construction and subsequent leasing of production facilities for the company and procurement conducted to identify a project manager, with construction company Rand and Tuulberg AS qualifying. The investment volume is 8.2 million euros, which will be covered from own funds and a bank loan. For this purpose, loan agreements in a total amount of 7 million euros, was signed with Swedbank AS. In total, 12,700 m2 of floor area for various purposes will be constructed.  First stage will be ready for delivery to the tenants in the first half of 2017.

AS Harju Elekter granted a loan of 660,000 euros to Skeleton Technologies OÜ. In Q3, an additional round of funding and involvement of investors was arranged and the loan was converted into the share capital of Skeleton Technologies OÜ. The respective entry in the Commercial Register was made on 24 August 2016.

On 28 April 2016, the AGM of shareholders of AS Harju Elekter was held; it approved the 2015 annual report and distribution of profit as well as the decision to pay the shareholders a dividend of 0.05 euros per share, or a total of 887,000 euros, for 2015. In addition, the AGM decided to introduce a no par value share and approved the new version of the articles of association of AS Harju Elekter. By virtue of the decision of the AGM, the share capital of AS Harju Elekter will be reduced by 1,242,000 euros, to 11,176,124.40 euros, by means of a reduction of the book value of the shares. The reduction of share capital was entered in the Commercial Register on 18 October 2016 and disbursements to the shareholders will be made in amount of 0.07 euros per share after the three-month term, stipulated by law, has passed as of the registering of the reduction of share capital in the Commercial Register, i.e. on 20 January 2017. The list of shareholders eligible to receive dividends as well as those participating in the reduction of share capital was fixed as at 23.59 on 13 May 2016. Dividends were transferred to the shareholders’ bank accounts on 17 May 2016.

At its 5 April 2016 meeting, the Supervisory Board of AS Harju Elekter decided to merge the metal factories of the Group’s Estonian subsidiaries, consolidating the sheet metal processing resources, capability and know-how of the entire Group into AS Harju Elekter Teletehnika. The outcome of restructuring is significant economy in terms of manufacturing as well as labour costs. After the changes, AS Harju Elekter Teletehnika will focus on the manufacturing of sheet metal products and details for the electrical engineering and telecommunications sector, while also maintaining the production line for telecommunications products and fibre-optic cables. By the end of Q3, 30 September, the distribution of assets of factories as well as transfer of employees has been completed.

The annual general meeting of the shareholders of PKC Group Oyj, which gathered on 4 April 2016, decided to pay dividends in the amount of 0.70 euros per share. Dividends were transferred to the shareholders’ bank accounts on 15 April 2016. AS Harju Elekter owns 1,094,641 shares. The dividend income of 766,000 euros is reflected in the profit of Q2 2016. The 15% income tax withheld from the dividends in Finland comprised 115,000 euros. PKC Group dividends added 651,000 euros to the cash flow from investment activities in Q2.

In February, our subsidiary Satmatic Oy in Finland and Finnkulmu Oy participated in the local trade fair Sähkö-Tele-Valo-AV, in Jyväskülä, and in October in the fair Energia 2016, in Tampere. In September, AS Harju Elekter Elektrotehnika presented its product range at the SLO autumn fair, and in April AS Harju Elekter Trade Group participated in the International Building Fair Estbuild, in Tallinn.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information:
Tiit Atso, CFO, +372 674 7400
Interim report 1-9/2016

 

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET, 30.09.2016
Unaudited
EUR’000
ASSETS 30.09.16 31.12.15
Cash and cash equivalents 2 593 5 711
Trade receivables and other receivables 9 219 6 678
Prepayments 440 278
Prepaid income tax 26 28
Inventories 10 169 7 148
TOTAL CURRENT ASSETS 22 447 19 843
Deferred income tax asset 57 57
Other long-term financial investments 23 512 20 188
Investment property 13 493 12 990
Property, plant and equipment 7 802 8 010
Intangible assets 5 436 5 491
TOTAL NON-CURRENT ASSETS 50 300 46 736
TOTAL ASSETS 72 747 66 579
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 75 296
Trade payables and other payables 7 470 6 043
Payables to shareholders 1 242 0
Tax liabilities 1 307 944
Income tax liabilities 138 146
Short-term provision 16 34
TOTAL CURRENT LIABILITIES 10 248 7 463
NON-CURRENT LIABILITIES 912 912
TOTAL LIABILITIES 11 160 8 375
Share capital 12 418 12 418
Unregistered share capital -1 242 0
Share premium 804 804
Restricted reserves 20 734 18 047
Retained earnings 28 756 26 817
TOTAL OWNERS’ EQUITY 61 470 58 086
Non-controlling interests 117 118
TOTAL EQUITY 61 587 58 204
TOT.LIABILIT.AND OWNERS’ EQUITY 72 747 66 579
CONSOLIDATED INCOME STATEMENT,  1-9/2016
Unaudited
EUR’000 Q3 2016 Q3 2015 9m 2016 9m 2015
Revenue 15 794 18 091 44 759 45 626
Cost of goods sold -13 164 -14 650 -36 907 -37 406
Gross profit 2 630 3 441 7 852 8 220
Distribution costs -704 -614 -2 216 -1 961
Administrative expenses -922 -1 035 -2 973 -3 088
Other income 31 5 83 66
Other expenses -12 -9 -52 -40
Operating profit 1 023 1 788 2 694 3 197
Finance income 2 3 769 788
Finance costs -6 -11 -17 -40
Profit from normal operations 1 019 1 780 3 446 3 945
Corporate income tax -149 -160 -597 -742
Profit for the period, attributable to 870 1 620 2 849 3 203
   owners of the Company 862 1 627 2 850 3 199
   non-controlling interests 8 -7 -1 4
Basic earnings per share  (EUR) 0,05 0,09 0,16 0,18
Diluted earnings per share  (EUR) 0,05 0,09 0,16 0,18

Changes in the Management Board of AS Harju Elekter

Due to the continued expansion and internationalisation of Harju Elekter Group and the need to develop the management structure of the Group, as well as based on the suggestions of the Corporate Governance Recommendations, the Supervisory Board of the company has, at their regular meeting held today, decided to expand the membership of the Management Board of AS Harju Elekter to three members.

Andres Allikmäe, the former manager of the public limited company, will be appointed as the Chairman of the Management Board and will continue on the basis of the current service contract and authorisations. In addition, Tiit Atso and Aron Kuhi-Thalfeldt will be appointed as members of the Management Board, with their authorisations beginning on 1 November 2016 and ending on 31 October 2019.

Tiit Atso has been working as the CFO of AS Harju Elekter since 2014 and has obtained higher education at the Faculty of Economics of the Tallinn University of Technology. Aron Kuhi-Thalfeldt has been working at AS Harju Elekter as the Head of Real Estate and Energy Services since 2003 and has obtained higher education at the Faculty of Power Engineering of the Tallinn University of Technology.

The precise areas of responsibility of the members of the Management Board will be established with the decision of the Supervisory Board and with the work regulations of the Management Board. The CVs of the members of the Management Board will be published on the website of the company.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic countries as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia and recently purchased real estate holding company Harju Elekter Kiinteistöt Oy (100%). In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%), Estonian ultra-capacitors developer and manufacturer Skeleton Technologies Group OÜ (10%) and in the Finnish publicly listed company PKC Group Oyj (5%).

Endel Palla
Chairman of the Supervisory Board
+372 674 7400

 

Prepared by
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter laid the cornerstone for two new buildings in Allika Industrial Park

On 21 October, in Allika Industrial Park, located in Saku Rural Municipality on the border of Tallinn, the cornerstone was laid to two important buildings: the production and storage facilities of HE and the production and storage building of Stera Group, the commercial producer of mechanical and electromechanical devices and components. In total, 12,700 m2 of floor area for various purposes will be constructed.

The construction of the buildings was commissioned by AS Harju Elekter, the planner was OÜ Architec and the project and construction manager is AS Rand ja Tuulberg. The sites will be completed and ready to be delivered to the lessees in the first half of 2017.

The volume of the investments is 8.2 million euros, which is covered with self-financing and a bank loan.

Allika Industrial Park is well connected to Tallinn Ring Road and Via Baltica, as well as the ports of Tallinn and Paldiski, and is becoming an increasingly important employer to the residents of the Õismäe and Astangu sub-districts and the rural municipalities of Harku and Saue.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic countries as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia and recentely purchased real estate holding company Harju Elekter Kiinteistöt Oy (100%).

In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%), Estonian ultra-capacitors developer and manufacturer Skeleton Technologies Group OÜ (10%) and in the Finnish publicly listed company PKC Group Oyj (5%).

Andres Allikmä
Managing Director/CEO
+372 674 7400

Reduction of share capital was entered in the Commercial Register

At 18 October 2016, the reduction of share capital of AS Harju Elekter on the basis adopted by resolution of the General Meeting of Shareholders held at 28 April 2016 was entered in the Commercial Register.

According to the resolutions of the General Meeting of Shareholders held on 28 April 2016 it was decided to reduce the share capital of the Company altogether by EUR 1,241,791.60 from EUR 12,417,916 to EUR 11,176,124.40. The share capital is reduced by reducing the book value of the shares from EUR 0.70 to EUR 0.63, whereas the number of the shares remains the same (i.e. 17,739, 880). The reduction of share capital in the amount of EUR 1,241, 791.60 (EUR 0.07 per share) shall be paid to the shareholders three months after entry of the reduction of share capital in the commercial register, on 20th of January 2017.

The list of shareholders, who were entitled to receive the payment related to reduction of the book value of shares was closed on 12 May 2016 at 23:59.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter acquired Finnish real estate company Kiinteistö Oy Uutvallinkulma

On 14 October 2016, AS Harju Elekter signed a contract for the purchase of the real estate company Kiinteistö Oy Uutvallinkulma. Following the transaction, the acquired company will trade under the name Harju Elekter Kiinteistöt Oy. Appointments to the Management Board include Andres Allikmäe (Chairman), and Tiit Atso (CFO of AS Harju Elekter) and Aron Kuhi-Thalfeldt (Head of Real Estate Dept of AS Harju Elekter) as Members. Simo Puustelli (Managing Director of Satmatic Oy) has been appointed CEO of the company. The contract price worked out to be 518,000 euros.

To date, the acquired company has been leasing 2,470 sq m of production premises to Finnkumu Oy, the Group’s Finnish company. The plan for the immediate future is to consolidate under the acquired real estate company also the production premises used by Satmatic Oy at Kerava and Ulvila, 5,185 sq m in total. This activity is consistent with the policy of the Group, whereby any production premises used by companies in the Group are owned by the Group.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic countries as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%), Estonian ultra-capacitors developer and manufacturer Skeleton Technologies Group OÜ (10%) and in the Finnish publicly listed company PKC Group Oyj (5%).

Andres Allikmäe
Managing Director/CEO
+372 674 7400

 

Prepared by
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

 

Harju Elekter Group financial results, 1-6/2016

The Group’s reporting quarter was successful. The consolidated sales revenue in the accounting quarter was 17.2 (H1 2015: 16.6) million euros, increased by 46% or 5.6 million euros compared to the previous quarter, and 4% or 0.6 million euros in relation to the comparison period. In H1, the consolidated sales revenue increased by 5.2% up to 29.0 (H1 2015: 27.5) million euros. The consolidated net profit of the H1 2016 was 2.0 million euros, which was 25.8% more than in the comparison period.

Change

April – June

Change

January – June

Year

(thousand euros)

%

2016

2015

%

2016

2015

2015

Sales revenue

3.7

17,208

16,590

5.2

28,965

27,535

60,656

Gross profit

2.3

3,153

3,081

9.3

5,222

4,779

10,299

EBITDA

-2.6

1,705

1,751

16.4

2,486

2,139

4,819

EBIT

-7.2

1,281

1,380

18.6

1,671

1,408

3,276

Profit for the period

6.0

1,668

1,573

25.8

1,979

1,573

3,186

incl attributed to Owners of the Company

6.9

1,664

1,557

27.7

1,988

1,557

3,190

There has been a growth in sales revenue among almost all products and services. 93% (Q2 2015: 92%) of the reporting quarter sales revenue was earned from the Production segment, and Real Estate together with other areas of activity contributed 7% (Q2 2015: 8%) of the consolidated sales volume. The sale of electric equipment had increased by 5% or 935,000 euros in comparison with the comparison period and by 7% or 1,652 thousand euros in 6 month comparison, providing 86% of the sales revenue of the Group. The addition of the new rental premises in 2015 has increased the rental revenue by 9% of 95,000 euros in the first six months of 2016.

In H1 2016, 78% (H1 2015: 76%) of the Group’s products and services were sold in foreign markets, outside Estonia and in the reporting quarter 81% (Q2 2015: 79%). As a result, that most of the Group’s subsidiaries increased them sales to Finland, the Group’s biggest market has grown by 16% or 1,735 thousand euros over a year. 72% (H1 2015: 64%) of the Group’s products and services were sold on the Finnish market in the reporting quarter.

Sales revenues from the Estonian market continued to decrease. During the reporting quarter 19% (Q2 2015: 21%) of the Group’s products and services were sold on the Estonian market. In 6 months, the share of Estonian market has dropped by two percentage points.

Operating expenses increased 5% in the reporting quarter and 4% in the first half of the year compared to the reference periods. Cost of sales increased 4% in the reporting period. Distribution costs increased by 19% in the reporting quarter and by 12% in H1 in relation to the comparison periods, the rate of distribution costs to revenue accounted for 5.2% (H1 2015: 4.9%). Administrative expenses increased by 7% in the reporting quarter, remaining on the same level in the H1 comparison. The rate of administrative expenses to revenue accounted for 7.1%, having decreased by 0.4 percentage points.

The optimisation of production that started in the second half of 2015 in the Estonian undertakings of the Group has brought about the reduction of the number of employees. In Q2 2016 as well as in H1 2016, the average 454 people worked in the Group; there were on the average by 20 persons less in H1 and by 27 persons less in Q2 compared to the reference periods. In the reporting quarter, employee wages and salaries totalled 2,335 (Q2 2015: 2,414) thousand euros and during the first 6 months 4,709 (H1 2015: 4,802) thousand euros. The average wages per employee per month amounted to 1,730 (H1 2015: 1,688) euros.

The optimisation of production, which began in the second half of the past year and is continuing in 2016, has improved the profit of the reporting period and the profit margins when compared to the reference period.

In 1H the gross profit of the Group was 5,222 (H1 2015: 1,408) thousand euros. The gross profit margin was 18.0% (H1 2015: 17.4%). In Q2 the gross profit margin was 18.3% (Q2 2015: 18.6%).

In H1 2016, the Group’s operating profit was 1,671 (H1 2015: 1,408) thousand euros and EBITDA 1,671 (H1 2015: 1,408) thousand euros. Return of sales for the 6-months period was 5.8% (H1 2015: 5.1%) and return of sales before depreciation 8.5% (H1 2015: 7.8%).

The Group’s operating profit in the reporting quarter was 1,281 (Q2 2015: 1,380) thousand euros and EBITDA 1,705 (Q2 2015: 1,751) thousand euros. Return of sales for the accounting quarter was 7.4% (Q2 2015: 8.3%) and return of sales before depreciation 10.0% decreasing by 0.5 per cent point, compering to the same period a year before. Q2 2016 was the time, when the Group made one-off expenses in the amount of 71,000 euros upon merging the metal factories.

The consolidated net profit of the Q2 2016 was 1,668 (Q2 2015: 1,573) thousand euros, of which the share of the owners of the Company was 1,664 (Q2 2015: 1,557) thousand euros. EPS in the Q2 as well as in the reference period was 0.09 euros. The net profit margin was 9.7% (Q2 2015: 9.5%).

Overall, the consolidated net profit of the H1 2016 was 1,979 (H1 2015: 1,583) thousand euros. The share of the owners of the Company was 1,988 (H1 2015: 1,572) thousand euros. In H1, EPS was 0.11 (H1 2015: 0.09) euros.

During the 6-months period, the Group’s investments to non-current assets totalled 478 (H1 2015: 2,047) thousand euros. In H1 2015, the Group invested 1,272,000 euros in its production facilities at Allika Industrial Park. In the second half of 2016, Allika Industrial Park will see the beginning of the construction of the next major production complex, adding further 8400 m2 in rental premises, and the construction of Stera Technologies Oy and Laohotell for proposed rental premises of 4100 m2.

Main events and post-balance events

On 28 April 2016, the AGM of shareholders of AS Harju Elekter was held; it approved the 2015 annual report and distribution of profit as well as the decision to pay the shareholders a dividend of 0.05 euros per share, or a total of 887,000 euros, for 2015. In addition, the AGM decided to introduce a no par value share and approve the new version of the articles of association of AS Harju Elekter. By virtue of the decision of the AGM, the share capital of AS Harju Elekter will be reduced by 1 242,000 euros, to 11,176,124.40 euro, by means of a reduction of the book value of the shares. Payments of 0.07 euros per share to the shareholders will be made during the term prescribe by law. The shareholders registered in the shareholders’ registry on 12 May 2016 at 23.59 entitled to dividend as well as reduction of share capital. The dividends was paid to the shareholders on 17 May 2016 by a transfer to the bank account of the shareholder.

In April 2016, a preliminary contract was concluded with Stera Technologies Oy that produces mechanical and electromechanical equipment and parts for the construction and subsequent rental production facilities in Allika Industrial Park, which belongs to the Group. The total size of the production facilities is 8400 m2 and they will be delivered to the lessee in two stages, in July 2017 and October 2018. Allika Industrial Park conducted a procurement to identify a project manager, with Ehitusfirma Rand ja Tuulberg AS qualifying. Both the production facilities to be built for Stera Technologies OÜ and the Laohotell site have received building permits.

At its 5 April 2016 meeting, the Supervisory Board of AS Harju Elekter decided to merge the metal factories of the Group’s Estonian subsidiaries, consolidating the sheet metal processing resources, capability and know-how of the entire Group into AS Harju Elekter Teletehnika. The outcome of restructuring is economy in terms of manufacturing as well as labour costs. After the changes, AS Harju Elekter Teletehnika will focus on the manufacturing of sheet metal products and details for the electrical engineering and telecommunications sector, while also maintaining the production line for telecommunications products and fibre-optic cables. At the same time, the reorganization will enable AS Harju Elekter Elektrotehnika to focus its activities to the core business – manufacturing of electrical equipment, and make it more efficient.

The general meeting of the shareholders of PKC Group Oyj, which gathered on 4 April 2016, decided to pay dividends in the amount of 0.70 euros per share. Dividends were transferred to the shareholders’ bank accounts on 15 April 2016. AS Harju Elekter owns 1,094,641 shares. The dividend income of 766,000 euros is reflected in the profit of Q2 2016. The 15% income tax withheld from the dividends in Finland comprised 115,000 euros. The dividends of PKC Group add 651,000 euros to the cash flow from investment activities in Q2.

AS Harju Elekter decided to provide Skeleton Technologies OÜ with a loan of 660,000 euros (of which, 330,000 euros was issued in the reporting quarter and 330,000 euros after the balance sheet date). In the event of an additional round of funding, the loan will be converted into share capital in order to preserve the holding of AS Harju Elekter.

In February, our Finnish subsidiaries Satmatic Oy and Finnkumu Oy participated in the local trade fair Sähkö-Tele-Valo-AV in Jyväskylä. In the beginning of April, AS Harju Elekter Kaubandusgrupp presented its product range in Tallinn at the international building fair Estbuild.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Interim report 1-6/2016

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET, 30.06.2016
Unaudited
EUR’000
ASSETS 30.06.16 31.12.15
Cash and cash equivalents 4 476 5 711
Trade receivables and other receivables 9 007 6 678
Prepayments 372 278
Prepaid income tax 25 28
Inventories 9 807 7 148
TOTAL CURRENT ASSETS 23 687 19 843
Deferred income tax asset 57 57
Other long-term financial investments 20 954 20 188
Investment property 12 912 12 990
Property, plant and equipment 7 850 8 010
Intangible assets 5 442 5 491
Total non-current assets 47 215 46 736
TOTAL ASSETS 70 902 66 579
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 148 296
Trade payables and other payables 8 260 6 043
Payables to shareholders 1 242 0
Tax liabilities 1 413 944
Income tax liabilities 103 146
Short-term provision 4 34
TOTAL CURRENT LIABILITIES 11 170 7 463
NON-CURRENT LIABILITIES 912 912
TOTAL LIABILITIES 12 082 8 375
Share capital 12 418 12 418
Unregistered share capital -1 242 0
Share premium 804 804
Restricted reserves 18 836 18 047
Retained earnings 27 895 26 817
TOTAL OWNERS’ EQUITY 58 711 58 086
Non-controlling interests 109 118
TOTAL EQUITY 58 820 58 204
TOT.LIABILIT.AND OWNERS’ EQUITY 70 902 66 579
CONSOLIDATED INCOME STATEMENT,  1-6/2016
Unaudited
EUR’000 Q2 2016 Q2 2015 6m 2016 6m 2015
NET SALES 17 208 16 590 28 965 27 535
Cost of goods sold -14 055 -13 509 -23 743 -22 756
Gross profit 3 153 3 081 5 222 4 779
Distribution costs -789 -663 -1 512 -1 347
Administrative expenses -1 104 -1 028 -2 051 -2 054
Other income 42 7 52 61
Other expenses -21 -17 -40 -31
Operating profit 1 281 1 380 1 671 1 408
Finance income 766 771 767 785
Finance costs -5 -22 -11 -29
Profit from normal operations 2 042 2 129 2 427 2 164
Corporate Income tax -374 -556 -448 -581
Profit for the period, attributable to 1 668 1 573 1 979 1 583
   owners of the Company 1 664 1 557 1 988 1 572
   non-controlling interest 4 16 -9 11
Basic earnings per share  (EUR) 0,09 0,09 0,11 0,09
Diluted earnings per share  (EUR) 0,09 0,09 0,11 0,09

Interim report 1-6/2016

Tiit Atso
CFO
+372 674 7422

Harju Elekter Group financial results, 1-3/2016

The reporting quarter was successful for the Harju Elekter Group. Despite the fact that the economic environment was unstable, we were able to reach the goals we set for ourselves.

January – March

Year

2016

2015

2015

Revenue (thousand euros)

11,757

10,945

60,656

Gross profit (thousand euros)

2,069

1,698

10,299

EBITDA (thousand euros)

780

388

4,819

EBIT (thousand euros)

390

29

3,276

Profit for the period (thousand euros)

311

10

3,186

 incl attributed to Owners of the Company (thousand euros)

324

16

3,190

In the accounting quarter, the Group’s consolidated revenue was 11.8 (2015 Q1: 10.9) million euros. Sales revenue of the reporting quarter increased by 7% or 0.8 million euros in relation to the comparison period. 89% of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 11% of the consolidated sales volume. The sales of electrical equipment accounted for 94% (Q1 2015: 91%) of the sales revenue of the Production segment and 84% (Q1 2015: 81%) of the sales revenue of the whole Group.  The sale of electrical equipment was up by 11% or 935,000 euros. The increase of rent revenue was mainly due to the completion of the production building in Allika Industrial Village in June 2015, due to which rental revenues have increased 8% (38,000 euros) in Q1 2016.

The Finnish market, which is the Group’s largest, has grown by 20% or 1,235,000 euros year-on-year. In the reporting quarter, 63% of the Group’s products and services were sold on the Finnish market (Q1 2015: 56%). Most of the Group’s enterprises have managed to grow their sales volumes on the Finnish market. According to the estimates made by the Group’s management, the share of the Finnish market is set to increase even further in 2016.

Sales to the Swedish market have grown by 160% or 487,000 euros year-on-year. While the operations of the Swedish company Harju Elekter AB have been suspended, AS Harju Elekter Elektrotehnika has been working towards increasing its sales volumes on the Swedish markets.

During the reporting quarter 26% (Q1 2015: 28%) of the Group’s products and services were sold on the Estonian market.

In the reporting quarter, the operating expenses increased by 4%. The cost of sales increased by 5% up to 9,688,000 euros. In the reporting quarter, the distribution costs increased by 39,000 euros to 723,000 euros, the rate of distribution costs to revenue accounted for 6.1% (Q1 2015: 6.2%). Administrative expenses were 79,000 euros lower than the indicator for the comparable period, and the rate of administrative expenses to revenue accounted for 8.1%, having decreased by 1.3 percentage points.

The optimisation of production, which started in the second half of 2015 in the Group’s Estonian enterprises, involved staff reductions. In Q1 2016, the average 453 people worked in the Group − on the average by 14 persons less than in the reference period; employee wages and salaries totalled 2,374,000 (Q1 2015: 2,388,000) euros. The average wages per employee per month amounted 1,747 (Q1 2015: 1,705) euros. The labor costs decreased by 4.5% to 2,950,000 euros and the share of labour costs in sales revenue from 28% in Q1 2015 to 25% in the reporting quarter.

In the reporting quarter, profits as well as profit margins have improved compared to the reference period. In the first quarter the gross profit of the Group was 2,069,000 (Q1 2015: 1,698,000) euros. The gross profit margin was 17.6% (Q1 2015: 15.5%).

The Group’s operating profit of Q1 2016 was 390,000 (Q1 2015:29,000) euros and EBITDA 780,000 (Q1 2015: 388,000) euros. Return of sales for the accounting quarter was 3.3% (Q1 2015: 0.3%) and return of sales before depreciation 6.6% (Q1 2015: 3.5%).

Overall, the consolidated net profit of the Q1 2016 was 311,000 (Q1 2015: 10,000) euros, of which the share of the owners of the Company was 324,000 (Q1 2015: 16,000) euros. EPS in the Q1 was 0.02 euros.

During the 3-months period, the Group’s investments to non-current assets totalled 49,000 euros (Q1 2015: 1.04 million euros). Major investments in the Group are planned to H2 2016.

Post-balance events

At its 5 April 2016 meeting, the Supervisory Board of AS Harju Elekter decided to merge the metal factories of the Group’s Estonian subsidiaries – AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, consolidating the sheet metal processing resources of the entire Group into AS Harju Elekter Teletehnika. The outcome of restructuring is significant economy in terms of manufacturing as well as labour costs. The merger of factories will be realised over the course of 2016.

The general meeting of shareholders of PKC Group Oyj, held on 4 April 2016, decided to pay dividends amounting to 0.70 euros per share. Dividends were transferred to the bank accounts of shareholders on 15 April 2016. AS Harju Elekter owns 1,094,641 of PKC Group Oyj shares. The dividend income of 766,000 euros is reflected in the profit and cash flow from investment activity for Q2 of 2016. The 15% income tax on dividends, withheld in Finland, accounted for 115,000 euros. The cash flow from investment activity (PKC Group dividends) accounted for 651,000 euros.

The Management Board of AS Harju Elekter called an annual general meeting of shareholders on 28 April 2016. The Board will propose to the AGM to pay a dividend of 0.05 (2014: 0.15) euros per share for the year 2015, totalling 877 (2014: 2,610) thousand euros. The Management Board also supports the Supervisory Board’s proposals to amend the articles of association and the reduction of share capital to 11.2 million euros, involving an additional disbursement of 0.07 euro per share to the shareholders.

In April, a preliminary contract was concluded with Stera Technologies Oy, manufacturer of mechanical and electromechanical assemblies, for the construction and subsequent rental of production facilities in Allika Industrial Park, which belongs to the Group. The total size of the production facilities is 8400 m2 and they will be delivered to the lessee in two stages, in April 2017 and October 2018.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-3/2016

BALANCE SHEET, 31.03.2016
Unaudited
Group
EUR’000
ASSETS 31.03.16 31.12.15
Cash and cash equivalents 5 513 5 711
Trade receivables and other receivables 7 982 6 678
Prepayments 375 278
Prepaid income tax 56 28
Inventories 8 094 7 148
TOTAL CURRENT ASSETS 22 020 19 843
Deferred income tax asset 57 57
Other long-term financial investments 19 476 20 188
Investment property 12 868 12 990
Property, plant and equipment 7 816 8 010
Intangible assets 5 466 5 491
Total non-current assets 45 683 46 736
TOTAL ASSETS 67 703 66 579
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 222 296
Trade payables and other payables 7 725 6 043
Tax liabilities 886 944
Income tax liabilities 146 146
Short-term provision 9 34
TOTAL CURRENT LIABILITIES 8 988 7 463
NON-CURRENT LIABILITIES 912 912
TOTAL LIABILITIES 9 900 8 375
Share capital 12 418 12 418
Share premium 804 804
Restricted reserves 17 335 18 047
Retained earnings 27 141 26 817
TOTAL OWNERS’ EQUITY 57 698 58 086
Non-controlling interests 105 118
TOTAL EQUITY 57 803 58 204
TOT.LIABILIT.AND OWNERS’ EQUITY 67 703 66 579
INCOME STATEMENT,  1-3/2016
Unaudited
EUR’000
GROUP Q1 2016 Q1 2015
NET SALES 11 757 10 945
Cost of goods sold -9 688 -9 247
Gross profit 2 069 1 698
Marketing expenses -723 -684
Administrative expenses -947 -1 025
Other revenue 10 54
Other expenses -19 -14
Operating profit 390 29
Finance income 1 14
Finance costs -6 -7
Profit from normal operations 385 36
Corporate Income tax -74 -26
Profit for the period, attributable to 311 10
   owners of the Company 324 16
   non-controlling interest -13 -6
Basic earnings per share  (EUR) 0,02 0,00
Diluted earnings per share  (EUR) 0,02 0,00

Interim report 1-3/2016

Tiit Atso
CFO
+372 674 7422

Resolution of AGM

Today, on 28 April 2016 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 81 shareholders and their authorised representatives who represented the total of 11,375,563 votes accounting for 64.12 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2015;
2. Approval to profit distribution;
3. Introducing no par value shares and amendment of the articles of association;
4. Reduction of share capital

1. Approval to AS Harju Elekter annual report of the year 2015

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2015, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 66,579 thousand euros as of 31.12.2015, while the sales revenue of the financial year was 60,656 thousand euros and net profit 3,186 thousand euros.

The number of the votes given in favor of the resolution was 11,365,683 which accounted for 99.91 % of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2015 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2015 23,626,972 euros
total net profit of the financial year  3,190,578 euros
total retained profit on 31.12.2015 26,817,550 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,05 euros per share*)    886,994 euros
increase of reserves     23,792 euros
balance carried forward after profit distribution 25,906,764 euros

The dividends will be paid to the shareholders on 17 May 2016 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 12 May 2016 at 23.59 shall be entitled to dividend.

The number of the votes given in favor of the resolution was 10,793,733 which accounted for 94.89 % of the voted participants.

3. Introducing no par value shares and amendment of the articles of association

The general meeting resolved:
3.1    Introduce no par value shares.
3.1.1    In connection with introducing no par value shares, amend clauses 3.1, 3.2 and 11.3 of the articles of association of AS Harju Elekter and confirm their new wording as follows:
3.1 The minimum share capital of the company is EUR 5,000,000 (five million) and the maximum share capital is EUR 20,000,000 (twenty million).
3.2 The minimum number of no par value shares is 8,000,000 and the maximum number is 32,000,000. Each share grants one vote at the general meeting of shareholders. The company only has registered shares. The company only has one class of shares and these give the same rights to the shareholders.
11.3 The shareholders shall be paid a part of the profit (dividend) in accordance with the book value of their shares.
3.1.2    As a result of introducing a no par value share, AS Harju Elekter will have 17,739,880 no par value shares, whereas each share grants the shareholder one vote at the general meeting of shareholders. As a result of adopting the resolution specified in clause 3.1, the book value of an AS Harju Elekter share will be EUR 0.70.

3.2    Adjust the articles of association of AS Harju Elekter and approve its new wording as follows:
3.2.1    Exclude from the articles of association clauses 2.1.5, 2.1.6, 2.1.10, 2.1.11, 3.4, 3.5, 5.13 and 5.14.
3.2.2    Amend clauses 4.3, 5.2, 5.11 and 11.4 of the articles of association and approve these in a new wording as follows:
4.3 The shareholders shall be notified of the annual general meeting no later than three weeks in advance thereof. A notice of the general meeting shall be published in at least one national newspaper no later than three weeks prior to the general meeting.
5.2 The supervisory board consists of 3 (three) to 5 (five) members. The general meeting elects the members of the supervisory board for a term of 5 (five) years. The members of the supervisory board elect a chairman and, if necessary, a vice chairman from among themselves.
5.11 In the absence of the chairman of the supervisory board the chairman shall be replaced by the vice chairman or a supervisory board member authorised by the chairman.
11.4 Dividends may be paid on the basis of the approved annual report. The procedure for the payment of dividends shall be set out in a resolution of the general meeting.

3.2.3    Add the following clauses to the articles of association:
4.7 The shareholders may vote on the draft resolutions prepared in respect to the items on the agenda of a meeting of shareholders using electronic means prior to the meeting or during the meeting if it is specified in the notice convening the general meeting. The procedure for electronic voting shall be determined by the management board. The notice convening the general meeting shall specify whether electronic voting is possible and the manner for examining the procedure of electronic voting established by the management board. The shareholder who voted using electronic means shall be deemed to have taken part in the meeting and the votes represented by the shareholder’s share shall be accounted as part of the quorum of the meeting unless otherwise provided by law.
5.4.9 Electing and removing the members of the bodies formed by the supervisory board and establishing the work procedure, unless otherwise provided by law.

Introduce a no par value share and approve the new version of AS Harju Elekter articles of association together with the abovementioned changes.

The number of the votes given in favor of the resolution was 10,908,009 which accounted for 95.89 % of the voted participants.

4. Reduction of share capital

The general meeting resolved:
Reduce the share capital of AS Harju Elekter after the entry into force of amendments to the Articles of Association on the following conditions:
4.1    Reduce the share capital of AS Harju Elekter by EUR 1,241,791.60, from EUR 12,417,916 to EUR 11,176,124.40;
4.2    The share capital will be reduced by decreasing the book value of the shares: as a result of reduction, the book value of AS Harju Elekter share will decrease to EUR 0.63, from EUR 0.70, the number of shares will remain the same (17,739,880) and the new amount of share capital will be EUR 11,176,124.40;
4.3    The share capital will be reduced by making monetary a payment to shareholders. Payments to the shareholders shall be made during the term prescribe by law;
4.4    The reason for reducing the share capital is the fact that AS Harju Elekter has no need at the moment or in the near future to own share capital within the registered amount;
4.5    The list of shareholders participating in the reduction of share capital shall be fixed as at 23.59 on 12 May 2016.

The number of the votes given in favor of the resolution was 11,300,441 which accounted for 99.34 % of the voted participants.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

CORRECTION: Notice of the AGM

In the notice condition no 2 of the issuance of balance carried forward after profit distribution is 25,906,764 euros and condition no 4.1 reduce the share capital of AS Harju Elekter by EUR 1,241,791.60

Follows the corrected notice:

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 28 April 2016, beginning at 10 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2015.

To approve the annual report of AS Harju Elekter of 2015, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 66,579 thousand euros as of 31.12.2015, while the sales revenue of the financial year was 60,656 thousand euros and net profit 3,186 thousand euros.

2. Approval to profit distribution.

To approve the profit distribution proposal of AS Harju Elekter of 2015 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2015 23,626,972 euros
total net profit of the financial year  3,190,578 euros
total retained profit on 31.12.2015 26,817,550 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,05 euros per share*)    886,994 euros
increase of reserves     23,792 euros
balance carried forward after profit distribution 25,906,764 euros

The dividends will be paid to the shareholders on 17 May 2016 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 12 May 2016 at 23.59 shall be entitled to dividend.

3. Introducing no par value shares and amendment of the articles of association

3.1 Introduce no par value shares.

3.1.1 In connection with introducing no par value shares, amend clauses 3.1, 3.2 and 11.3 of the articles of association of AS Harju Elekter and confirm their new wording as follows:

3.1 The minimum share capital of the company is EUR 5,000,000 (five million) and the maximum share capital is EUR 20,000,000 (twenty million).

3.2 The minimum number of no par value shares is 8,000,000 and the maximum number is 32,000,000. Each share grants one vote at the general meeting of shareholders. The company only has registered shares. The company only has one class of shares and these give the same rights to the shareholders.

11.3 The shareholders shall be paid a part of the profit (dividend) in accordance with the book value of their shares.

3.1.2 As a result of introducing a no par value share, AS Harju Elekter will have 17,739,880 no par value shares, whereas each share grants the shareholder one vote at the general meeting of shareholders. As a result of adopting the resolution specified in clause 3.1, the book value of an AS Harju Elekter share will be EUR 0.70.

3.2 Adjust the articles of association of AS Harju Elekter and approve its new wording as follows:

3.2.1 Exclude from the articles of association clauses 2.1.5, 2.1.6, 2.1.10, 2.1.11, 3.4, 3.5, 5.13 and 5.14.

3.2.2 Amend clauses 4.3, 5.2, 5.11 and 11.4 of the articles of association and approve these in a new wording as follows:

4.3 The shareholders shall be notified of the annual general meeting no later than three weeks in advance thereof. A notice of the general meeting shall be published in at least one national newspaper no later than three weeks prior to the general meeting.

5.2 The supervisory board consists of 3 (three) to 5 (five) members. The general meeting elects the members of the supervisory board for a term of 5 (five) years. The members of the supervisory board elect a chairman and, if necessary, a vice chairman from among themselves.

5.11 In the absence of the chairman of the supervisory board the chairman shall be replaced by the vice chairman or a supervisory board member authorised by the chairman.

11.4 Dividends may be paid on the basis of the approved annual report. The procedure for the payment of dividends shall be set out in a resolution of the general meeting.

3.2.3 Add the following clauses to the articles of association:

4.7 The shareholders may vote on the draft resolutions prepared in respect to the items on the agenda of a meeting of shareholders using electronic means prior to the meeting or during the meeting if it is specified in the notice convening the general meeting. The procedure for electronic voting shall be determined by the management board. The notice convening the general meeting shall specify whether electronic voting is possible and the manner for examining the procedure of electronic voting established by the management board. The shareholder who voted using electronic means shall be deemed to have taken part in the meeting and the votes represented by the shareholder’s share shall be accounted as part of the quorum of the meeting unless otherwise provided by law.

5.4.9 Electing and removing the members of the bodies formed by the supervisory board and establishing the work procedure, unless otherwise provided by law.

Introduce a no par value share and approve the new version of AS Harju Elekter articles of association together with the abovementioned changes.

4. Reduction of share capital

Reduce the share capital of AS Harju Elekter after the entry into force of amendments to the Articles of Association on the following conditions:

4.1 Reduce the share capital of AS Harju Elekter by EUR 1,241,791.60, from EUR 12,417,916 to EUR 11,176,124.40;

4.2 The share capital will be reduced by decreasing the book value of the shares: as a result of reduction, the book value of AS Harju Elekter share will decrease to EUR 0.63, from EUR 0.70, the number of shares will remain the same (17,739,880) and the new amount of share capital will be EUR 11,176,124.40;

4.3 The share capital will be reduced by making monetary a payment to shareholders. Payments to the shareholders shall be made during the term prescribe by law;

4.4 The reason for reducing the share capital is the fact that AS Harju Elekter has no need at the moment or in the near future to own share capital within the registered amount;

4.5 The list of shareholders participating in the reduction of share capital shall be fixed as at 23.59 on 12 May 2016.

The shareholders whose shares represent at least 1/20 of the share capital may request the inclusion of additional issues to the agenda of the general meeting, provided that the respective request has been submitted in writing no later than by 29 April 2015. The shareholders whose shares represent at least 1/20 of the share capital may submit a written draft of the resolution in respect to each item on the agenda no later than by 11 May 2015. More detailed information available on §287 of the Commercial Code (right of shareholder to information), §293 (2) (right to demand the inclusion of additional issues in the agenda) and §2931 (3) (obligation to submit simultaneously with the request on the modification of the agenda a draft of the resolution or substantiation) and §2931 (4) (right to submit a draft of the resolution in respect to each item on the agenda) about the rules and term of exercising these rights have been published on the homepage of AS Harju Elekter at www.harjuelekter.ee. The drafts of the resolutions and substantiations submitted by the shareholders will be published on the same homepage, if any are received. After the items on the agenda of the general meeting, including additional issues, have been discussed, the shareholders can ask for information from the management board about the activity of the public limited company.

The annual report of 2015, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Str. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 21.04.2016. Registration of the participants starts on 28 April 2016 at 9 a.m.

Please submit the following documents to register the participants of the general meeting: a shareholder that is a natural person – personal identification document; a representative of a shareholder that is a natural person – personal identification document and a written letter of authorisation; a legal representative of a shareholder that is a legal person – an extract of the relevant (commercial) register in which the legal person is registered, and the personal identification document of the representative; a transactional representative of a shareholder that is a legal person is also required to submit a written authorisation issued by the legal representative of the legal person in addition to the above listed documents.

We ask the documents of a legal person registered in a foreign country to be legalised or having an apostil attached to the documents beforehand, unless specified otherwise in an international agreement. AS Harju Elekter may register a shareholder that is a legal person from a foreign country to the general meeting also in case all required information on the legal person and its representative are included in a notarised letter of authorisation issued in the foreign country and the respective letter of authorisation is accepted in Estonia. We ask you to present a passport or an ID-card as a personal identification document.

A shareholder may inform of the appointment of a representative or withdrawal of an authorisation given to a representative before the general meeting by e-mail on yldkoosolek@he.ee or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 27 April 2016 to the secretariat of AS Harju Elekter at Paldiski Str 31 (3rd floor) in Keila.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Audited annual report 2015

The Supervisory Board of AS Harju Elekter approved the audited financial results for the year 2015. The financial results remained unchanged, compared to the preliminary disclosure on 26th of February 2016.

Consolidated sales revenue for the reporting year reached 60.7 million euros, having increased 20% in relation to the comparable period, the consolidated operating profit increased by 47% up to 3.3 million euros and consolidated net profit was 3.2 million euros, decreasing by 67% compared to the previous period.

Audited financial results for the year 2015 as well as the yearbook have been included as attachments to this announcement.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Annual Report 2015

Year Book 2015

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Notice of the AGM

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 28 April 2016, beginning at 10 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2015.

To approve the annual report of AS Harju Elekter of 2015, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 66,579 thousand euros as of 31.12.2015, while the sales revenue of the financial year was 60,656 thousand euros and net profit 3,186 thousand euros.

2. Approval to profit distribution.

To approve the profit distribution proposal of AS Harju Elekter of 2015 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2015 23,626,972 euros
total net profit of the financial year  3,190,578 euros
total retained profit on 31.12.2015 26,817,550 euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,05 euros per share*)    886,994 euros
increase of reserves     23,792 euros
balance carried forward after profit distribution 24,906,764 euros

The dividends will be paid to the shareholders on 17 May 2016 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 12 May 2016 at 23.59 shall be entitled to dividend.

3. Introducing no par value shares and amendment of the articles of association

3.1 Introduce no par value shares.

3.1.1 In connection with introducing no par value shares, amend clauses 3.1, 3.2 and 11.3 of the articles of association of AS Harju Elekter and confirm their new wording as follows:

3.1 The minimum share capital of the company is EUR 5,000,000 (five million) and the maximum share capital is EUR 20,000,000 (twenty million).

3.2 The minimum number of no par value shares is 8,000,000 and the maximum number is 32,000,000. Each share grants one vote at the general meeting of shareholders. The company only has registered shares. The company only has one class of shares and these give the same rights to the shareholders.

11.3 The shareholders shall be paid a part of the profit (dividend) in accordance with the book value of their shares.

3.1.2 As a result of introducing a no par value share, AS Harju Elekter will have 17,739,880 no par value shares, whereas each share grants the shareholder one vote at the general meeting of shareholders. As a result of adopting the resolution specified in clause 3.1, the book value of an AS Harju Elekter share will be EUR 0.70.

3.2 Adjust the articles of association of AS Harju Elekter and approve its new wording as follows:

3.2.1 Exclude from the articles of association clauses 2.1.5, 2.1.6, 2.1.10, 2.1.11, 3.4, 3.5, 5.13 and 5.14.

3.2.2 Amend clauses 4.3, 5.2, 5.11 and 11.4 of the articles of association and approve these in a new wording as follows:

4.3 The shareholders shall be notified of the annual general meeting no later than three weeks in advance thereof. A notice of the general meeting shall be published in at least one national newspaper no later than three weeks prior to the general meeting.

5.2 The supervisory board consists of 3 (three) to 5 (five) members. The general meeting elects the members of the supervisory board for a term of 5 (five) years. The members of the supervisory board elect a chairman and, if necessary, a vice chairman from among themselves.

5.11 In the absence of the chairman of the supervisory board the chairman shall be replaced by the vice chairman or a supervisory board member authorised by the chairman.

11.4 Dividends may be paid on the basis of the approved annual report. The procedure for the payment of dividends shall be set out in a resolution of the general meeting.

3.2.3 Add the following clauses to the articles of association:

4.7 The shareholders may vote on the draft resolutions prepared in respect to the items on the agenda of a meeting of shareholders using electronic means prior to the meeting or during the meeting if it is specified in the notice convening the general meeting. The procedure for electronic voting shall be determined by the management board. The notice convening the general meeting shall specify whether electronic voting is possible and the manner for examining the procedure of electronic voting established by the management board. The shareholder who voted using electronic means shall be deemed to have taken part in the meeting and the votes represented by the shareholder’s share shall be accounted as part of the quorum of the meeting unless otherwise provided by law.

5.4.9 Electing and removing the members of the bodies formed by the supervisory board and establishing the work procedure, unless otherwise provided by law.

Introduce a no par value share and approve the new version of AS Harju Elekter articles of association together with the abovementioned changes.

4. Reduction of share capital

Reduce the share capital of AS Harju Elekter after the entry into force of amendments to the Articles of Association on the following conditions:

4.1 Reduce the share capital of AS Harju Elekter by EUR 1,241,792.60, from EUR 12,417,916 to EUR 11,176,124.40;

4.2 The share capital will be reduced by decreasing the book value of the shares: as a result of reduction, the book value of AS Harju Elekter share will decrease to EUR 0.63, from EUR 0.70, the number of shares will remain the same (17,739,880) and the new amount of share capital will be EUR 11,176,124.40;

4.3 The share capital will be reduced by making monetary a payment to shareholders. Payments to the shareholders shall be made during the term prescribe by law;

4.4 The reason for reducing the share capital is the fact that AS Harju Elekter has no need at the moment or in the near future to own share capital within the registered amount;

4.5 The list of shareholders participating in the reduction of share capital shall be fixed as at 23.59 on 12 May 2016.

The shareholders whose shares represent at least 1/20 of the share capital may request the inclusion of additional issues to the agenda of the general meeting, provided that the respective request has been submitted in writing no later than by 29 April 2015. The shareholders whose shares represent at least 1/20 of the share capital may submit a written draft of the resolution in respect to each item on the agenda no later than by 11 May 2015. More detailed information available on §287 of the Commercial Code (right of shareholder to information), §293 (2) (right to demand the inclusion of additional issues in the agenda) and §2931 (3) (obligation to submit simultaneously with the request on the modification of the agenda a draft of the resolution or substantiation) and §2931 (4) (right to submit a draft of the resolution in respect to each item on the agenda) about the rules and term of exercising these rights have been published on the homepage of AS Harju Elekter at www.harjuelekter.ee. The drafts of the resolutions and substantiations submitted by the shareholders will be published on the same homepage, if any are received. After the items on the agenda of the general meeting, including additional issues, have been discussed, the shareholders can ask for information from the management board about the activity of the public limited company.

The annual report of 2015, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Str. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 21.04.2016. Registration of the participants starts on 28 April 2016 at 9 a.m.

Please submit the following documents to register the participants of the general meeting: a shareholder that is a natural person – personal identification document; a representative of a shareholder that is a natural person – personal identification document and a written letter of authorisation; a legal representative of a shareholder that is a legal person – an extract of the relevant (commercial) register in which the legal person is registered, and the personal identification document of the representative; a transactional representative of a shareholder that is a legal person is also required to submit a written authorisation issued by the legal representative of the legal person in addition to the above listed documents.

We ask the documents of a legal person registered in a foreign country to be legalised or having an apostil attached to the documents beforehand, unless specified otherwise in an international agreement. AS Harju Elekter may register a shareholder that is a legal person from a foreign country to the general meeting also in case all required information on the legal person and its representative are included in a notarised letter of authorisation issued in the foreign country and the respective letter of authorisation is accepted in Estonia. We ask you to present a passport or an ID-card as a personal identification document.

A shareholder may inform of the appointment of a representative or withdrawal of an authorisation given to a representative before the general meeting by e-mail on yldkoosolek@he.ee or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 27 April 2016 to the secretariat of AS Harju Elekter at Paldiski Str 31 (3nd floor) in Keila.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

 

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
Tel: +372 671 2761

Restructuring of AS Harju Elekter subsidiaries in Estonia

At its 5 April 2016 meeting, the Supervisory Board of AS Harju Elekter decided to merge the metal factories of the Group’s Estonian subsidiaries – AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, consolidating the sheet metal processing resources, capability and knowhow of the entire Group into AS Harju Elekter Teletehnika. The merger of factories will be realised over the course of 2016.

The aim of restructuring is to focus the operations of AS Harju Elekter Teletehnika as a manufacturer of competitively priced sheet metal products, both towards the Group’s companies as well as external customers, optimise costs and achieve more efficient use of resources. The outcome of restructuring is significant economy in terms of manufacturing as well as labour costs.

In connection with restructuring, changes were also made in the management bodies of AS Harju Elekter Teletehnika. Management Board of AS Harju Elekter Teletehnika will be expanded to include two members: former manager Urmas Paisnik will continue as a Management Board member; the supervisory board appointed Andre Koit as the second Management Board member, who, due to his appointment to the Management Board, was recalled from the Supervisory Board of the subsidiary on 5 April this year.

Andre Koit was born in 1969 and graduated from the Tallinn University of Technology Department of Machinery as a mechanical engineer. Andre Koit joined the Group in 1993, and has worked as the Chief Operating Officer since 1 January 2015. Starting from 5 April 2016, the composition of the Supervisory Board of AS Harju Elekter Teletehnika will be as follows: Chairman Endel Palla and members Andres Allikmäe, Tiit Atso, Kadri Kassmann, and Jan Osa (Managing Director of AS Harju Elekter Elektrotehnika) as a new member.

After the changes, AS Harju Elekter Teletehnika will focus on the manufacturing of sheet metal products and details for the electrical engineering and telecommunications sector, while also maintaining the production line for telecommunications products and fibre-optic cables.

AS Harju Elekter Elektrotehnika will continue in its current area of activity — the development, production and distribution of electrical equipment for the energy distribution, industrial and construction sectors.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic countries as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%), Estonian ultra-capacitors developer and manufacturer Skeleton Technologies Group OÜ (10%) and in the Finnish publicly listed company PKC Group Oyj (5%).

Andres Allikmäe
Managing Director/CEO
+372 674 7400

 

Prepared by
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Harju Elekter – 50 years of experience in offering solutions for electricity distribution! Harju Elekter Group financial results, 1-12/2015

2015 was a successful year for the Harju Elekter Group. Despite the fact that the economic environment was unstable, we were able to reach the goals we set for ourselves and earned the highest ever sales revenue and operating profit of the Group.

Consolidated sales revenue for the reporting year reached 60.7 million euros, having increased by 10.1 million euros or by 19.9% in relation to the comparable period. The Group’s operating profit in the reporting year was 3.3 million euros, having increased by 1.0 million euros or by 47.0% in relation to the comparable period. The consolidated net profit of 2015 was 3.2 (2014: 9.8) million euros. The Group’s sales revenue in the accounting quarter was 15.0 million euros, increasing by 6.1% or 0.8 million euros compared to the reference period. When comparing the results of the reporting period to the last year, the following circumstances had the greatest impact: in the financial results of 2014, the operations of Finnkumu Oy (acquired in June 2014) were only represented in the second half; also the net profit of the 12 months of 2014 included the consolidated profit of the associated company AS Draka Keila Cables in the amount of 0.8 million euros. The net profit of 2014 was impacted by the extraordinary revenues from the sales of financial investments. This includes the financial income of 1.8 million euros from the sales of the AS Draka Keila Cables minority holding and 4.6 million euros from the sales of the shares of PKC Group Oyj. Not including the extraordinary incomes from the sales of financial investments, the comparable 12-months net profit of 2014 was 3.4 million euros and of the current reporting period, 3.2 million euros.

October – December change January – December change
(thousand euros) 2015 2014 % 2015 2014 %
Revenue 15,030 14,166 6.1 60,656 50,606 19.9
Gross profit 2,079 2,222 -6.4 10,299 9,081 13.4
EBITDA 498 657 -24.2 4,819 3,741 28.8
EBIT 79 282 -72.0 3,276 2,228 47.0
Profit for the period

-16

253

-106.3

3,186

9,778

-67.4

incl attributed to Owners of the Company

-8

232

-103.2

3,190

9,697

-67.1

There has been a growth in sales revenue among almost all products and services. In the reporting quarter like in the reference period, 91% and in 12-months period, 92% (2014: 91%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 9% and 8% of the consolidated sales volume, respectively. 86% (Q4 2014: 87%) of the reporting quarter revenue originated from the sale of electrical equipment. There was 12.9 million euros worth of electrical equipment sold in the reporting quarter, which was 0.5 million euros or more than 4% more than in the comparison quarter, with sales of electrical equipment growing up more than one fifth to 52.1 (2014: 42.9) million euros in the 12-months period and formed 94% of the total sales revenue of Manufacturing segment.

In Q4 2015 as well as in 12-months, 77% (2014: 70%) of the Group’s products and services were sold in foreign markets, outside Estonia. Finland is the biggest market of the Group; accordingly, the sales volumes of the Group are strongly influenced by the events taking place on this market. In 12 months, 64% (2014: 58%) of the Group’s products and services were sold on the Finnish market. The sales in Finnish market grew by 9.4 million euros during a year. During the year, 23% (2014: 30%) of the Group’s products and services were sold on the Estonian market. Year on year, supply to the Estonian market decreased by 1 million euros or 6.5%. The decline was mainly caused by decreased investments in the energy distribution sector in Estonia starting from 2014. Despite this, the Estonian companies’ sales revenue outside the Group has remained at the levels of the comparative period. Sales to the Lithuanian market have decreased from year to year and this is due a change in the Lithuanian subsidiary’s sales strategy, as a result of which the main focus is on export markets. In the reporting year, the share of foreign markets in the subsidiary’s sales revenues grew to 93% (2014: 81%). Sales to the Norwegian market in the reporting year have grown 2.3 times or by 2.2 million euros, to 3.9 million euros. In addition, the company has grown the volume of its sales to the Finnish market. The United States was added as a new market.

Operating expenses increased 7% in the reporting quarter and 19% in the 12-months period compared to the reference periods. Cost of sales increased by 8% up to 13.0 million euros in the reporting quarter and by 21% up to 50.4 million euros during 12-months period. Distribution costs stood stable as a year ago; the rate of distribution costs to revenue accounted for 4.4% (2014: 5.4%). Administrative expenses increased by 73,000 euros up to 1.2 million euros in the reporting quarter and during 12-months period by 0.3 million euros to 4.3 million euros, at the same time the rate of administrative expenses to revenue decreased and accounted for 7.2% (2014: 8.0%).

In Q4 2015, the average 463 (Q4 2014: 465) people worked in the Group and in 12-months period, the average number of employees was 472 (2014: 459). In the accounting quarter, employee wages and salaries totalled 2.4 (Q4 2014: 2.5) million euros and during 12 months 9.7 (2014: 9.2) million euros. The average wages per employee per month amounted to 1,712 (2014: 1,669) euros.

In the fourth quarter the gross profit of the Group was 2.1 (Q4 2014: 2.2) million euros. The gross profit margin was 13.8% being 1.9 per cent point lower compering to the same period a year before. The annual stock-taking assesses and adjusts the costs of receivables, assets and reserves as well as seasonality are the reasons of which the profitability in the last quarter of the year is lower than usual. In the 12-months period, the gross profit of the Group was 10.3 (2014: 9.1) million euros and the gross profit margin was 17.0%, being 0.9 percent point lower comparing to the reference period.

The Group’s operating profit in the reporting quarter was 79 (Q4 2014: 282) thousand euros and EBITDA 498 (Q4 2014: 657) thousand euros. Return of sales for the accounting quarter was 0.5% (Q4 2014: 2.0%) and return of sales before depreciation 3.3% (Q4 2014: 4.7%).

In 12-months period, EBITDA increased by 1.1 million euros to 4.8 million euros and operating profit by 1.0 million euros to 3.3 million euros. Return of sales before depreciation was 7.9% (2014: 7.4%) and return of sales 5.4% (2014: 4.4%).

In April, PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 766 (2014: 906) thousand euros. In total, financial investments yielded a profit of 0.8 million euros during twelve months, which was 4.8 million euros lower than in the comparable period. In Q2 2014, 200,000 shares of PKC Group Oyj were sold and the financial income from selling the shares was 4.6 million euros. AS Harju Elekter sold it’s holding in associated company AS Draka Keila Cables on 9 July 2014. The transaction earned 1.8 million euros of financial income and an additional profit of 0.8 million euros was consolidated from the company. In total, a revenue of 2.6 million euros was made by the associated company in last year.

On balance, the profit for the reporting quarter before tax was 118 (Q4 2014: 304) thousand euros. The income tax assessed for the reporting quarter was 134 (Q4 2014: 51) thousand euros. The consolidated net loss for the reporting quarter was 16,000 euros, of which the share of the Owners of the Company was 8,000 euros. During the comparative period, the net profit was 253,000 euros, of which the share of the Owners of the Company was 232,000 euros.

The consolidated net profit of the year 2015 was 3.2 (2014: 9.8) million euros, included attributed to Owners of the Company 3.2 (2014: 9.7) million euros. The net profit margin was established at 5.3% (2014: 19.3%). EPS was 0.18 (2014: 0.56) euros.

During the 12-months period, the Group’s investments to non-current assets totalled 4.9 (2014: 6.7, incl through business combinations 4.9) million euros.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-12/2015

STATEMENT OF FINANCIAL POSITION, 31.12.2015
Consolidated, unaudited
EUR’000
ASSETS 31.12.15 31.12.14
Cash and cash equivalents 5 711 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 6 678 6 484
Prepayments 278 455
Prepaid income tax 28 79
Inventories 7 148 8 104
TOTAL CURRENT ASSETS 19 843 25 141
Deferred income tax asset 57 0
Other long-term financial investments 20 188 19 145
Investment property 12 980 12 109
Property, plant and equipment 8 020 7 968
Intangible assets 5 491 5 429
TOTAL NON-CURRENT ASSETS 46 736 44 651
TOTAL ASSETS 66 579 69 792
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 296 278
Trade payables and other payables 5 350 6 146
Liabilities in fair value 713 843
Tax liabilities 944 1 072
Income tax liabilities 146 12
Short-term provision 14 39
TOTAL CURRENT LIABILITIES 7 463 8 390
NON-CURRENT LIABILITIES 912 1 560
TOTAL LIABILITIES 8 375 9 950
Share capital 12 418 12 180
Share premium 804 240
Restricted reserves 18 047 19 393
Retained earnings 26 817 26 664
TOTAL OWNERS’ EQUITY 58 086 58 477
Non-controlling interests 118 1 365
TOTAL EQUITY 58 204 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 66 579 69 792
STATEMENT OF PROFIT AND LOSS, 1-12/2015
Consolidated,unaudited
EUR’000 Q4 2015 Q4 2014 12m 2015 12m 2014
NET SALES 15 030 14 166 60 656 50 606
Cost of goods sold -12 951 -11 944 -50 357 -41 525
Gross profit 2 079 2 222 10 299 9 081
Marketing expenses -696 -745 -2 657 -2 720
Administrative expenses -1 249 -1 176 -4 337 -4 042
Other revenue 4 11 70 27
Other expenses -59 -30 -99 -118
Operating profit 79 282 3 276 2 228
Finance income 48 34 835 5 661
Finance costs -9 -12 -49 -38
Income from subsidiaries 0 0 0 2 602
Profit before income tax 118 304 4 062 10 453
Income tax expense -134 -51 -876 -675
Profit for the period, attributable to -16 253 3 186 9 778
   owners of the Company -8 232 3 190 9 697
   non-controlling interest -8 21 -4 81
Basic earnings per share  (EUR) 0,00 0,01 0,18 0,56
Diluted earnings per share  (EUR) 0,00 0,01 0,18 0,56

Interim report 1-12/2015

Tiit Atso
CFO
+372 674 7422

Publication of financial reports in 2016

AS Harju Elekter wishes to the shareholders Happy Holidays and informs you that in the year 2016, the consolidated financial results of AS Harju Elekter will be published as following:

2015 4Q results                      26.02.2016
2016 1Q results                      28.04.2016
AGM                                         28.04.2016
2016 2Q results                      28.07.2016
2016 3Q results                      27.10.2016

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Harju Elekter Group financial results, 1-9/2015

04.11.2015

Harju Elekter Group financial results, 1-9/2015

The Group’s sales revenue in the accounting quarter was 18.1 (Q3 2014: 15.7) million euros. During the accounting quarter, sales revenue increased by 9% or 1.5 million euros compared to the previous quarter, and 15% or 2.4 million euros in relation to the comparison period. In 9-months, the Group’s sales revenue was 45.6 million euros, increasing by 25% compared to the previous period. The consolidated net profit of the 9M 2015 was 3.2 (9M 2014: 9.5) million euros. When comparing the results of the reporting period to the last year, the following circumstances had the greatest impact: in the financial results of 2014, the operations of Finnkumu Oy (acquired in June 2014) were only represented in the 3rd quarter; also the net profit of the 9 months of 2014 included the consolidated profit of the associated company AS Draka Keila Cables in the amount of 0.8 million euros. The net profit of 2014 was impacted by the extraordinary revenues from the sales of financial investments. This includes the revenue of 1.8 million euros from the sales of the AS Draka Keila Cables minority holding and 4.6 million euros from the sales of the shares of PKC Group Oyj. Not including the extraordinary revenues from the sales of financial investments, the comparable 9-months net profit of 2014 was 3.1 million euros and of the current reporting period, 3.2 million euros.

Change July-September Change January-September Year
(thousand euros) % 2015 2014 % 2015 2014 2014
Revenue 15.3 18,091 15,687 25.2 45,626 36,440 50,606
Gross profit 6.1 3,441 3,242 19.9 8,220 6,858 9,081
EBITDA 14.4 2,181 1,907 40.1 4,321 3,084 3,741
EBIT 17.1 1,788 1,527 64.4 3,197 1,945 2,228
Profit for the period -49.4 1,620 3,200 -66.4 3,203 9,525 9,778
incl attributed to Owners of the Company -47.5 1,627 3,102 -66.2 3,199 9,463 9,697

There has been a growth in sales revenue among almost all products and services. In the reporting quarter, 93% (Q3 2014: 92%) and in 9-months period, 92% (9M 2014: 90%) of sales revenue was earned from the Manufacturing segment, and Real Estate and Unallocated activities contributed 7% and 8% of the consolidated sales volume, respectively. 88% (Q3 2014: 87%) of the reporting quarter sales revenue originated from the sale of electrical equipment. There was 15.9 million euros worth of electrical equipment sold in the reporting quarter, which was 2.2 million euros or 16% more than in the comparison quarter, with sales of equipment growing up to 39.2 (9M 2014: 30.5) million euros in the 9-months period and formed 86% of the total sales revenue. The biggest contribution to the increase of electrical equipment sales volume came from Finnkumu Oy as well as from UAB Rifas. A significant growth came from the sales to the Norwegian market, which was 3.2 (9M 2014: 1.0) million euros.

In nine months, 77% (9M 2014: 70%) of the Group’s products and services were sold in foreign markets, outside Estonia and in the reporting quarter 77% (Q3 2014: 76%). Finland is the biggest market of the Group; accordingly, the sales volumes of the Group are strongly influenced by the events taking place on this market. In nine months, 63% of the Group’s products and services were sold on the Finnish market (9M 2014: 57%). The share of the Finnish market in the consolidated sales revenue has grown 1 percentage point in the accounting quarter and 6 percentage points during the 9-months period when compared to the respective periods of 2014. At the same time, the share of the Estonian market in the consolidated sales decreased during a year by 7 percentage points to 23.5%. The decline was mainly due to decrease in orders for the sales of low-voltage electrical equipment.

Operating expenses increased 16% in the reporting quarter and 23% in the 9-months period compared to the reference periods. Cost of sales increased by 18% up to 14,650 thousand euros in the reporting quarter and by 26% up to 37,406 thousand euros during 9-months period. Distribution costs decreased to 1,961 thousand euros in the 9-months period; the rate of distribution costs to revenue accounted for 4.3% (9M 2014: 5.4%). Administrative expenses increased during nine months by 223,000 euros to 3,088 thousand euros, at the same time the rate of administrative expenses to revenue decreased and accounted for 6.8% (9M 2014: 7.9%).

In Q3 2015, the average 479 (Q3 2014: 471) people worked in the Group and in 9-months period, the average number of employees was 475 (9M 2014: 451). In the third quarter, employee wages and salaries totalled 2,454 (Q3 2014: 2,361) thousand euros and during the first 9 months 7,256 (9M 2014: 6,692) thousand euros. The average wages per employee per month amounted to 1,696 (9M 2014: 1,647) euros.

In the third quarter the gross profit of the Group was 3,441 (Q3 2014: 3,242) thousand euros. The gross profit margin was 19.0% being 1.7 per cent point lower compering to the same period a year before. In the 9-months period, the gross profit of the Group was 8,220 (9M 2014: 6,858) thousand euros and the gross profit margin was 18.0% being 0.8 percent point lower comparing to the reference period.

The Group’s operating profit in the reporting quarter was 1,788 (Q3 2014: 1,527) thousand euros and EBITDA 2,181 (Q3 2014:1,907) thousand euros. Return of sales for the accounting quarter was 9.9% (Q3 2014: 9.7%) and return of sales before depreciation 12.1% being on the same level as a year before.

In 9-months period, EBITDA increased by 1,237 thousand euros to 4,321 (9M 2014: 3,084) thousand euros and operating profit by 1,252 thousand euros to 3,197 (9M 2014: 1,945) thousand euros. Return of sales before depreciation was 9.5% (9M 2014: 8.5%) and return of sales 7.0% (9M 2014: 5.3%).

In April, PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 766 (Q2 2014: 906) thousand euros. In total, financial investments yielded a profit of 785 thousand euros during nine months, which was 4,839 thousand euros lower, than in the comparable period. In Q2 2014, 200,000 shares of PKC Group Oyj were sold and the financial income from selling the shares was 4,616 thousand euros.

AS Harju Elekter sold its holding in AS Draka Keila Cables on 9 July 2014. The transaction earned 1,785 thousand euros of financial income and an additional profit of 817,000 euros was consolidated from the company. In total, a revenue of 2,602 thousand euros was made by the associated company in the 9 months of last year.

In Q3 2015, the consolidated net profit was 1,620 (Q3 2014: 3,200) thousand euros, of which the share of the owners of the Company was 1,627 (Q3 2014: 3,102) thousand euros. The net profit margin was established at 9.0% (Q3 2014: 20.4%). EPS in the Q3 was 0.09 (Q3 2014: 0.18) euros.

Overall, the consolidated net profit of the 9-months period was 3,203 (9M 2014: 9,525) thousand euros. The share of the owners of the Company was 3,199 (9M 2014: 9,463) thousand euros. The net profit margin was established at 7.0% (9M 2014: 26.1%). In 9-months period, EPS was 0.18 (9M 2014: 0.54) euros.

During the 9-months period, the Group’s investments to non-current assets totalled 4.7 (9M 2014: 5.8, incl through business combinations 4.9) million euros.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-9/2015

AS HARJU ELEKTER
BALANCE SHEET, 30.09.2015
Consolidated, unaudited
Group
EUR’000
ASSETS 30.09.15 31.12.14
Cash and cash equivalents 2 030 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 9 904 6 484
Prepayments 416 455
Prepaid income tax 60 79
Inventories 9 668 8 104
TOTAL CURRENT ASSETS 22 078 25 141
Other long-term financial investments 20 133 19 145
Investment property 13 053 12 109
Property, plant and equipment 8 239 7 968
Intangible assets 5 430 5 429
Total non-current assets 46 855 44 651
TOTAL ASSETS 68 933 69 792
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 632 278
Trade payables and other payables 6 711 6 989
Tax liabilities 1 402 1 072
Income tax liabilities 58 12
Short-term provision 9 39
TOTAL CURRENT LIABILITIES 8 812 8 390
NON-CURRENT LIABILITIES 1 956 1 560
TOTAL LIABILITIES 10 768 9 950
Share capital 12 418 12 180
Share premium 804 240
Restricted reserves 17 980 19 393
Retained earnings 26 826 26 664
TOTAL OWNERS’ EQUITY 58 028 58 477
Non-controlling interests 137 1 365
TOTAL EQUITY 58 165 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 68 933 69 792
INCOME STATEMENT,  1-9/2015
Consolidated,unaudited
EUR’000
GROUP Q3 2015 Q3 2014 9m 2015 9m 2014
NET SALES 18 091 15 687 45 626 36 440
Cost of goods sold -14 650 -12 445 -37 406 -29 582
Gross profit 3 441 3 242 8 220 6 858
Marketing expenses -614 -680 -1 961 -1 976
Administrative expenses -1 035 -966 -3 088 -2 865
Other revenue 5 -20 66 16
Other expenses -9 -49 -40 -88
Operating profit 1 788 1 527 3 197 1 945
Finance income 3 79 788 5 627
Finance costs -11 -9 -40 -25
Income from subsidiaries 0 1 787 0 2 602
Profit from normal operations 1 780 3 384 3 945 10 149
Corporate Income tax -160 -184 -742 -624
Profit for the period, attributable to 1 620 3 200 3 203 9 525
   owners of the Company 1 627 3 102 3 199 9 463
   non-controlling interest -7 98 4 62
Basic earnings per share  (EUR) 0,09 0,18 0,18 0,54
Diluted earnings per share  (EUR) 0,09 0,18 0,18 0,54

Interim report 1-9/2015

Tiit Atso
CFO
+372 674 7422

Harju Elekter Group financial results, 1-6/2015

The Group’s sales revenue in the accounting quarter was 16.6 (H1 2014: 11.1) million euros and in 6- months period 27.5 (H1 2014: 20.8) million euros. During the reporting quarter, sales revenue increased by 52% or 5.6 million euros compared to the previous quarter, and 50% or 5.5 million euros in relation to the comparison period. The consolidated net profit of the H1 2015 was 1.6 million euros. The results of the first six months of the year were the most affected by the following circumstances: the reporting period that is compared does not reflect the business results of Finnkumu Oy (acquired in June 2014); the net profit of the first six months of 2014 include the financial income from the sale of PKC Group Oyj shares at 4.6 million euros and the consolidated profit of 0.8 million euros from the related company (AS Draka Keila Cables).

Change April – June Change January – June Year
(thousand euros) % 2015 2014 % 2015 2014 2014
Revenue 49.6 16,590 11,092 32.7 27,535 20,753 50,606
Gross profit 60.3 3,081 1,922 32.1 4,779 3,616 9,081
EBITDA 137.9 1,751 736 81.8 2,139 1,177 3,741
EBIT 281.2 1,380 362 236.8 1,408 418 2,228
Profit for the period -73.6 1,573 5,954 -75.0 1,583 6,325 9,778
incl attributed to Owners of the Company -73.9 1,557 5,970 -75.3 1,572 6,361 9,697

There has been a growth in sales revenue among almost all products and services. 91% of sales income was earned from the Production segment, and Real Estate together with other areas of activity contributed 9% of the consolidated sales volume.87%(Q2 2014: 81%) of the reporting quarter sales revenue originated from the sale of electrical equipment. There was 14.4 million euros worth of electrical equipment sold in the reporting quarter, which was 5.4 million euros or 59% more than in the comparison quarter, with sales of equipment growing 38% in the 1st half of the year, to 23.3 million euros. The biggest contribution to the increase of sales volume came from Finnkumu Oy, whose sales income not included in H1 2014 results and from UAB Rifas, whom realized a one large-scale project to Norwegian market in the reporting quarter.

In H1 2015, 76% (H1 2014: 65%) of the Group’s products and services were sold in foreign markets, outside Estonia and in the reporting quarter 79% (Q2 2014: 67%). Finland is the biggest market of the Group and 61% (H1 2014: 50%) of the Group’s products and services were sold on the Finnish market in first half of the year. The share of the Finnish market in the consolidated sales revenue has grown 9 percentage points in the second quarter and 11 percentage points during the half-year when compared to the respective periods of 2014. The share of the Estonian market in the consolidated sales decreased during a year by 10.5 percentage points to 24.1%. The decline was mainly due to the non-performance of the contractual order volume by Eesti Energia, which was one third less than in the comparable period.

Operating expenses increased 41% in the reporting quarter and 29% in the first half of the year compared to the reference periods. Cost of sales increased 47% in the reporting quarter. Since the sales revenue of the reporting quarter increased at a pace that exceeded the cost of sales, improved the gross profit margin. The cost of sales increased 33% during the first six months, at the same pace sales revenue. In H1, distribution cost as well as administrative expenses increased marginally and the rates to revenue decreased accounted  4.9%  (H1 2014: 6.2%) and 7.5% (H1 2014: 9.2%), respectively.

In Q2 2015, the average 481 people worked in the Group − on the average by 37 persons more than in the reference period. In the first half of the year, the average number of employees increased by 32 to 474. During the first 6 months employee wages and salaries totalled 4,802 (H1 2014: 4,331) thousand euros. The average wages per employee per month amounted to 1,714 (H1 2013: 1,633) euros.

In the second quarter the gross profit of the Group was 3,081 (Q2 2014: 1,922) thousand euros. The gross profit margin was 18.6% being 1.3 per cent point better compering to the same period a year before. In the first half of the year, the gross profit of the Group was 4,779 (H1 2014: 3,616) thousand euros and the gross profit margin was 17.4% being on the same level as a year before.

The Group’s operating profit in the reporting quarter was 1,380 (Q2 2014: 362) thousand euros and EBITDA 1,751 (Q2 2014: 736) thousand euros. Return of sales for the accounting quarter was 8.3% (Q2 2014: 3.3%) and return of sales before depreciation 10.6% improving by 4.0 per cent point, compering to the same period a year before.

In H1 2015, EBITDA increased by 962 thousand euros to 2,139 thousand euros and operating profit by 990 thousand euros to 1,408 thousand euros. Return of sales before depreciation 7.8% (H1 2014: 5.7%) and return of sales 5.1% (H1 2014: 2.0%).

PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 766 (Q2 20134 906) thousand euros. In total, financial investments yielded a profit of 785 thousand euros in the first half of the year, which was 4,763 thousand euros lower, than in the comparable period. In Q2 2014, 200,000 shares of PKC Group Oyj were sold.

The consolidated net profit of the Q2 2015 was 4,573 (Q2 2014: 5,954) thousand euros, of which the share of the owners of the Company was 1,557 (Q2 2014: 5,970) thousand euros. EPS in the Q2 was 0.09 (Q2 2014: 0.34) euros.

Overall, the consolidated net profit of the H1 2015 was 1,583 (H1 2014: 6,325) thousand euros. The share of the owners of the Company was 1,572 (H1 2014: 6,361) thousand euros. In H1, EPS was 0.09 (H1 2014: 0.37) euros.

During the 6-months period, the Group’s investments to non-current assets totalled 4.5 (H1 2014: 4.0, incl through business combinations 3.3) million euros.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-6/2015

 

AS HARJU ELEKTER
BALANCE SHEET, 30.06.2015
Consolidated, unaudited
Group
EUR’000
ASSETS 30.06.15 31.12.14
Cash and cash equivalents 2 263 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 8 914 6 484
Prepayments 688 455
Prepaid income tax 49 79
Inventories 11 141 8 104
TOTAL CURRENT ASSETS 23 055 25 141
Other long-term financial investments 24 128 19 145
Investment property 13 165 12 109
Property, plant and equipment 8 294 7 968
Intangible assets 5 448 5 429
Total non-current assets 51 035 44 651
TOTAL ASSETS 74 090 69 792
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 1 641 278
Trade payables and other payables 8 572 6 989
Tax liabilities 1 104 1 072
Income tax liabilities 271 12
Short-term provision 4 39
TOTAL CURRENT LIABILITIES 11 592 8 390
NON-CURRENT LIABILITIES 1 956 1 560
TOTAL LIABILITIES 13 548 9 950
Share capital 12 180 12 180
Unregistered share capital 238 0
Share premium 804 240
Restricted reserves 21 976 19 393
Retained earnings 25 200 26 664
TOTAL OWNERS’ EQUITY 60 398 58 477
Non-controlling interests 144 1 365
TOTAL EQUITY 60 542 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 74 090 69 792
INCOME STATEMENT,  1-6/2015
Consolidated,unaudited
EUR’000
GROUP    Q2 2015   Q2 2014    H1 2015    H1 2014
NET SALES 16 590 11 092 27 535 20 753
Cost of goods sold -13 509 -9 170 -22 756 -17 137
Gross profit 3 081 1 922 4 779 3 616
Marketing expenses -663 -646 -1 347 -1 296
Administrative expenses -1 028 -929 -2 054 -1 899
Other revenue 7 26 61 35
Other expenses -17 -11 -31 -38
Operating profit 1 380 362 1 408 418
Finance income 771 5 531 785 5 548
Finance costs -22 -9 -29 -16
Income from subsidiaries 0 491 0 815
Profit from normal operations 2 129 6 375 2 164 6 765
Corporate Income tax -556 -421 -581 -440
Profit for the period, attributable to 1 573 5 954 1583 6 325
   owners of the Company 1 557 5 970 1572 6 361
   non-controlling interest 16 -16 11 -36
Basic earnings per share  (EUR) 0,09 0,34 0,09 0,37
Diluted earnings per share  (EUR) 0,09 0,34 0,09 0,37

Interim report 1-6/2015

Tiit Atso
CFO
+372 674 7422

Registration of the share capital increase in the Commercial Register

Pursuant to decision (No 4.12 and 4.13) of the annual general meeting of the shareholders of AS Harju Elekter held on 14 May 2015, the subscription deadline of 600,000 share options under the share option programme, which was directed to the members of the directing bodies, leading specialists and engineers of companies within the same group with AS Harju Elekter and the members of the management board of affiliated companies of AS Harju Elekter, was 16–30 June 2015.

In so far as 339,880 shares have been subscribed by the end of the subscription period of 30 June 2015. In connection with performing the option contracts, the share capital of AS Harju Elekter increased by EUR 237,916 for which purpose 339,880 new ordinary shares, with a nominal value of EUR 0.70, was issued. The share capital increase was registered in the Commercial Register on 22 July 2015.

 

Andres Allikmäe

Managing Director/CEO

+372 674 7400

 

Prepared by:

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

AS Harju Elekter acquired a 10% holding in the ultracapacitors’ manufacturer Skeleton Technologies Group OÜ.

At its 2 June 2015 meeting, the Supervisory Board of AS Harju Elekter decided to approve a strategic investment in Skeleton Technologies Group OÜ, a company developing and manufacturing ultracapacitors, by acquiring a 10% holding in the company. According to the agreement and based on the fact that the transaction is not relevant for the purpose of the Stock Exchange Rules, the parties will not disclose the value of the transaction.

AS Harju Elekter sees the attractiveness of the given innovative investment in both, an increase of its value as well as the possible participation of the company in the development, production and use of the modular systems of ultra-capacitors in the management and switching systems.

Over the last 8 years, the market of ultracapacitors has increased 30% per year and the respective storage and switching solutions are in the focus in terms of both their energy efficiency as well as renewable energy developments. Ultracapacitors are environmentally friendly and cost-efficient energy storage devices, which are suitable for storing and discharging large amounts of energy in a short period of time. Ultracapacitors can survive more than a million charge and discharge cycles at the temperatures from -40 °C to +65 °C and can achieve the power density of an above 60 kW/kg, which exceeds several times the power of batteries.

Skeleton started to develop the production of ultracapacitors, devised and patented by the Estonian scientists, in 2009 and has reached a technological level, which enables to hold notably more power in smaller dimensions compared to the products offered at the market. The technology is protected with 5 patent families, covering the entire product, starting from the materials used up to the manufacturing technology. Skeleton’s customer portfolio includes several leading automotive companies, developers of electric energy and renewable energy solutions as well as the European Space Agency.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in the Finnish publicly listed company PKC Group Oyj (5%).

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ Tallinn’s Rules and Regulations.

 

Andres Allikmäe

Managing Director/CEO

+372 674 7400

Additional information: Andres Allikmäe, Managing Director of AS Harju Elekter; Endel Palla, Chairman of the Supervisory Board (+372 674 7400).

Prepared by:

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

Termination of the contract of service of the managing director of a subsidiary

After 10 years of service as the managing director of AS Harju Elekter Elektrotehnika, Mr Ülo Merisalu, the head of the biggest subsidiary of AS Harju Elekter, will be leaving his post. Starting from 1 June 2015, the position of management board member and the tasks and responsibilities of the head of the subsidiary will be assumed by the marketing director of AS Harju Elekter Elektrotehnika, Mr Jan Osa.

Mr Osa is a graduate of the Tallinn Polytechnic School in the field of electrical equipment of industrial companies (1989) and of the Tallinn University of Technology in industrial automation and robotics (1994). He has worked in the Harju Elekter Group since 1994; as the marketing director of AS Harju Elekter Elektrotehnika starting from 1996.

AS Harju Elekter and AS Harju Elekter Elektrotehnika are grateful for the contribution that Mr Ülo Merisalu, as a managing director of AS Harju Elekter Elektrotehnika, has made to the development of the company.

 

Andres Allikmäe

Managing Director/CEO

+372 674 7400

 

Prepared by:

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

Resolutions of AGM

Today, on 14 May 2015 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 84 shareholders and their authorised representatives who represented the total of 12,392,987 votes accounting for 71.22 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2014;
2. Approval to profit distribution;
3. Appointment and remuneration of auditors;
4. Increasing the share capital

  1. Approval to AS Harju Elekter annual report of the year 2014

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2014, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 69,792 thousand euros as of 31.12.2014, while the sales revenue of the financial year was 50,606 thousand euros and net profit 9,697 thousand euros.

The number of the votes given in favor of the resolution was 12,392,987 which accounted for 100.00 % of the voted participants.

  1. Approval to profit distribution

    The general meeting resolved:
    To approve the profit distribution proposal of AS Harju Elekter of 2014 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2014 16,967 thousand euros
total net profit of the financial year  9,697 thousand euros
total retained profit on 31.12.2014 26,664 thousand euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,15 euros per share*)  2,610 thousand euros
balance carried forward after profit distribution 24,054 thousand euros

The dividends will be paid to the shareholders on 3 June 2015 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 28 May 2015 at 23.59 shall be entitled to dividend.

The number of the votes given in favor of the resolution was 12,375,417 which accounted for 99.86 % of the voted participants.

  1. Appointment and remuneration of auditors

The general meeting resolved:
To appoint KPMG Baltics OÜ, register code 10096082 to perform the audit of AS Harju Elekter on the years 2015-2017. Consent obtained. The auditor will be remunerated according to the agreement.

The number of the votes given in favor of the resolution was 12,376,787 which accounted for 99.87 % of the voted participants.

  1. Increasing the share capital

The general meeting resolved:
4.1 According to the AGM decision No. 6 from 3 May 2012, to realize the targeted share issue (share option) program, which was directed to the members of the directing bodies, leading specialists and engineers of companies within the same group with AS Harju Elekter and the members of the management board of affiliated companies of AS Harju Elekter.

4.2 To increase the share capital by 420,000 (four hundred twenty one thousand) euros up to 12,600,000 (twelve million six hundred thousand) euros, by issuing new shares by monetary contributions.

4.3 Increase the share capital by issuing 600 000 (six hundred thousand) new ordinary shares with nominal value 0.70 euros.

4.4 In accordance with the decision of the AGM No 6 clause 6.4 from 3rd of May 2012, the issue price of the share is 2.36 euros per share including issue premium in the amount of 1,66 euros.

4.5 In accordance with the decision of the AGM No 4 clause 6.3 from 3rd of May 2012, the pre-emption of the current shareholders to subscribe for new shares is precluded.

4.6 In accordance with the decision of the AGM No 6 clause 6.6 and 6.7 from 3rd of May 2012, the right to subscribe for new shares have the persons with whom have been concluded the preliminary contract and which is valid at the time of subscription for shares, taking into consideration the differences in the decision of the AGM No 6 clause 6.7 from 3rd of May 2012 due to retirement.

4.7 Subscription for the shares to be issued shall be during the time period of 16.06-30.06.2015.

4.8 The Management Board shall send out the subscription notice to the persons, specified in clause 4.6 herein, within 14 calendar days after the adoption of this resolution.

4.9 Subscription for the shares shall be taken place at the premises of the management board of AS Harju Elekter at the address Paldiski mnt 31, 76606 KEILA, on working days from 10.00-14.00.

4.10 In accordance with the decision of the AGM No 6 clause 6.8 from 3rd of May 2012 the payment for the shares to be subscribed for shall be made before the subscription by transferring the above mentioned amount to the bank account of AS Harju Elekter, a/c no EE172200221011207998 Swedbank, presenting upon subscription a payment document, evidencing the payment for the shares to the extent of the shares to be subscribed for.

4.11 In accordance with the decision of the AGM No 6 clause 6.14 from 3rd of May 2012, new shares shall give the right to receive dividends as of the financial year of 2015.

4.12 Authorize the management board of AS Harju Elekter within 15 days from the end of the subscription period to cancel the shares which have not been subscribed or which have not been paid for at the end of subscription and payment period.

4.13 In accordance with the clause 4.12 herein, in case of cancelling the shares by the management board of AS Harju Elekter, the share capital shall be increased in the amount less of nominal value of the cancelled shares and the number of shares issued.

The number of the votes given in favor of the resolution was 12,104,448 which accounted for 97.67 % of the voted participants.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

 

29.04.2015

Financial results, 1-3/2015

In Q1 2015, AS Harju Elekter was affected by normal seasonality. Finnkumu Oy was consolidated and added to the Group’s results; although, compared to last year, the profit from AS Draka Keila Cables was no longer consolidated. A decline in the Estonian segment was mostly due to the non-performance of the contractual order volume by Eesti Energia.

  January – March Year
  2015 2014 2014
Revenue (EUR’000) 10,945 9,661 50,606
Gross profit (EUR’000) 1,698 1,701 9,081
EBITDA (EUR’000) 388 441 3,741
EBIT (EUR’000) 29 56 2,228
Profit for the period (EUR’000) 10 371 9,778
incl attributed to Owners of the Company 16 391 9,697

In the accounting quarter, the Group’s consolidated revenue was 10.9 million euros, which was 13.3% compared to the reference period. 90% of sales income was earned from the Production segment, and Real Estate together with other areas of activity contributed 10% of the consolidated sales volume.

There has been a growth in sales revenue among almost all products and services. More than 91% of sales revenue originated from the sale of electrical equipment, having increased 14% in the reporting quarter. 72% of the Group’s products and services were sold in foreign markets, outside Estonia (Q1 2014: 64%). Finland is the biggest market of the Group. In the reporting quarter, 56% of the Group’s products and services were sold in Finland (Q1 2014: 45%). The sales volume of Estonian segment has decreased by 11.2%.

In the reporting quarter, the operating expenses increased by 14.3%. Since the cost of sales increased at a pace that exceeded the sales revenue, the gross profit margin decreased by 2.1 percentage points in comparison to the indicator for the comparable period. Because of the Group’s Estonian and Finnish subsidiaries participation in Tampere energy fair, the distribution costs increased by 33,000 euros to 684,000 euros, the rate of distribution costs to revenue accounted for 6.2% (Q1 2014: 6.7%) in the reporting quarter. Administrative expenses were 49,000 euros higher than the indicator for the comparable period, and the rate of administrative expenses to revenue accounted for 9.4%, having decreased by 0.7 percentage points.

In Q1 2015, the average 467 people worked in the Group − on the average by 27 persons more than in the reference period. In the first quarter, employee wages and salaries totalled 2,388 (Q1 2014: 2,170) thousand euros. The average wages per employee per month amounted 1,705 (Q1 2014: 1,645) euros. The labour and salary costs increased by 9.7% up to 3.1 million euros in Q1 2015 and the rate of labour costs decreased to 28.2%, from 29.1% in Q1 2014.

In the first quarter the gross profit of the Group was 1.7 (Q1 2014: 1.7) million euros. The gross profit margin was 15.5% (Q1 2014: 17.6%). The Group’s operating profit of Q1 2015 was 29 (Q1 2014:56) thousand euros and EBITDA 388 (Q1 2014: 441) thousand euros. Return of sales for the accounting quarter was 0.3% (Q1 2014: 0.6%) and return of sales before depreciation 3.5% (Q1 2014: 4.6%). In Q1 2014, the Group consolidated from the associated company a profit of 324,000 euros. The Group sold the associated company in 2014. The consolidated profit of AS Draka Keila Cables contributed 87% of the Group’s net profit for Q1 2014.

Overall, the consolidated net profit of the Q1 2015 was 10 (Q1 2014: 371) thousand euros, of which the share of the owners of the Company was 16 (Q1 2013: 391) thousand euros.

During 3 months, the amount of the consolidated balance sheet increased by 5.3 million euros and compered to the period under review increased by 4.2 million euros up to 75.0 million euros, as of 31 March 2015.

During the 3-months period, the Group’s investments to non-current assets totalled 1.04 (Q1 2014: 0.40) million euros.

Subsequent events:
The general meeting of shareholders of PKC Group Oyj, held on 1 April 2015, decided to pay dividends amounting to 0.70 euros per share. Dividends were transferred to the bank accounts of shareholders on 14 April 2015. AS Harju Elekter owns 1,094,641 of PKC Group Oyj shares. The net dividend income of 651,000 euros is reflected in the profit and cash flow from investment activity for Q2 of 2015.

The Management Board of AS Harju Elekter sent out invitations to its shareholders on convening an annual general meeting of shareholders in the Keila Kultuurikeskus, on 14 May 2015. The Board will propose to the AGM to pay a dividend of 0.15 (2013: 0.10) euros per share for the year 2014, totalling 2.61 (2013: 1.74) million euros.

On 23 April 2015, AS Harju Elekter signed a contract for the purchase of all shares in Lithuanian subsidiary UAB Rifas. In the transaction, AS Harju Elekter acquired a holding of 37% in their subsidiary UAB Rifas, in addition to the previously acquired 63%, and in doing so became the sole owner of the company. Acquiring all of the shares of UAB Rifas was a strategic move by the Group, helping to secure their position in Lithuania and on export markets.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-3/2015

AS HARJU ELEKTER    
BALANCE SHEET, 31.03.2015    
Consolidated, unaudited    
     
Group    
EUR’000    
ASSETS 31.03.15 31.12.14
Cash and cash equivalents 8 292 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 6 847 6 484
Prepayments 842 455
Prepaid income tax 99 79
Inventories 10 274 8 104
TOTAL CURRENT ASSETS 26 354 25 141
Other long-term financial investments 22 505 19 145
Investment property 12 364 12 109
Property, plant and equipment 8 390 7 968
Intangible assets 5 429 5 429
Total non-current assets 48 688 44 651
TOTAL ASSETS 75 042 69 792
LIABILITIES AND OWNERS’ EQUITY  
Interest-bearing loans and borrowings 205 278
Trade payables and other payables 8 935 6 989
Tax liabilities 1 080 1 072
Income tax liabilities 12 12
Short-term provision 20 39
TOTAL CURRENT LIABILITIES 10 252 8 390
NON-CURRENT LIABILITIES 1 560 1 560
TOTAL LIABILITIES 11 812 9 950
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 22 754 19 393
Retained earnings 26 698 26 664
TOTAL OWNERS’ EQUITY 61 872 58 477
Non-controlling interests 1 358 1 365
TOTAL EQUITY 63 230 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 75 042 69 792
     
   
INCOME STATEMENT,  1-3/2015    
Consolidated,unaudited    
     
EUR’000    
GROUP    Q1 2015    Q1 2014
     
NET SALES 10 945 9 661
Cost of goods sold -9 247 -7 960
Gross profit 1 698 1 701
Marketing expenses -684 -651
Administrative expenses -1 025 -976
Other revenue 54 9
Other expenses -14 -27
Operating profit 29 56
Finance income 14 17
Finance costs -7 -8
Income from subsidiaries 0 324
Profit from normal operations 36 389
Corporate Income tax -26 -18
Profit for the period, attributable to 10 371
   owners of the Company 16 391
   non-controlling interest -6 -20
Basic earnings per share  (EUR) 0,00 0,02
Diluted earnings per share  (EUR) 0,00 0,02

 

Financial results, 1-3/2015

 

In Q1 2015, AS Harju Elekter was affected by normal seasonality. Finnkumu Oy was consolidated and added to the Group’s results; although, compared to last year, the profit from AS Draka Keila Cables was no longer consolidated. A decline in the Estonian segment was mostly due to the non-performance of the contractual order volume by Eesti Energia.

January – March Year
2015 2014 2014
Revenue (EUR’000) 10,945 9,661 50,606
Gross profit (EUR’000) 1,698 1,701 9,081
EBITDA (EUR’000) 388 441 3,741
EBIT (EUR’000) 29 56 2,228
Profit for the period (EUR’000) 10 371 9,778
incl attributed to Owners of the Company 16 391 9,697

In the accounting quarter, the Group’s consolidated revenue was 10.9 million euros, which was 13.3% compared to the reference period. 90% of sales income was earned from the Production segment, and Real Estate together with other areas of activity contributed 10% of the consolidated sales volume.

There has been a growth in sales revenue among almost all products and services. More than 91% of sales revenue originated from the sale of electrical equipment, having increased 14% in the reporting quarter. 72% of the Group’s products and services were sold in foreign markets, outside Estonia (Q1 2014: 64%). Finland is the biggest market of the Group. In the reporting quarter, 56% of the Group’s products and services were sold in Finland (Q1 2014: 45%). The sales volume of Estonian segment has decreased by 11.2%.

In the reporting quarter, the operating expenses increased by 14.3%. Since the cost of sales increased at a pace that exceeded the sales revenue, the gross profit margin decreased by 2.1 percentage points in comparison to the indicator for the comparable period. Because of the Group’s Estonian and Finnish subsidiaries participation in Tampere energy fair, the distribution costs increased by 33,000 euros to 684,000 euros, the rate of distribution costs to revenue accounted for 6.2% (Q1 2014: 6.7%) in the reporting quarter. Administrative expenses were 49,000 euros higher than the indicator for the comparable period, and the rate of administrative expenses to revenue accounted for 9.4%, having decreased by 0.7 percentage points.

In Q1 2015, the average 467 people worked in the Group − on the average by 27 persons more than in the reference period. In the first quarter, employee wages and salaries totalled 2,388 (Q1 2014: 2,170) thousand euros. The average wages per employee per month amounted 1,705 (Q1 2014: 1,645) euros. The labour and salary costs increased by 9.7% up to 3.1 million euros in Q1 2015 and the rate of labour costs decreased to 28.2%, from 29.1% in Q1 2014.

In the first quarter the gross profit of the Group was 1.7 (Q1 2014: 1.7) million euros. The gross profit margin was 15.5% (Q1 2014: 17.6%). The Group’s operating profit of Q1 2015 was 29 (Q1 2014:56) thousand euros and EBITDA 388 (Q1 2014: 441) thousand euros. Return of sales for the accounting quarter was 0.3% (Q1 2014: 0.6%) and return of sales before depreciation 3.5% (Q1 2014: 4.6%). In Q1 2014, the Group consolidated from the associated company a profit of 324,000 euros. The Group sold the associated company in 2014. The consolidated profit of AS Draka Keila Cables contributed 87% of the Group’s net profit for Q1 2014.

Overall, the consolidated net profit of the Q1 2015 was 10 (Q1 2014: 371) thousand euros, of which the share of the owners of the Company was 16 (Q1 2013: 391) thousand euros.

During 3 months, the amount of the consolidated balance sheet increased by 5.3 million euros and compered to the period under review increased by 4.2 million euros up to 75.0 million euros, as of 31 March 2015.

During the 3-months period, the Group’s investments to non-current assets totalled 1.04 (Q1 2014: 0.40) million euros.

Subsequent events:
The general meeting of shareholders of PKC Group Oyj, held on 1 April 2015, decided to pay dividends amounting to 0.70 euros per share. Dividends were transferred to the bank accounts of shareholders on 14 April 2015. AS Harju Elekter owns 1,094,641 of PKC Group Oyj shares. The net dividend income of 651,000 euros is reflected in the profit and cash flow from investment activity for Q2 of 2015.

The Management Board of AS Harju Elekter sent out invitations to its shareholders on convening an annual general meeting of shareholders in the Keila Kultuurikeskus, on 14 May 2015. The Board will propose to the AGM to pay a dividend of 0.15 (2013: 0.10) euros per share for the year 2014, totalling 2.61 (2013: 1.74) million euros.

On 23 April 2015, AS Harju Elekter signed a contract for the purchase of all shares in Lithuanian subsidiary UAB Rifas. In the transaction, AS Harju Elekter acquired a holding of 37% in their subsidiary UAB Rifas, in addition to the previously acquired 63%, and in doing so became the sole owner of the company. Acquiring all of the shares of UAB Rifas was a strategic move by the Group, helping to secure their position in Lithuania and on export markets.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-3/2015

AS HARJU ELEKTER
BALANCE SHEET, 31.03.2015
Consolidated, unaudited
Group
EUR’000
ASSETS 31.03.15 31.12.14
Cash and cash equivalents 8 292 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 6 847 6 484
Prepayments 842 455
Prepaid income tax 99 79
Inventories 10 274 8 104
TOTAL CURRENT ASSETS 26 354 25 141
Other long-term financial investments 22 505 19 145
Investment property 12 364 12 109
Property, plant and equipment 8 390 7 968
Intangible assets 5 429 5 429
Total non-current assets 48 688 44 651
TOTAL ASSETS 75 042 69 792
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 205 278
Trade payables and other payables 8 935 6 989
Tax liabilities 1 080 1 072
Income tax liabilities 12 12
Short-term provision 20 39
TOTAL CURRENT LIABILITIES 10 252 8 390
NON-CURRENT LIABILITIES 1 560 1 560
TOTAL LIABILITIES 11 812 9 950
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 22 754 19 393
Retained earnings 26 698 26 664
TOTAL OWNERS’ EQUITY 61 872 58 477
Non-controlling interests 1 358 1 365
TOTAL EQUITY 63 230 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 75 042 69 792
INCOME STATEMENT,  1-3/2015
Consolidated,unaudited
EUR’000
GROUP    Q1 2015    Q1 2014
NET SALES 10 945 9 661
Cost of goods sold -9 247 -7 960
Gross profit 1 698 1 701
Marketing expenses -684 -651
Administrative expenses -1 025 -976
Other revenue 54 9
Other expenses -14 -27
Operating profit 29 56
Finance income 14 17
Finance costs -7 -8
Income from subsidiaries 0 324
Profit from normal operations 36 389
Corporate Income tax -26 -18
Profit for the period, attributable to 10 371
   owners of the Company 16 391
   non-controlling interest -6 -20
Basic earnings per share  (EUR) 0,00 0,02
Diluted earnings per share  (EUR) 0,00 0,02

Interim report 1-3/2015

 

AS Harju Elekter acquired all of the shares of their Lithuanian subsidiary UAB Rifas

Yesterday, on 23 April 2015, AS Harju Elekter signed a contract for the purchase of all shares in Lithuanian subsidiary UAB Rifas. In the transaction, AS Harju Elekter acquired a holding of 37% in their subsidiary UAB Rifas, in addition to the previously acquired 63%, and in doing so became the sole owner of the company. The purchase transaction enters into force on 28 April 2015, at the latest. According to the contract, the price of the transaction will not be made public.

After the transaction, Rifas UAB will continue to operate under its own name and brand as a wholly-owned subsidiary of AS Harju Elekter. Acquiring all of the shares of UAB Rifas was a strategic move by the Group, helping to secure their position in Lithuania and on export markets.

 

Andres Allikmäe was appointed Chairman and Endel Palla, Tiit Atso (Group’s FO), Jan Osa (Sales Director of AS Harju Elekter Elektrotehnika) and Aidas Šetikas was appointed Member of the Management Board of Rifas UAB. Aidas Šetikas will also continue as a Managing Director of Rifas UAB.

 

UAB Rifas Group, financial summary 2012–2014

1000 euros                              2014    2013    2012

Cash and cash equivalents     662      633      602

Trade receivables                 1,030   1,005   2,158

Inventories                             1,285      827      733

Non-current assets                1,615   1,664   1,769

Total assets                              4,592   4,129   5,262

Current liabilities                    1,165       671   1,723

Long-term liabilities                         0     2    10

Equity                                            3,427 3,456 3,529

incl. share capital                       222   222   222

Revenue                                       5,283 5,809 7,221

EBIT                                                 109    17   273

Net profit                                         54   -49   224

Basic earnings per share (EUR)      7    -6    29

Number of shares                    7,650 7,650 7,650

Dividend per share                     9.46  9.46 11.36

 

Since the end of the previous financial year there are no significant change in the UAB Rifas business activities.

UAB Rifas was established in 1991. The main area of the activities of the company is the production and marketing of the industrial automation equipment and electric power distribution and transfer equipment. The Rifas Group comprises the Lithuanian manufacturing company Rifas UAB, and its subsidiary, Automatikos Iranga (51%), which specialises in design. In 2014, the company’s audited sales revenue amounted to 5.3 million euros, of which 80% was sold outside Lithuania. There are 80 employees working in the Rifas Group. AS Harju Elekter acquired a holding of 51% in the Lithuanian company UAB Rifas in 2003 and increased it to 63% in December 2012.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well as well-known and respected company in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (100%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in the Finnish publicly listed company PKC Group Oyj (5%).

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ Tallinn’s Rules and Regulations. The management board and the supervisory board members of AS Harju Elekter are not personally interested in this transaction in any other way.

 

Andres Allikmäe

Managing Director/CEO

+372 674 7400

 

Additional information: Andres Allikmäe, Managing Director of AS Harju Elekter; Endel Palla, Chairman of the Supervisory Board (+372 674 7400).

 

Prepared by:

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

AS Harju Elekter Supervisory Board approved audited annual report 2014

The Supervisory Board of AS Harju Elekter approved the audited financial results for the year 2014. The financial results remained unchanged, compared to the preliminary disclosure on 25th of February 2015.

Consolidated sales revenue for the reporting year reached 50.6 million euros, having increased 5% in relation to the comparable period, the consolidated operating profit increased by 28% up to 2.2 million euros and consolidated net profit was 9.8 million euros, increasing by 89% compared to the previous period.

Audited financial results for the year 2014 as well as the yearbook have been included as attachments to this announcement.

Andres Allikmäe

Managing Director/CEO

+372 674 7400

Prepared by

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

AS Harju Elekter notice of the annual general meeting

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 14 May 2015, beginning at 10 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

 

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

  1. Approval to AS Harju Elekter annual report of the year 2014.

To approve the annual report of AS Harju Elekter of 2014, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 69,792 thousand euros as of 31.12.2014, while the sales revenue of the financial year was 50,606 thousand euros and net profit 9,697 thousand euros.

  1. Approval to profit distribution.

To approve the profit distribution proposal of AS Harju Elekter of 2014 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2014 16,967 thousand euros

total net profit of the financial year             9,697 thousand euros

total retained profit on 31.12.2014 26,664 thousand euros

Management board’s proposal for the distribution of profit as follows:

 

dividends (0,15 euros per share*)  2,610 thousand euros

balance carried forward after profit distribution       24,054 thousand euros

The dividends will be paid to the shareholders on 3 June 2015 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 28 May 2015 at 23.59 shall be entitled to dividend.

  1. Appointment and remuneration of auditors

To appoint KPMG Baltics OÜ, register code 10096082 to perform the audit of AS Harju Elekter on the years 2015-2017. Consent obtained. The auditor will be remunerated according to the agreement.

  1. Increasing the share capital

According to the AGM decision No. 6 from 3 May 2012, to realize the targeted share issue (share option) program, and to increase the share capital by 420,000 (four hundred twenty thousand) euros up to 12,600,000 (twelve million six hundred thousand) euros, by issuing 600,000 (six hundred thousand) new ordinary shares through monetary contributions.

 

———————————————————————————————————————–

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 7.05.2015. Registration of the participants starts on 14 May 2015 at 9 AM. Please submit the following documents to register the participants of the general meeting: a shareholder that is a natural person – personal identification document; a representative of a shareholder that is a natural person – personal identification document and a written letter of authorisation; a legal representative of a shareholder that is a legal person – an extract of the relevant (commercial) register in which the legal person is registered, and the personal identification document of the representative; a transactional representative of a shareholder that is a legal person is also required to submit a written authorisation issued by the legal representative of the legal person in addition to the above listed documents. We ask the documents of a legal person registered in a foreign country to be legalised or having an apostil attached to the documents beforehand, unless specified otherwise in an international agreement. AS Harju Elekter may register a shareholder that is a legal person from a foreign country to the general meeting also in case all required information on the legal person and its representative are included in a notarised letter of authorisation issued in the foreign country and the respective letter of authorisation is accepted in Estonia. We ask you to present a passport or an ID-card as a personal identification document.

A shareholder may inform of the appointment of a representative or withdrawal of an authorisation given to a representative before the general meeting by e-mail on yldkoosolek@he.ee or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 13 May 2015 to the secretariat of AS Harju Elekter at Paldiski Str 31 (3nd floor) in Keila.

The annual report of 2014, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Str. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

The shareholders whose shares represent at least 1/20 of the share capital may request the inclusion of additional issues to the agenda of the general meeting, provided that the respective request has been submitted in writing no later than by 29 April 2015. The shareholders whose shares represent at least 1/20 of the share capital may submit a written draft of the resolution in respect to each item on the agenda no later than by 11 May 2015. More detailed information available on §287 of the Commercial Code (right of shareholder to information), §293 (2) (right to demand the inclusion of additional issues in the agenda) and §2931 (3) (obligation to submit simultaneously with the request on the modification of the agenda a draft of the resolution or substantiation) and §2931 (4) (right to submit a draft of the resolution in respect to each item on the agenda) about the rules and term of exercising these rights have been published on the homepage of AS Harju Elekter at www.harjuelekter.ee. The drafts of the resolutions and substantiations submitted by the shareholders will be published on the same homepage, if any are received. After the items on the agenda of the general meeting, including additional issues, have been discussed, the shareholders can ask for information from the management board about the activity of the public limited company.

 

Andres Allikmäe

Managing Director/CEO

+372 6747 400

 

Prepared by:

Moonika Vetevool

Corporate communication and investor relations manager

+372 671 2761

Financial results, 1-12/2014

 

2014 was an eventful and successful year for the Harju Elekter Group. Despite the fact that the economic environment and the markets were unstable and volatile, we were able to reach the goals we set for ourselves and increasing Group’s sales revenue and profit.

In July 2014, Group’s subsidiary Satmatic Oy purchased all shares of Finland’s largest pre-fabricated substation producer Finnkumu Oy, whose financial statements of the second half of the year comprises Group’s Q4 and 1-12/2014 interim report since 1 July 2014. In July 2014, Group sold its 34% holding in AS Draka Keila Cables to the core investor Prysmian Group. Affiliated company’s profit is consolidated by the equity method till 30.6.2014. Both of these events had an impact on both the Group’s accounting quarter as well as 12-months consolidated financial results.

October-December change January-December change
(thousand euros) 2014 2013 % 2014 2013 %
Revenue 14,166 12,288 15.3 50,606 48,288 4.8
Gross profit 2,222 2,131 4.3 9,081 8,458 7.4
EBITDA 657 626 5.0 3,741 3,269 14.4
EBIT 282 214 31.8 2,228 1,743 27.8
Profit for the period 253 298 -15.1 9,778 5,173 89.0

The Group’s revenue increased in the reporting quarter by 15.3%, compared to the Q4 2013 and amounted to 14.2 million euros. Consolidated sales revenue for the reporting year reached 50.6 million euros, having increased 4.8% in relation to the comparable period. 70% of the Group’s products and services were sold outside Estonia.

90.5% of sales revenue was earned from the Production segment, and Real Estate together with Unallocated Activities contributed 9.5% of the consolidated sales volume. The Manufacturing segment is engaged in the manufacturing and sales of electricity distribution and control equipment and in related activities. The revenue from the sales of electrical equipment comprised 93.6% of the sales volume for Manufacturing and 84.7% of the consolidated revenue. The sale of electrical equipment grew by 21.8% to 12.4 million euros in Q4, and 7.3% to 42.9 million euros in the 12 month period.

As at the balance date on 31 December, there were 483 people working in the Group, which were 32 employees more than a year before. With the purchase of Finnkumu Oy, the Group gained 18 employees. In Q4 2014, the average 465 people worked in the Group – on the average by 29 persons more than in the reference period. During 12 months, the average number of employees decreased by 4 to 459.

Labour costs increased in Q4 by 9.6% to 3.2 million euros and in 12-months period by 6.0% to 12.0 million euros. The rate of labour costs to revenue formed 23.8% (2013: 23.5%). In the Q4, employee wages and salaries totalled 2,503 (Q4 2013: 2,247) thousand euros and during the 12-months period 9,194 (2013: 8,645) thousand euros. The average wages per employee per month amounted to 1,669 (2013: 1,584) euros.

Cost of sales increased 17.6% in the reporting quarter and 4.3% in 12-months period, at a rate slightly higher the sales revenue by 2.2 percentage points in reporting quarter and below by 0.5 percentage points in 12-months. Overall, the growth rate of operating expenses lagged behind that of sales revenue, having increased in the reporting quarter by 15.1%, to 14.9 million euros, in the 12-month period by 3.8%, to 48.3 million euros.

Accordingly, the Group’s operating profit in the reporting quarter was 0.3 (Q4 2013: 0.2) million euros and EBITDA 0.7 (Q4 2013: 0.6) million euros. Return of sales for the accounting quarter was 2.0% (Q4 2013: 1.7%) and return of sales before depreciation 4.6% being 0.5 per cent point lower compering to the same period a year before. During 12-months period, EBITDA as well EBIT increased both by 0.5 million euros to 3.7 million and to 2.2 million euros, respectively. Return of sales before depreciation for the accounting year improved by 0.6 per cent point and was 7.4% and return of sales by 0.8 per cent point being 4.4%.

PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 907 (2013: 948) thousand euros. In the second quarter, also 200,000 shares of PKC Group Oyj were sold and the financial income from selling the shares was 4.6 (2013: 1.7) million euros. The profit from financial investment totalled 5.6 million euros in the 12-months period (2013: 2.6 million euros). During the 12 months, finance income amounted to 5.7 (2013: 2.6) million euros.

In the Q3 2014, the Group sold their 34% holding in AS Draka Keila Cables and the financial income from selling the shares was 1.8 million euros. In the accounting period, the Group consolidated from the associated company a profit of 0.8 (2013: 1.3) million euros.

The consolidated net profit of the reporting year was 9.8 million euros, increasing approximately 4.6 million euros compared to the previous period.  The share of the owners of the Company was 9.7 million euros. EPS in 12 months was 0.56 (2013: 0.30) euros.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-12/2014

 

AS HARJU ELEKTER
BALANCE SHEET, 31.12.2014
Consolidated, unaudited
Group
EUR’000
ASSETS 31.12.14 31.12.13
Cash and cash equivalents 9 984 4 102
Available-for-sale financial assets 35 0
Trade receivables and other receivables 6 484 5 699
Prepayments 455 256
Prepaid income tax 79 41
Inventories 8 104 5 801
TOTAL CURRENT ASSETS 25 141 15 899
Deferred income tax asset 0 7
Investments in associates 0 3 598
Other long-term financial investments 19 145 31 339
Investment property 12 109 11 663
Property, plant and equipment 7 968 8 129
Intangible assets 5 429 436
Total non-current assets 44 651 55 172
TOTAL ASSETS 69 792 71 071
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 278 654
Trade payables and other payables 6 989 4 437
Tax liabilities 1 072 969
Income tax liabilities 12 15
Short-term provision 39 36
TOTAL CURRENT LIABILITIES 8 390 6 111
NON-CURRENT LIABILITIES 1 560 1 141
TOTAL LIABILITIES 9 950 7 252
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 19 393 31 424
Retained earnings 26 664 18 635
TOTAL OWNERS’ EQUITY 58 477 62 479
Non-controlling interests 1 365 1 340
TOTAL EQUITY 59 842 63 819
TOT.LIABILIT.AND OWNERS’ EQUITY 69 792 71 071
INCOME STATEMENT,  1-12/2014
Consolidated,unaudited
EUR’000
GROUP Q4 2014 Q4 2013 M12 2014 M12 2013
NET SALES 14 166 12 288 50 606 48 288
Cost of goods sold -11 945 -10 157 -41 525 -39 830
Gross profit 2 222 2 131 9 081 8 458
Marketing expenses -745 -737 -2 720 -2 627
Administrative expenses -1 176 -1 169 -4 042 -4 067
Other revenue 11 8 27 38
Other expenses -30 -19 -118 -59
Operating profit 282 214 2 228 1 743
Finance income 34 2 5 661 2 648
Finance costs -12 -16 -38 -46
Income from subsidiaries 0 153 2 602 1 303
Profit from normal operations 304 353 10 453 5 648
Corporate Income tax -51 -55 -675 -475
Profit after taxes, incl 253 298 9 778 5 173
Net profit for the year 232 327 9 697 5 162
Non-controlling interest 21 -29 81 11
Basic earnings per share  (EUR) 0,01 0,02 0,56 0,3
Diluted earnings per share  (EUR) 0,01 0,02 0,56 0,3

Interim report 1-12/2014

Karin Padjus
FO
+372 674 7403

 

Publication of financial reports in 2015

AS Harju Elekter wishes to the shareholders Happy Holidays and informs you that in the year 2015, the consolidated financial results of AS Harju Elekter will be published as following:

2014 4Q results                      25.02.2015
2015 1Q results                      29.04.2015
AGM                                     14.05.2015
2015 2Q results                      05.08.2015
2015 3Q results                      04.11.2015

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Financial results, 1-9/2014

In Q3, the Group’s revenue and earnings increased comparing to the previous quarter as well as to the comparable period.

In July 2014, Group’s subsidiary Satmatic Oy purchased all shares of Finland’s largest pre-fabricated substation producer Finnkumu Oy, whose Q3 financial statements comprises Group’s Q3 and 1-9/2014 interim report since 1 July 2014. In July 2014, Group sold its 34% holding in AS Draka Keila Cables to the core investor Prysmian Group. Affiliated company’s profit is consolidated by the equity method till 30.6.2014.  Both of these events have an impact on both the Group’s accounting quarter as well as 9-months consolidated financial results.

change

July-September

change

January-September

Year

(thousand euros)

%

2014

2013

%

2014

2013

2013

Revenue

35.8

15,687

11,551

1.2

36,440

36,000

48,288

Gross profit

43.4

3,242

2,262

8.4

6,858

6,327

8,458

EBITDA

67.8

1,907

1,136

16.7

3,084

2,643

3,269

EBIT

100.1

1,527

763

27.1

1,945

1,531

1,743

Profit for the period

33.0

3,200

2,407

95.3

9,525

4,876

5,173

Incl.attributed to Owners of the Company

27.5

3,102

2,432

95.7

9,463

4,835

5,162

Revenue increased in the reporting quarter compared to the previous quarter by 35.8% and reached 15.7 million euros. Because 50% of the growth came from Finnkumu Oy, the comparable increase in Q3 sales volumes was 10.9%. Consolidated sales revenue for the nine month period reached 36.4 million euros, having increased 1.2% in relation to the comparable period. 70% of the Group’s products and services sold outside Estonia.

90% of sales revenue was earned from the Production segment, and Real Estate together with Unallocated Activities contributed 10% of the consolidated sales volume. The Manufacturing segment is engaged in the manufacturing and sales of electricity distribution and control equipment and in related activities. The revenue from the sales of electrical equipment comprised 92.7% of the sales volume for Manufacturing and 83.7% of the consolidated revenue.

In the reporting quarter, the number of employees in the Group was an average of 14 more than in the comparable period. The Group companies have recruited new employees, and in Q3 additional temporary staff is traditionally used. Compared to the beginning of the year, the number of employees in the Group has increased by 22, with 18 added to the Group as a result of the acquisition of Finnkumu Oy in Q3. Labour costs increased in 9-months period by 4.7% to 8.8 million euros. The rate of labour costs to revenue formed 24.2% (9M 2013: 23.4%). In the Q3, employee wages and salaries totalled 2,361 (Q3 2013: 1,985) thousand euros and during the 9-months period 6,692 (9M 2013: 6,398) thousand euros. The average wages per employee per month amounted to 1,647 (9M 2013: 1,542) euros.

Cost of sales increased 34% in the reporting quarter and decreased 0.3% in 9-months period, at a rate slightly below the sales revenue by 1.8 percentage points in reporting quarter and by 1.5 percentage point in 9-months. Overall, the growth rate of operating expenses lagged behind that of sales revenue, having increased in the reporting quarter by 30.6%, to 14.1 million euros, but having decreased in the 9-month period by 0.1%, to 34.4 million euros.

Accordingly, the Group’s operating profit in the reporting quarter was 1.5 (Q3 2013: 0.8) million euros and EBITDA 1.9 (Q3 2013: 1.1) million euros.  Return of sales for the accounting quarter was 9.7% (Q3 2013: 6.6%) and return of sales before depreciation 12.2% being 2.4 per cent point better compering to the same period a year before. During 9-months period, EBITDA as well EBIT increased both by 0.4 million euros to 3.1 million and to 1.9 million euros, respectively.

PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 907 (2013: 948) thousand euros. In the second quarter, also 200,000 shares of PKC Group Oyj were sold and the financial income from selling the shares was 4.6 (9M 2013:1.7) million euros. The profit from financial investment totalled 5.5 million euros in the 9-months period; in the comparable period it was 2.6 million euros. During the 9 months, finance income amounted to 5.6 (9M 2013: 2.6) million euros.

In the reporting quarter, the Group sold their 34% holding in AS Draka Keila Cables and the financial income from selling the shares was 1.8 million euros. During the reporting period, the Group consolidated from the associated company a profit of 0.8 (9M 2013: 1.2) million euros.

The consolidated net profit of the reporting quarter was 3.2 (Q3 2013: 2.4) million euros, of which the share of the owners of the Company was 3.1 (Q3 2013: 2.4) million euros. EPS in the Q3 was 0.18 (Q3 2013: 0.14) euros.

Overall, the consolidated net profit of the 9M 2014 was 9.5 million euros, being 2 times higher compared to the previous period.  The share of the owners of the Company was 9.5 million euros. EPS in 9 months was 0.54 (9M 2013: 0.28) euros.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-9/2014

AS HARJU ELEKTER
BALANCE SHEET, 30.09.2014
Consolidated, unaudited
Group
EUR’000
ASSETS 30.09.14 31.12.13
Cash and cash equivalents 9 135 4 102
Available-for-sale financial assets 30 0
Trade receivables and other receivables 8 184 5 699
Prepayments 225 256
Prepaid income tax 9 41
Inventories 9 713 5 801
TOTAL CURRENT ASSETS 27 296 15 899
Deferred income tax asset 6 7
Investments in associates 0 3 598
Other long-term financial investments 17 548 31 339
Investment property 11 464 11 663
Property, plant and equipment 8 043 8 129
Intangible assets 5 364 436
Total non-current assets 42 425 55 172
TOTAL ASSETS 69 721 71 071
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 412 654
Trade payables and other payables 7 035 4 437
Tax liabilities 1 335 969
Income tax liabilities 221 15
Short-term provision 23 36
TOTAL CURRENT LIABILITIES 9 026 6 111
NON-CURRENT LIABILITIES 2 724 1 141
TOTAL LIABILITIES 11 750 7 252
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 17 793 31 424
Retained earnings 26 412 18 635
TOTAL OWNERS’ EQUITY 56 625 62 479
Non-controlling interests 1 346 1 340
TOTAL EQUITY 57 971 63 819
TOT.LIABILIT.AND OWNERS’ EQUITY 69 721 71 071
INCOME STATEMENT,  1-9/2014
Consolidated,unaudited
EUR’000
GROUP Q3 2014 Q3 2013 M9 2014 M9 2013
NET SALES 15 687 11 551 36 440 36 000
Cost of goods sold -12 445 -9 289 -29 582 -29 673
Gross profit 3 242 2 262 6 858 6 327
Marketing expenses -680 -586 -1 976 -1 890
Administrative expenses -966 -913 -2 865 -2 897
Other revenue -20 13 16 32
Other expenses -49 -13 -88 -41
Operating profit 1 527 763 1 945 1 531
Finance income 79 1 228 5 627 2 645
Finance costs -9 -7 -25 -30
Income from subsidiaries 1 787 467 2 602 1 150
Profit from normal operations 3 384 2 451 10 149 5 296
Corporate Income tax -184 -44 -624 -420
Profit after taxes, incl 3 200 2 407 9 525 4 876
Net profit for the year 3 102 2 432 9 463 4 835
Non-controlling interest 98 -25 62 41
Basic earnings per share  (EUR) 0,18 0,14 0,54 0,28
Diluted earnings per share  (EUR) 0,18 0,14 0,54 0,28

Interim report 1-9/2014

 

Financial results, 1-6/2014

The Group’s six months sales revenue was 20.8 million euros and in the accounting quarter 11.1 million euros, which was 15% higher comparing to the Q1 2014. Most of the operating profit in the amount of 0.4 million euros earned in the reporting quarter. Two important events took place in Q2: purchasing of the Finland’s largest substations manufacturer Finnkumu Oy and in order to promptly finance the purchase of the Finnish subsidiary also 200,000 shares of PKC Group Oyj at an extraordinarily high price level were sold. Overall, the consolidated net profit of the H1 2014 increased to 6.4 million euros and to 6.0 million euros in Q2 2014.

Change

April – June

Change

January – June

Year

(thousand euros)

%

2014

2013

%

2014

2013

2013

Revenue

-15.1

11,092

13,060

-15.1

20,753

24,450

48,288

Gross profit

-18.0

1,922

2,344

-11.1

3,616

4,066

8,458

EBITDA

-22.6

736

951

-21.9

1,177

1,507

3,269

EBIT

-37.5

362

579

-45.5

418

768

1,743

Profit for the period

239.8

5,954

1,752

156.1

6,325

2,470

5,173

incl attributed to Owners of the Company

250.1

5,970

1,705

164.7

6,361

2,403

5,162

Business at the beginning of this year has started more slowly than in previous years, but there were some improvements in Q2. Revenue increased in the reporting quarter compared to the previous quarter, 15% or 1.4 million euros, remaining nonetheless 15% below the comparable periods. 89% of sales revenue was earned from the Production segment, and Real Estate together with Unallocated Activities contributed 11% of the consolidated sales volume. The Manufacturing segment is engaged in the manufacturing and sales of electricity distribution and control equipment and in related activities. The revenue from the sales of electrical equipment comprised 91% of the sales volume for Manufacturing and 81% of the consolidated revenue, down by more than 17% both in the reporting quarter and in H1 2014.

Decreased investments in the energy distribution sector in Estonia this year have resulted in a decrease in the sales volumes for medium voltage distribution equipment and substations. Sales on the Estonian market declined 27% in the reporting quarter and one-fifth in the first half of the year, decreasing the share of the Estonian market in the consolidated revenue to 34.6%. The Finnish export sector remains in recession, and once again we have to recognise the 10% drop in the sales volumes of the technology sector, compared to the first half of 2013. Sales from the Group’s Finnish company in this sector decreased 17.5% in the first half of the year. At the same time, the 6-months revenue for the Finnish company has increased 8%, due to the resale of other Group’s companies’ products. Revenue from the resale of products from the Group’s Estonian and Lithuanian companies made up 43% of the revenue for the Finnish company, increasing 2.3 times to 4.2 million euros, in the first six months. A considerable portion of the consolidated sales revenue, including the decline in the sales of electrical equipment, came from the Lithuanian segment, where revenue decreased by 41% against the comparable period, mainly due to a decrease in the sales from projects. In the first half of the year, sales on the Lithuanian market decreased 80%, generating just 1.8% (H1 2013: 7.3%) of the consolidated revenue. At the same time, companies in the Lithuanian segment have increased their sales volumes to foreign markets by more than 15%.

The revenue earned by the Group outside Estonia made up 65.4% in the first half of 2014, rising to 66.5% in the reporting quarter. Increasing the share of foreign markets has been, and also will be in the longer term, one of the strategic objectives for the managers of the Group. More than 86% revenue received from home markets of the Group’s companies. The tense situation in Ukraine has decreased deliveries by 0.5 million euros in the direction of Eastern Europe. Switzerland and Czech were added as new markets.

Operating expenses decreased 13.8% to 10.7 million euros in the reporting quarter and 14.1% to 20.3 million euros in the first half of the year, at a rate slightly below the sales revenue (15.1%). There was a decrease in operating expenses, with the cost of sales decreasing 14.4% to 9.2 million euros in Q2 and 15.9% to 17.1 million euros in the first six months. Since the cost of sales decreased at a pace that exceeded the sales revenue during the six months, the gross profit margin improved by 0.8 percentage points in comparison to the indicator for the comparable period.

In Q2 2014, the average 444 people worked in the Group − on the average by 20 persons less than in the reference period. In the first half of the year, the average number of employees decreased by 21 against the comparable period, to 442. Although the adjustment in the salaries of the Group’s staff in 2013 resulted in a rise in fixed costs, the Group was able to respond promptly to the decrease in sales orders and implemented austerity measures. Labour costs decreased by 5.1% to 3.0 million euros and by 1.3% to 5.8 million euros, respectively. In the accounting quarter, employee wages and salaries totalled 2,162 (Q2 2013: 2,305) thousand euros and during the first 6 months 4,331 (H1 2013: 4,414) thousand euros. The average wages per employee per month amounted to 1,633 (H1 2013: 1,591) euros.

The Group’s operating profit in the reporting quarter was 362 (Q2 2013: 579) thousand euros and EBITDA 736 (Q2 2013: 951) thousand euros. Return of sales for the accounting quarter was 3.3% (Q2 2013: 4.4%) and return of sales before depreciation 6.6% being 0.7 per cent point lower compering to the same period figure a year before. The Group’s EBITDA in first half of the year decreased by 0.33 million euros to 1.18 million euros and EBIT by 0.35 million euros to 0.42 million euros. The decrease in operating profit was the result of the decreased proportion of value added products in the product portfolio. In H1, return of sales before depreciation was 5.7% (H1 2013: 6.2%) and return of sales for the accounting quarter was 2.0% (H1 2013: 3.1%).

In the reporting quarter, dividend income was 906 (Q2 2013: 948) thousand euros and also 200,000 PKC Group Oyj shares were sold. The financial income from selling the shares amounted to 4.6 million euros. In total, financial investments yielded a profit of 5.5 million euros both in the reporting quarter as well as in the first half of the year. In the comparable periods these figures were 0.9 million euros and 1.4 million euros respectively. In Q2, the Group consolidated from the associated company a profit of 491 (Q2 2013: 608) thousand euros and totally in H1 815 (H1 2013: 683) thousand euros.

The consolidated net profit of the quarter under review was 5.95 (Q2 2013: 1.75) million euros; the share of the owners of the Company was 5.97 (Q2 2013: 1.71) million euros. EPS in the Q2 was 0.34 (Q2 2013: 0.10) euros. Overall, the consolidated net profit of the H1 2014 was 6.33 million euros, being 2.6 times better. The share of the owners of the Company was 6.36 million euros. EPS in the H1 was 0.37 (H1 2013: 0.14) euros.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-6/2014

AS HARJU ELEKTER
BALANCE SHEET, 30.06.2014
Consolidated, unaudited
Group
EUR’000
ASSETS 30.06.14 31.12.13
Cash and cash equivalents 3 252 4 102
Available-for-sale financial assets 112 0
Trade receivables and other receivables 7 912 5 699
Prepayments 414 256
Prepaid income tax 64 41
Inventories 9 352 5 801
TOTAL CURRENT ASSETS 21 106 15 899
Deferred income tax asset 7 7
Investments in associates 4 413 3 598
Other long-term financial investments 22 922 31 339
Investment property 11 566 11 663
Property, plant and equipment 8 184 8 129
Intangible assets 3 774 436
Total non-current assets 50 866 55 172
TOTAL ASSETS 71 972 71 071
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 941 654
Trade payables and other payables 8 547 4 437
Tax liabilities 1 057 969
Income tax liabilities 136 15
Short-term provision 25 36
TOTAL CURRENT LIABILITIES 10 706 6 111
NON-CURRENT LIABILITIES 1 139 1 141
TOTAL LIABILITIES 11 845 7 252
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 23 167 31 424
Retained earnings 23 292 18 635
TOTAL OWNERS’ EQUITY 58 879 62 479
Non-controlling interests 1 248 1 340
TOTAL EQUITY 60 127 63 819
TOT.LIABILIT.AND OWNERS’ EQUITY 71 972 71 071
INCOME STATEMENT,  1-6/2014
Consolidated,unaudited
EUR’000
GROUP Q2 2014 Q2 2013 H1 2014 H1 2013
NET SALES 11 092 13 060 20 753 24 450
Cost of goods sold -9 170 -10 716 -17 137 -20 384
Gross profit 1 922 2 344 3 616 4 066
Marketing expenses -646 -704 -1 296 -1 304
Administrative expenses -929 -1 045 -1 899 -1 984
Other revenue 26 1 35 18
Other expenses -11 -17 -38 -28
Operating profit 362 579 418 768
Finance income 5 531 955 5 548 1 417
Finance costs -9 -15 -16 -23
Income from subsidiaries 491 608 815 683
Profit from normal operations 6 375 2 127 6 765 2 845
Corporate Income tax -421 -375 -440 -375
Profit after taxes, incl 5 954 1 752 6 325 2 470
Net profit for the year 5 970 1 705 6 361 2 403
Non-controlling interest -16 47 -36 67
Basic earnings per share  (EUR) 0,34 0,1 0,37 0,14
Diluted earnings per share  (EUR) 0,34 0,1 0,37 0,14

Interim report 1-6/2014

Karin Padjus
FO
+372 674 7403

AS Harju Elekter sold its holding in AS Draka Keila Cables

Today, on 9th of July 2014 AS Harju Elekter and Prysmian Finland Oy concluded a contract 
according to which AS Harju Elekter sells their 34% holding in AS Draka Keila Cables to 
the core investor Prysmian Group. In the negotiations, the final price of the sales 
transaction was established at 6.2 million euros. According to the first semi-annual consolidated 
financial report of AS Harju Elekter, the value of AS Draka Keila Cables is estimated at 4.2 million euros. 
This means that the presumed profit from the transaction is 2.0 million euros, which will be written under 
finance income in the Group’s profit report for the third quarter.
Selling the holding was a strategic decision of Harju Elekter Group, making it possible to put more focus 
on the management of the enterprises in its main activity area and the expansion to the field of electrical 
engineering, incl. financing the purchase of Finnkumu Oy, the largest substation manufacturer in Finland. 
AS Harju Elekter is going to continue close cooperation with AS Draka Keila Cables in the procurements 
of low voltage and other cable products; similarly long-term rental contracts of production facilities are 
going to remain in force.
Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well 
as well-known and respected in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment 
in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%), Finnkumu 
Oy (100%) and Rifas UAB (63%), as well as the telecommunications products manufacturer AS Harju Elekter 
Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has financial investments in the Latvian electrical 
equipment sales company SIA Energokomplekss (14%) and in the Finnish public listed company PKC 
Group Oyj (5%).

Prysmian Group is world leader in the energy and telecom cables and systems industry. With more than 130
years of experience, sales of €7 billion in 2013, about 19,000 employees across 50 countries and 91 plants,
the Group is strongly positioned in high-tech markets and offers the widest range of products, services, technologies
and know-how.

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ OMX Tallinn’s
Rules and Regulations. The management board and the supervisory board members of AS Harju Elekter are not
personally interested in this transaction in any other way.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Additional information: Andres Allikmäe, Managing Director of AS Harju Elekter; Endel Palla, Chairman of the
Supervisory Board (+372 674 7400).

Prepared by:
Moonika Vetevool
Corporate communication and IR manager
+372 671 2761

 

Group’s Finnish subsidiary purchases Finnkumu Oy

On 17 June 2014, Satmatic Oy, a subsidiary of AS Harju Elekter in Finland, signed a contract for the purchase of all shares in Finnkumu Oy, Finland’s largest 
pre-fabricated substation producer. After the transaction, Finnkumu Oy will continue to operate under its own name and brand as a wholly-owned subsidiary of 
Satmatic Oy. By purchasing Finnkumu Oy, the Group will increase our market share in Finland as well as elsewhere in Scandinavia and increases the product range.

Simo Puustelli, Managing Director of Satmatic Oy, was appointed Chairman and Endel Palla, Andres Allikmäe, Ülo Merisalu (Managing Director of AS Harju Elekter Elektrotehnika) and Matti Ollila was appointed Member of the Management Board of Finnkumu Oy. Matti Ollila will also continue as a Managing Director of Finnkumu Oy.

The transaction took effect on 17 June 2014, which is also when accounts were settled. For the purchase transaction, EUR 6,575 thousand was paid. Pursuant to the contract, after the audited annual report is approved, in 2015 an additional 50% of the company’s operating profit in 2014, and in 2016 an additional 40% of the company’s operating profit in 2015 shall be paid to the sellers. The purchase transaction was funded out of the own funds of AS Harju Elekter.

Finnkumu Oy, financial summary 2011–2013
1000 euros 2013 2012 2011  
Cash and cash equivalents 820 413 512  
Securities 374 174 155  
Trade receivables 811 935 389  
Inventories 1 504 925 532  
Non-current assets 43 32 31  
Total assets 3 552 2 479 1 619  
Current liabilities 804 834 327  
Equity 2 748 1 645 1 292  
   incl. share capital 24 24 254  
Revenue 10 391 6 634 4 126  
EBIT 1 626 884 419  
Net profit 1 250 664 273  
Basic earnings per share (EUR) 511 271 108  
Number of shares 2 448 2 448 2 540  
Dividend per share 88 60 45  
Since the end of the previous financial year there are no significant changes in the Finnkumu’s business activities. We confirm that there are no valid contracts between 
Group’s enterprises and Finnkumu Oy, and Finnkumu Oy has no loans or any court or arbitration proceedings involving the commercial undertaking.

Satmatic Oy is the leading producer of automated industrial equipment and the importer and distributor of the Group’s products in Finland. The company’s headquarter 
located in Ulvila and plants in Ulvila and in Kerava. In 2013, the enterprise’s turnover amounted to EUR 19.7 (2012: 21.3) million, and there are 76 employees working in 
the enterprise.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well as well-known and respected in Scandinavia. Harju Elekter Group 
includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (63%), as 
well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has a holding in the affiliated company 
AS Draka Keila Cables (34%) and financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in the Finnish publicly listed 
company PKC Group Oyj (5%).

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ OMX Tallinn’s Rules and Regulations. The management board and the supervisory board members of AS Harju Elekter are not personally interested in this transaction in any other way.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Additional information: Andres Allikmäe, Managing Director of AS Harju Elekter; Endel Palla, Chairman of the Supervisory Board (+372 674 7400).

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Purchase of Finnkumu Oy approved by Supervisory Board

At their meeting on 10 June 2014, the supervisory board of AS Harju Elekter decided to approve the purchase of 100% of the shares in Finnkumu Oy, Finland’s largest producer of pre-fabricated substations, by Satmatic Oy, the Group’s subsidiary in Finland. The contract is due to be concluded on 17 June, whereupon Finnkumu Oy will become a wholly-owned subsidiary of Satmatic Oy. With the purchase of Finnkumu Oy, the Group will increase its market share in Finland and also elsewhere in Scandinavia and significantly expand its product range. The transaction is being financed by AS Harju Elekter; under the terms of the contract, its value will not be disclosed.

Finnkumu Oy is a leading Finnish enterprise involved in the planning, production and sale of electricity distribution devices, mainly pre-fabricated 
substations and distribution cabinets. In 2013, the company’s turnover amounted to EUR 10.4 (2012: 6.6) million and net profit EUR 1.25 (2012: 0.66) 
million euros.

Satmatic Oy is the leading producer of automated industrial equipment and the importer and distributor of the Group’s products in Finland. The 
company’s headquarters and plants are located in Ulvila and Kerava. In 2013, the enterprise’s turnover amounted to EUR 19.7 (2012: 21.3) million, and 
there are 76 employees working in the enterprise.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well as well-known and respected in Scandinavia. 
Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic
 Oy (100%) and Rifas UAB (63%), as well as the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In 
addition, AS Harju Elekter has a holding in the affiliated company AS Draka Keila Cables (34%) and financial investments in the Latvian electrical 
equipment sales company SIA Energokomplekss (14%) and in the Finnish publicly listed company PKC Group Oyj (5%).

The transaction does not constitute a transaction between related parties within the meaning of NASDAQ OMX Tallinn’s Rules and Regulations.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Additional information: Andres Allikmäe, Managing Director of AS Harju Elekter; Endel Palla, Chairman of the Supervisory Board (+372 674 7400).

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Notice on the decrease of an important holding

AS Harju Elekter announces the sale of 200,000 shares of PKC Group Oyj. The realisation of the financial investment created a financial return of 4.6 million euros, which is reflected in the profit for Q2 and has a significant impact on the Group’s earnings. Profit created from the sale of the shares is directed into the development and expansion of the Group’s main operations, investments, and potential takeovers.

Following this transaction, AS Harju Elekter owns 1,094,641 shares of PKC Group Oyj and their holding in the enterprise decreased to 4.6%.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Resolutions of AGM

Today, on 8 May 2014 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 93 shareholders and their authorised representatives who represented the total of 11,409,796 votes accounting for 65.57 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2013;
2. Approval to profit distribution;
3. Election of the new supervisory board member to replace the resigned member

1. Approval to AS Harju Elekter annual report of the year 2013

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2013, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 71,071 thousand euros as of 31.12.2013, while the turnover of the financial year was 48,288 thousand euros and net profit 5,162 thousand euros.

The number of the votes given in favor of the resolution was 11,409,589 which accounted for 100.00 % of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2013 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2013 13,473 thousand euros
total net profit of the financial year  5,162 thousand euros
total retained profit on 31.12.2013 18,635 thousand euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,10 euros per share*)  1,740 thousand euros
balance carried forward after profit distribution 16,895 thousand euros

The dividends will be paid to the shareholders on 27 May 2014 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 22 May 2014 at 23.59 shall be entitled to dividend.

The number of the votes given in favor of the resolution was 11,394,226 which accounted for 99.86 % of the voted participants.

3. Election of the new supervisory board member to replace the resigned member

The general meeting resolved:
Accordance with § 319 (7) of the Commercial Code, to acknowledge the letter of resignation of Mr Madis Talgre from the supervisory board from 8th of May 2014, dated 16.04.2014 and to elect Mr Aare Kirsme as the new supervisory board member of AS Harju Elekter. Mandate enters into force date of this decision. Mr Kirsme has submitted his written acceptance on becoming the new supervisory board member of AS Harju Elekter.

The number of the votes given in favor of the resolution was 11,375,476 which accounted for 99.70 % of the voted participants.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Financial results, 1-3/2014

January – March Year
2014 2013 2013
Revenue (EUR’000) 9,661 11,390 48,288
Gross profit (EUR’000) 1,701 1,721 8,458
EBITDA (EUR’000) 441 555 3,269
EBIT (EUR’000) 56 188 1,743
Profit for the period (EUR’000) 371 717 5,173
incl attributed to Owners of the Company 391 698 5,162

Business at the beginning of this year has started more slowly than in previous years. In the accounting quarter, the Group’s consolidated revenue was 9.7 million euros, which was 15% lower compared to the reference period. More than 80% of the return on sales originated from the sale of electrical equipment. The sale of electrical equipment decreased 16.5% in the reporting quarter, which was also the main reason for the decline in sales revenue. 64.0% of the Group’s products and services were sold in foreign markets, outside Estonia (Q1 2013: 65.3%) and 81% revenues received from the Group’s companies home markets – Estonia, Finland and Lithuania. The biggest contribution to the decline in sales volumes came from the Lithuanian segment, where sales revenue decreased by one half with respect to the comparable period and this was mainly caused by the decline in revenue received from various projects. The biggest markets of the Group are Estonia and Finland; accordingly, the sales volumes of the Group are strongly influenced by the events taking place on these markets. In the reporting quarter, 45% (Q1 2013:47%) of the Group’s products and services were sold on the Finnish and 36% (Q1 2013:35%) in Estonian market.

The Finnish industrial sector remains in recession, and once again we have to recognise the 10% drop in the sales volumes of the technology sector, compared to Q1 2013. Finland is the biggest market of the Group; accordingly, the sales volumes of the Group are strongly influenced by the events taking place on this market. In the reporting quarter, 45% of the Group’s products and services were sold on the Finnish market (Q1 2013: 47%).

In the reporting quarter, the operating expenses decreased by 14.5%, including the cost of sales by 1.7 million euros or by 17.7% to 8.0 million euros. Since the cost of sales decreased at a pace that exceeded the return on sales, the gross profit margin improved by 2.5 percentage points to 17.6% in comparison to the indicator for the comparable period.

In the reporting quarter, the distribution costs increased by 52,000 euros to 651,000 euros, the rate of distribution costs to revenue accounted for 6.7% (Q1 2013: 5.3%). Administrative expenses increased by 4% to 976,000 euros, and the rate of administrative expenses to revenue accounted for 10.1%, having increased by 1.9 percentage points.

In Q1 2014, the average 440 people worked in the Group − on the average by 22 persons less than in the reference period. In the first quarter, employee wages and salaries totalled 2,170 (Q1 2013: 2,108) thousand euros. The average wages per employee per month amounted 1,645 (2013 Q1: 1, 520) euros. In the second half of 2013, the salaries of the Group’s employees were adjusted, which was also the main cause of the increase in fixed costs. In the reporting quarter the labour and salary costs increased by 2.9%, which also brought with it a decrease in the operating profit margin.

The Group’s operating profit of Q1 2014 was 56 (Q1 2013: 188) thousand euros and EBITDA 441 (Q1 2013: 555) thousand euros. Return of sales for the accounting quarter was 0.6% (Q1 2013: 1.7%) and return of sales before depreciation 4.6% (Q1 2013: 4.9%).

Group consolidated from the associated company a profit of 324,000 (Q1 2013: 75,000) euros.

Overall, the consolidated net profit of the Q1 2014 was 371,000 (Q1 2013: 717,000) euros, and the Q1 2013 figure includes the profit from the sale of financial assets in the amount of 453,000 euros.  The share of the owners of the Company in Q1 2014 was 391,000 (Q1 2013: 698,000) euros and EPS was 0.02 (Q1 2013: 0.04) euros.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-3/2014

AS HARJU ELEKTER
BALANCE SHEET, 31.03.2014
Consolidated, unaudited
Group
EUR’000
ASSETS 31.03.14 31.12.13
Cash and cash equivalents 4 186 4 102
Trade receivables and other receivables 5 928 5 699
Prepayments 363 256
Prepaid income tax 54 41
Inventories 6 812 5 801
TOTAL CURRENT ASSETS 17 343 15 899
Deferred income tax asset 6 7
Investments in associates 3 922 3 598
Other long-term financial investments 29 319 31 339
Investment property 11 676 11 663
Property, plant and equipment 8 066 8 129
Intangible assets 498 436
Total non-current assets 53 487 55 172
TOTAL ASSETS 70 830 71 071
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 582 654
Trade payables and other payables 6 151 4 437
Tax liabilities 761 969
Income tax liabilities 15 15
Short-term provision 32 36
TOTAL CURRENT LIABILITIES 7 541 6 111
NON-CURRENT LIABILITIES 1 141 1 141
TOTAL LIABILITIES 8 682 7 252
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 29 394 31 424
Retained earnings 19 044 18 635
TOTAL OWNERS’ EQUITY 60 858 62 479
Non-controlling interests 1 290 1 340
TOTAL EQUITY 62 148 63 819
TOT.LIABILIT.AND OWNERS’ EQUITY 70 830 71 071
INCOME STATEMENT,  1-3/2014
Consolidated,unaudited
EUR’000
GROUP     Q1 2014   Q1 2013
NET SALES 9 661 11 390
Cost of goods sold -7 960 -9 669
Gross profit 1 701 1 721
Marketing expenses -651 -599
Administrative expenses -976 -939
Other revenue 9 17
Other expenses -27 -12
Operating profit 56 188
Finance income 17 462
Finance costs -8 -8
Income from subsidiaries 324 75
Profit from normal operations 389 717
Corporate Income tax -18 0
Profit after taxes, incl 371 717
Net profit for the year 391 698
Non-controlling interest -20 19
Basic earnings per share  (EUR) 0,02 0,04
Diluted earnings per share  (EUR) 0,02 0,04

Interim report 1-3/2014

Karin Padjus
FO
+372 674 7403

Commencement of negotiations

AS Harju Elekter announces that Satmatic Oy, the Group’s subsidiary in Finland, has started negotiations with Finnkumu Oy, Finland’s largest pre-fabricated substation producer. Successful negotiations will increase market share in Finland and may also lead to the acquisition of the company’s shares.

Finnkumu Oy is a leading Finnish enterprise involved in the planning, production and sale of electricity distribution devices, mainly pre-fabricated substations and distribution cabinets. In 2013, the company’s turnover amounted to EUR 10.4 (2012: 6.6) million.

Satmatic Oy is the leading producer of automated industrial equipment and the importer and distributor of the Group’s products in Finland. The company’s headquarters and plant are located in Ulvila. In 2013, the enterprise’s turnover amounted to EUR 19.7 (2012: 21.3) million, and there are 76 employees working in the enterprise.

Harju Elekter is the leading MV/LV electrical and engineering devices producer in the Baltic States as well as well-known and respected in Scandinavia. Harju Elekter Group includes manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (63%), as wellas the telecommunications products manufacturer AS Harju Elekter Teletehnika (100%) in Estonia. In addition, AS Harju Elekter has a holding in the affiliated company AS Draka Keila Cables (34%) and financial investments in the Latvian electrical equipment sales company SIA Energokomplekss (14%) and in the Finnish publicly listed company PKC Group
Oyj (5%).

Andres Allikmäe
Manager
+372 674 7400

Additional information: Andres Allikmäe, Manager of AS Harju Elekter; Endel Palla, Chairman of the Supervisory Board (+372 674 7400).

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Audited annual report 2013

The year 2013 audited annual report of AS Harju Elekter as well as the yearbook are available on the Internet homepage of NASDAQ OMX Tallinn and on the company’s homepage http://www.harjuelekter.ee

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
+372 671 2761

Resignation Application from a Member of the Supervisory Board

AS Harju Elekter hereby informs that today, on 16 April 2014, a member of the Supervisory Board of AS Harju Elekter Mr Madis Talgre presented to the company an application for his resignation from the position of AS Harju Elekter Supervisory Board member, effective as of 8th of May 2014. Mr Talgre requested this application would be provided to the AGM.

AS Harju Elekter is grateful for the contribution that Mr Madis Talgre, as a member of the Supervisory Board of AS Harju Elekter, has made to the development of the company.

Andres Allikmäe
Managing Director
+372 674 7400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
Tel: +372 671 2761

Invitation, agenda and proposals to the AGM of shareholders

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 8 May 2014, beginning at 10:00 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2013.
To approve the annual report of AS Harju Elekter of 2013, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 71,071 thousand euros as of 31.12.2013, while the turnover of the financial year was 48,288 thousand euros and net profit 5,162 thousand euros.

2. Approval to profit distribution.
To approve the profit distribution proposal of AS Harju Elekter of 2013 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2013 13,473 thousand euros
total net profit of the financial year  5,162 thousand euros
total retained profit on 31.12.2013 18,635 thousand euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,10 euros per share*)  1,740 thousand euros
balance carried forward after profit distribution 16,895 thousand euros

The dividends will be paid to the shareholders on 27 May 2014 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 22 May 2014 at 23.59 shall be entitled to dividend.

3. Election of the new supervisory board member to replace the resigned member
3.1. To acknowledge the letter of resignation of Mr Madis Talgre from the supervisory board from 8th of May 2014, dated 16.04.2014;
3.2. To elect Mr Aare Kirsme as the new supervisory board member of AS Harju Elekter. Mandate enters into force date of this decision. Mr Kirsme has submitted his written acceptance on becoming the new supervisory board member of AS Harju Elekter.

Information concerning the procedure for and term of exercising the rights specified in § 287 of the Commercial Code, § 293 (2), § 293 (3) and § 2931 (4) is available on the website of AS Harju Elekter: www.harjuelekter.ee

Since 17.4.2014 the annual report of 2013, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Road. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 1.05.2014. Registration of the participants starts on 8 May 2014 at 9 a.m. For the registration we ask you to take with you an identification document. A representative of shareholder is requested to take with him/her a document certifying their right of representation or a valid copy of the commercial register card.

Andres Allikmäe
Managing Director/CEO
+372 6747 400

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
Tel: +372 671 2761

AS Harju Elekter consolidated unaudited results for Q4 and 12 months 2013

In the accounting quarter, the Group’s consolidated revenue was 12.3 million euros, which was 2.2% lower compared to the reference period. Operating profit of Q4 2013 was 214,000 euros, increasing by 28.1%. The consolidated net profit of the Q4 increased by 56.0% and was 298,000 euros.

The Group’s twelve month sales revenue was 48.3 million euros, which was 8.5% lower compared the reference period. The operating profit decreased by 11.5% to 1.74 million euros, but net profit increased by 43.6% to 5.17 million euros, in 12-months period.

Change % October – December Change % January – December
(thousand euros) 2013 2012 2013 2012
Revenue -2.2 12,288 12,565 -8.5 48,288 52,801
Gross profit 10.2 2,131 1,933 -2.3 8,458 8,653
EBITDA 16.1 627 540 -4.9 3,269 3,439
EBIT 28.1 214 167 -11.5 1,743 1,970
Profit for the period 56.0 298 191 43.6 5,173 3,603
incl attributed to Owners of the Company 58.0 327 207 46.8 5,162 3,517
EPS (EUR) 0.02 0.01 0.30 0.21

The decrease in consolidated sales revenue was caused by a decrease in sales and commissions in the production segment, which accounted for about 90% of sales revenue this year. Around 83% of the sales revenue came from the production and sale of electrical equipment. In 2013, the production and sales volume of electrical devices was 40.0 million euros, being 4.1 million euros lower compared to the reference period. The greatest setbacks in the production volumes of electrical devices occurred in the segments of Finland (-2.2 million euros) and Lithuania (-1.2 million euros).

Home markets were still dominant. Export markets lost some of their significance and their development will depend largely on the activeness of our key clients in the respective countries.

In 2013, one-off projects in Belgium, Malaysia, Belarus and Switzerland were concluded, but also some new projects were started in the United States. Deliveries to Norway and Russia have increased, and in the last couple of years these countries have increasingly joined the Group’s other target markets.

63% of the Group’s products and services were sold in foreign markets, outside Estonia (2012: 66%) and 93% revenues received from the Group’s companies home markets – Estonia, Finland, Sweden, Lithuania.

In the reporting quarter, the operating expenses decreased by 2.5% to 12.1 million euros, including the cost of sales by 4.5% to 10.2 million euros. In the reporting quarter, doubtful receivables in the total amount of 155,000 euros were written off. All in all, the distribution costs and administrative expenses were stable, on the same level as a year before; costs related to sold products decreased by 4.3 million euros (a tenth) and operating expenses totally by 8.5% to 46.5 million euros.

As at the balance day on 31 December, there were 451 people working in the Group, which were 27 employees less than in the beginning of the year. In Q4 2013, the average 436 people worked in the Group − on the average by 21 persons less than in the reference period. During the 12 months, the average number of employees increased by 3 persons up to 455 employees. Labour costs decreased by 1.6% to 2.9 million euros in accounting quarter and by 4.3% to 11.4 million euros during 12-months period. In the fourth quarter, employee wages and salaries totalled 2,247 (Q4 2012: 2,314) thousand euros and during the 12 months 8,645 (2012: 9,139) thousand euros. The average wages per employee per month amounted 1,584 (2012: 1,684) euros.

During 12 months, the amount of the consolidated balance sheet increased by 11.5 million euros and as of 31 December 2013, and was 71.1 million euros. Most of the growth derived from value adjustment of long-term financial investments. The market price of PKC Group Oyj shares increased in accounting quarter by 0.24 (Q4 2012: 1.40) euros and the share price in Helsinki Stock Exchange in last trading day of December was 24.19 (a year before: 15.43) euros. During 12 months, the market price of PKC Group Oyj shares increased by 8.76 (2012: 4.00) euros. The cost of investment in assets and reserves in equity capital increased by the profit of 11.7 (2012: 5.5) million euros, received from stock revaluation.

During the year 2013, the Group’s investments to real estate, tangible fixed assets and intangible fixed assets totalling 2.32 (2012: 0.84) million euros. At the balance date 31 December 2013, fixed assets amounted 77.6% (31.12.2012: 72.4%) of the cost of assets.

During 12 months, cash and cash equivalents increased by 0.76 million euros to 4.10 million euros; within the comparable period, cash and cash equivalents increased by 2.5 million euros to 3.35 million euros.

As at December 31 2013 AS Harju Elekter had 1,500 shareholders. The largest shareholder of AS Harju Elekter is AS Harju KEK, a company based on local capital which held 32.0 % of AS Harju Elekter’s share capital.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-12/2013

AS HARJU ELEKTER
BALANCE SHEET, 31.12.2013
Consolidated, unaudited
Group
EUR’000
ASSETS 31.12.13 31.12.12
Cash and cash equivalents 4 102 3 352
Trade receivables and other receivables 5 699 6 493
Prepayments 256 232
Prepaid income tax 41 0
Inventories 5 801 6 395
TOTAL CURRENT ASSETS 15 899 16 472
Deferred income tax asset 7 5
Investments in associates 3 598 2 295
Other long-term financial investments 31 339 21 386
Investment property 11 663 10 454
Property, plant and equipment 8 129 8 546
Intangible assets 436 451
Total non-current assets 55 172 43 137
TOTAL ASSETS 71 071 59 609
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 654 1 075
Trade payables and other payables 4 437 5 902
Tax liabilities 969 1 049
Income tax liabilities 15 75
Short-term provision 36 23
TOTAL CURRENT LIABILITIES 6 111 8 124
NON-CURRENT LIABILITIES 1 141 1 349
TOTAL LIABILITIES 7 252 9 473
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 31 424 21 354
Retained earnings 18 635 15 008
TOTAL OWNERS’ EQUITY 62 479 48 782
Non-controlling interests 1 340 1 354
TOTAL EQUITY 63 819 50 136
TOT.LIABILIT.AND OWNERS’ EQUITY 71 071 59 609
INCOME STATEMENT,  1-12/2013
Consolidated,unaudited
EUR’000
GROUP Q4 2013 Q4 2012 2013 2012
NET SALES 12 288 12 565 48 288 52 801
Cost of goods sold -10 157 -10 632 -39 830 -44 148
Gross profit 2 131 1 933 8 458 8 653
Marketing expenses -737 -658 -2 627 -2 801
Administrative expenses -1 169 -1 088 -4 067 -3 876
Other revenue 8 1 38 49
Other expenses -19 -21 -59 -55
Operating profit 214 167 1 743 1 970
Net financial incomes/expenses -14 -6 2 602 997
Income from subsidiaries 153 104 1 303 1 118
Profit from normal operations 353 265 5 648 4 085
Corporate Income tax -55 -74 -475 -482
Profit after taxes 298 191 5 173 3 603
Profit attributable to:
   Owners of the Company 327 207 5 162 3 517
   Non-controlling interest -29 -16 11 86
Basic earnings per share (EUR) 0,02 0,01 0,3 0,21
Diluted earnings per share (EUR) 0,02 0,01 0,3 0,21
Karin Padjus
FO
Tel +372 674 7403

Interim report Q4 and 1-12/2013

ANNUAL REPORT 2013

Suspension of the activities of Swedish subsidiary Harju Elekter AB

According to the 27 February 2014 decision of the Supervisory board of AS Harju Elekter to reorganise the Group’s Sweden-oriented activities, as of 1 April 2014, the activities of Swedish subsidiary Harju Elekter AB will be suspended for an unspecified term.

Founded in 2010, subsidiary Harju Elekter AB has acquired a fully functional client base during these three years. According to the Group’s development strategy, Scandinavia and Sweden continue to be important target markets, but the reason behind this step was the inefficient and cost-intensive business model that was implemented between 2011 and 2013. While sales volumes continued to increase year by year, the relatively steep costs did not make it possible to reach the desired business results.

As at 31.12.2013, Harju Elekter AB’s balance sheet total in the Group’s assets was 0.25%, making up 184,000 euros (31.12.2012: 342, 000 euros). The company’s sales revenue in 2013 was 703,000 euros (2012: 532,000 euros), making up 1.4% and 1.0% of the consolidated sales revenue, respectively. The financial year resulted in a loss of 190,000 euros (2012: 140,000 euros).

After the reorganisation, responsibility for the Group’s Sweden-oriented business activities and the local clients will be taken over by the sales and development teams of Harju Elekter’s subsidiary AS Harju Elekter Elektrotehnika, along with partner agents based in Sweden. All unfinished projects will be carried over to AS Harju Elekter Elektrotehnika, who will continue with active sales and participation in tenders. After the reorganisation, the main focus will be put on efficient development and sales.

AS Harju Elekter is a leading manufacturer of MV/LV electrical equipment and automation solutions in the Baltic countries and well-known producer in Scandinavia. Harju Elekter Group includes the manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (63%), as well as the manufacturer of telecommunications products AS Harju Elekter Teletehnika (100%), Harju Elekter also has a related company AS Draka Keila Cables (34%) as well as financial investments in the Latvian seller of electrical equipment SIA Energokomplekss (14%) and the Finnish company PKC Group Oyj (5%).

Andres Allikmäe
CEO/Managing director
Tel: +372 674 7400

Additional information: Andres Allikmäe, Managing director and Endel Palla, Chairman of the Supervisory Board (tel: +372 674 7449).

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
Tel: +372 671 2761

Publication of financial reports in 2014

AS Harju Elekter wishes to the shareholders a Happy New Year and informs you that in the year 2014, the consolidated financial results of AS Harju Elekter will be published as fallowing:

2013 4Q results                      28.02.2014
2014 1Q results                      06.05.2014
AGM                                      08.05.2014
2014 2Q results                      06.08.2014
2014 3Q results                      05.11.2014

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Managing Director
+372 674 7400

Publication of financial reports in 2014

AS Harju Elekter wishes to the shareholders a Happy New Year and informs you that in the year 2014, the consolidated financial results of AS Harju Elekter will be published as fallowing:

2013 4Q results                      28.02.2014
2014 1Q results                      06.05.2014
AGM                                      08.05.2014
2014 2Q results                      06.08.2014
2014 3Q results                      05.11.2014

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Managing Director
+372 674 7400

Financial results, 1-9/2013

The Group’s 9 months sales revenue was 36.0 million euros and in the accounting quarter 11.6 million euros. From the beginning of the year, the operating profit has grown steadily quarter to quarter reached 0.8 million in the Q3 and being almost on the same level as in comparable periods. In the accounting quarter, EBIT improved by 1 percentage point and was 6.6% (Q3 2012: 5.6%). In the 9 months-period, operating profit amounted 1.5 million euros and EBIT was 4.2% (9M 2012: 4.5%). Overall, the consolidated net profit of the 9M 2013 increased to 4.9 million euros and to 2.4 million euros in Q3 2013. EPS in 9 months was 0.28 (9M 2012: 0.20) euros and in third quarter 0.14 (Q3 2012: 0.07) euros.

Change July – September Change January – September Year
(thousand euros) % 2013 2012 % 2013 2012 2012
Revenue -20.3 11,551 14,486 -10.5 36,000 40,236 52,801
Gross profit -7.1 2,262 2,435 -5.5 6,327 6,694 8,653
EBITDA -4.6 1,136 1,191 -9.4 2,643 2,918 3,439
EBIT -6.6 763 817 -16.0 1,531 1,822 1,970
Profit for the period 81.5 2,407 1,326 42.1 4,876 3,431 3,603
incl attributed to Owners of the Company 93.6  2,432  1,256 45.2 4,835 3,329  3,517

The decrease in consolidated sales revenue was caused by a decrease in sales and commissions in the production segment, which accounted for about 90% of sales revenue this year. Around 83% of the sales revenue came from the production and sale of electrical equipment. In the accounting quarter, both the production and sales volume of electrical devices decreased by 2.8 million euros, reaching 9.5 million euros, and in the period of 9 months, by 4.0 million euros reaching 29.8 million euros. The greatest setbacks in the production volumes of electrical devices occurred in the segments of Finland (-3.0 million euros) and Lithuania (-0.9 million euros).

61% of the Group’s products and services were sold in foreign markets, outside Estonia (9M 2012: 65%) and 93% revenues received from the Group’s companies home markets  – Estonia, Finland, Sweden, Lithuania.

In the reporting quarter, operating costs decreased 21%; with 23% lower costs related to the sale of products and services and 7% lower costs related to administration and distribution. During the first nine months of the year, costs related to sold products decreased by 3.9 million euros to 29.7 million euros, resulting in a gross profit margin of 17.6% with an improvement of 1 percentage point.

In Q3 2013, the average 454 people worked in the Group − on the average by 25 persons less than in the reference period. During the first 9 months, the average number of employees decreasing by 24 persons. In Q3 2013, the average 457 people worked in the Group − on the average by 10 persons less than in the reference period. During the first 9 months, the average number of employees decreased by 10 persons up to 461 employees. Because of that, in the reporting quarter, labour costs decreased by 8.0% and by 5% during 9 months-period. In the third quarter, employee wages and salaries totalled 1,985 (Q3 2012: 2,206) thousand euros and during the first 9 months 6,398 (9M 2012: 6,826) thousand euros. The average wages per employee per month amounted 1,538 (9M 2012: 1,683) euros.

During 9 months, the amount of the consolidated balance sheet increased by 13.1 million euros and compared to the period under review by 13.7 million euros, and as of 30 September 2013, was 72.7 million euros. Most of the growth derived from value adjustment of long-term financial investments. The market price of PKC Group Oyj shares increased in accounting quarter by 5.75 (Q3 2012: 1.90) euros and the share price in Helsinki Stock Exchange in last trading day of September was 23.95 (a year before: 14.03) euros. During nine months, the market price of PKC Group Oyj shares increased by 8.52 (9M 2012: 2.60) euros. The cost of investment in assets and reserves in equity capital increased by the profit of 11.4 (9M 2012: 3.6) million euros, received from stock revaluation. In third quarter, AS Harju Elekter bought 11 ha of production land on the outskirts of Tallinn, in Allika Industrial Park, with the objective being future industrial real estate development. During the 9-months period, the Group’s investments to real estate, tangible fixed assets and intangible fixed assets totalling 1.98 (9M 2012: 0.53) million euros.

At the balance date 30 September 2013, fixed assets amounted 75.4% (30 September 2012: 70.1%) and owners’ equity 86.9% (30 September 2012: 82.0%) of the cost of assets.

The Group’s 9-month current ratio and the quick ratio improved both by 0.3, compared to the reference period, being 2.1 and 1.3.

As at September 30 2013 AS Harju Elekter had 1,481 shareholders. The largest shareholder of AS Harju Elekter is AS Harju KEK, a company based on local capital which held 32.0 % of AS Harju Elekter’s share capital.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-9/2013

AS HARJU ELEKTER
BALANCE SHEET, 30.09.2013
Consolidated, unaudited
Group
EUR’000
ASSETS 30.09.13 31.12.12
Cash and cash equivalents 3 320 3 352
Trade receivables and other receivables 6 867 6 493
Prepayments 507 232
Prepaid income tax 46 0
Inventories 7 186 6 395
TOTAL CURRENT ASSETS 17 926 16 472
Deferred income tax asset 4 5
Investments in associates 3 445 2 295
Other long-term financial investments 31 028 21 386
Investment property 10 135 10 454
Property, plant and equipment 9 789 8 546
Intangible assets 397 451
Total non-current assets 54 798 43 137
TOTAL ASSETS 72 724 59 609
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 1 155 1 075
Trade payables and other payables 5 926 5 902
Tax liabilities 1 077 1 049
Income tax liabilities 0 75
Short-term provision 28 23
TOTAL CURRENT LIABILITIES 8 186 8 124
NON-CURRENT LIABILITIES 1 349 1 349
TOTAL LIABILITIES 9 535 9 473
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 31 111 21 354
Retained earnings 18 289 15 008
TOTAL OWNERS’ EQUITY 61 820 48 782
Non-controlling interests 1 369 1 354
TOTAL EQUITY 63 189 50 136
TOT.LIABILIT.AND OWNERS’ EQUITY 72 724 59 609
INCOME STATEMENT,  1-9/2013
Consolidated,unaudited
EUR’000
GROUP Q3 2013 Q3 2012 M9 2013 M9 2012
NET SALES 11 551 14 486 36 000 40 236
Cost of goods sold -9 289 -12 051 -29 673 -33 542
Gross profit 2 262 2 435 6 327 6 694
Marketing expenses -586 -759 -1 890 -2 113
Administrative expenses -913 -855 -2 897 -2 773
Other revenue 13 8 32 48
Other expenses -13 -12 -41 -34
Operating profit 763 817 1 531 1 822
Net financial incomes/expenses 1 221 9 2 615 1 003
Income from subsidiaries 467 561 1 150 1 014
Profit from normal operations 2 451 1 387 5 296 3 839
Corporate Income tax -44 -61 -420 -408
Profit after taxes 2 407 1 326 4 876 3 431
Profit attributable to:
   Owners of the Company 2 432 1 256 4 835 3 329
   Non-controlling interest -25 70 41 102
Basic earnings per share (EUR) 0,14 0,07 0,28 0,2
Diluted earnings per share (EUR) 0,14 0,07 0,28 0,2

Interim report 1-9/2013

Karin Padjus
FO
+372 674 7403

The subsidiary of AS Harju Elekter signed a large volume contract

AS Harju Elekter’s subsidiary AS Harju Elekter Elektrotehnika won the public procurements for purchasing substations organised by Eesti Energia’s subsidiary Elektrilevi OÜ. As a result of successful negotiations, two large-scale framework agreements with a term of validity of three years were signed. According to the terms of the agreement, the agreements shall be extend automatically on two occasions for a term of one year, if the parties do not notify a wish to terminate the agreement.

According to the signed agreements, AS Harju Elekter Elektrotehnika shall supply OÜ Elektrilevi within three years with about 2,000 pre-fabricated 1- and 2-transformer substations. The supplied automated substations are, thanks to technological developments, becoming an integral part of the “smart grid”, allowing for the remote management of substations and the monitoring of electricity quality. Devices used in substations allow for a partial self-recovery of the grid in case of a failure, meaning that the self-healing system allows one to reduce the scope and duration of blackouts resulting from failures, at the same time checking the grid’s status at any moment and being able to prevent future failures. Substation supplies are directed to the Estonian market.

Harju Elekter is a leading manufacturer of electrical equipment and materials in the Baltic States and well-known producer in Scandinavia. Harju Elektri Grupp includes the manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (63%), as well as the manufacturer of telecommunications products AS Harju Elekter Teletehnika(100%) and the sales representative  Harju Elekter AB (90%) in Sweden. Harju Elekter also has a related company AS Draka Keila Cables (34%) as well as financial investments in the Latvian seller of electrical equipment SIA Energokomplekss (14%) and the Finnish company PKC Group Oyj (5%).

Andres Allikmäe
CEO/Managing director
Tel: +372 674 7400

Additional information: Manager of AS Harju Elekter Elektrotehnika Ülo Merisalu (Tel: +372 674 7449).

Financial results, 1-6/2013

The Group’s six month sales revenue was 24.5 million euros and in the accounting quarter 13.1 million euros. In H1, the operating profit amounted 0.8 million euros and in the accounting quarter 0.6 million euros. Overall, the consolidated net profit of the H1 2013 increased to 2.5 million euros and to 1.8 million euros in Q2 2013.

Change April – June Change January – June Year
(thousand euros) % 2013 2012 % 2013 2012 2012
Revenue -7.2 13,060 14,079 -5.1 24,450 25,750 52,801
Gross profit -0.8 2,344 2,363 -4.6 4,066 4,259 8,653
EBITDA -4.2 952 993 -12.7 1,507 1,727 3,439
EBIT -8.1 579 630 -23.7 768 1,005 1,970
Profit for the period 15.8 1,752 1,513 17.3 2,470 2,105 3,603
incl attributed to Owners of the Company 14.2 1,705 1,493 15.9 2,403 2,073 3,517

In the reporting quarter, the consolidated sales volume dropped by 7% to 13.1 million euros compared to the indicator from the same period of last year, mainly as a result of decreased sales revenue from the Production segment. At the same time, Production segment sales volume was 1.5 million euros higher than in Q1 of the financial year and 500,000 euros higher than the indicator for the last quarter of last year. 89.3% of sales revenue came from the Production segment, 5.1% from real estate and 5.6% from unallocated activities. Around 83% of the sales revenue came from the production and sale of electrical equipment, its sales volume decreasing 9% to 11 million euros during the reporting quarter and 6% to 20.3 million euros during the first half of the year. The sale of electrical equipment usually increases in Q2 and Q3, while being more modest in Q1 and Q4. In Q2 2013 the sales volume of electrical equipment was 1.6 million euros higher than in Q1 2013.

63% of the Group’s products and services were sold in foreign markets, outside Estonia (H1 2012: 65.1%) and 92% revenues received from the Group’s companies home markets  – Estonia, Finland, Sweden, Lithuania. The largest target markets of the Group are Estonia and Finland, which is why the sales volumes of the Group are strongly influenced by the developments there. The Group’s sales on the Finnish market decreased by 1.3 million euros in the first half of the year to 11.3 million euros and by 1 million euros to 5.9 million euros in the reporting quarter, thus also decreasing the relative importance of the Finnish market in the consolidated sales revenues to 46.1%. 1.3% of the Group’s products and services were marketed in other EU countries and 7% outside the EU in the first half of the year.

Decreased production volumes have also resulted in decreased costs. In the reporting quarter, operating costs decreased 7.5%; with 8.5% lower costs related to the sale of products and services and 1.9% lower costs related to marketing. General administrative costs remained on the same level with the comparable period.

In Q2 2013, the average 464 people worked in the Group − on the average by 14 persons more than in the reference period. During the first 6 months, the average number of employees increasing by 21 persons up to 463 employees. However, in the reporting quarter, labour costs decreased by 2.1% to 3.1 million euros and wage costs decreased by 1.5% to 2.3 million euros, being in the first half of the year 3.9% and 4.5% respectively. In the second quarter, employee wages and salaries totalled 2,305 (Q2 2012: 2,339) thousand euros and during the first 6 months 4,414 (H1 2012: 4,619) thousand euros. The average wages per employee per month amounted 1,591 (2012 H1: 1,740) euros.

Operating profit of Q2 2013 was 579 (Q2 2012: 630) thousand euros and EBITDA 952 (Q2 2012: 993) thousand euros. Return of sales for the accounting quarter was 4.4% (Q2 2012: 4.5%) and return of sales before depreciation 7.3% being 0.1 per cent point better compering to the same period figure a year before. The operating profit before depreciation decreased by 12.7% up to 1.51 million euros and operating profit by 23.7% to 0.77 million euros. The decrease in operating profit was the result of the decrease of profitability in Group’s Finnish and Lithuanian subsidiaries in the first quarter. EBITDA was 6.2% (H1 2012: 6.7%) and EBIT 3.1% (H1 2012: 3.9%).

Dividend income in the reporting quarter was 948,000 (Q2 2012: 831,000) euros. In the first quarter, also 30,000 (Q1 2012: 15,400) PKC Group Oyj shares were sold and the financial income from selling the shares was 453,000 (Q1 2012: 175,000) euros. Totally, the net financial expenses have increased by 400,000 euros to 1.39 million euros. In Q2 2013, the Group consolidated from the associated company a profit of 608,000 (Q2 2012: 374,000) euros and during the first six months totally in amount of 0.68 (H1 2012: 0.45) million euros.

The consolidated net profit of the Q2 2013 was 1.75 (Q2 2012: 1.51) million euros, of which the share of the owners of the company was 1.71 (Q2 2012: 1.49) million euros. EPS in the Q2 was 0.10 (Q2 2012: 0.09) euros.  Overall, the consolidated net profit of the H1 2013 was 2.47 million euros, increasing by 17.3%. The share of the owners of the company was 2.40 million euros. EPS in the H1 was 0.14 (H1 2012: 0.12) euros.

During first six months cash flow from operating activities increased by 0,4 million euros, from investment activities by 1.2 million euros and cash out-flow from financial activities was 1.8 million euros; compared to the reference period the numbers were 1.2 million euros, 0.7 million euros and -1.5 million euros respectively. During the H1 2013, cash and cash equivalents decreased by 0.3 million euros to 3.1 million euros; within the comparable period, cash and cash equivalents increased by 0.4 million euros to 1.2 million euros.

 

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-6/2013

AS HARJU ELEKTER
BALANCE SHEET, 30.06.13
Consolidated, unaudited
Group
EUR’000
ASSETS 30.06.13 31.12.12
Cash and cash equivalents 3 087 3 352
Trade receivables and other receivables 7 479 6 493
Prepayments 318 232
Prepaid income tax 58 0
Inventories 6 837 6 395
TOTAL CURRENT ASSETS 17 779 16 472
Deferred income tax asset 4 5
Investments in associates 2 978 2 295
Other long-term financial investments 24 676 21 386
Investment property 10 245 10 454
Property, plant and equipment 8 298 8 546
Intangible assets 424 451
Total non-current assets 46 625 43 137
TOTAL ASSETS 64 404 59 609
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 847 1 075
Trade payables and other payables 6 733 5 902
Tax liabilities 1 042 1 049
Income tax liabilities 28 75
Short-term provision 45 23
TOTAL CURRENT LIABILITIES 8 695 8 124
NON-CURRENT LIABILITIES 1 349 1 349
TOTAL LIABILITIES 10 044 9 473
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 24 707 21 354
Retained earnings 15 839 15 008
TOTAL OWNERS’ EQUITY 52 966 48 782
Non-controlling interests 1 394 1 354
TOTAL EQUITY 54 360 50 136
TOT.LIABILIT.AND OWNERS’ EQUITY 64 404 59 609
INCOME STATEMENT,  1-6/2013
Consolidated,unaudited
EUR’000
GROUP Q2 2013 Q2 2012 H1 2013 H1 2012
NET SALES 13 060 14 079 24 450 25 750
Cost of goods sold -10 716 -11 716 -20 384 -21 491
Gross profit 2 344 2 363 4 066 4 259
Marketing expenses -704 -718 -1 304 -1 355
Administrative expenses -1 045 -1 043 -1 984 -1 918
Other revenue 1 38 18 40
Other expenses -17 -10 -28 -21
Operating profit 579 630 768 1 005
Net financial incomes/expenses 940 821 1 394 994
Income from subsidiaries 608 374 683 453
Profit from normal operations 2 127 1 825 2 845 2 452
Corporate Income tax -375 -312 -375 -347
Profit after taxes, incl 1 752 1 513 2 470 2 105
Net profit for the year 1 705 1 493 2 403 2 073
Non-controlling interest 47 20 67 32
Basic earnings per share 0,10 0,09 0,14 0,12
Diluted earnings per share 0,10 0,09 0,14 0,12
Karin Padjus
FO

Interim report 1-6/2013

Resolutions of AGM

Today, on 9 May 2013 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The AGM was attended by 89 shareholders and their authorised representatives who represented the total of 12,516,831 votes accounting for 71.94 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2012;
2. Approval to profit distribution;

1. Approval to AS Harju Elekter annual report of the year 2012

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2012, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 59,609 thousand euros as of 31.12.2012, while the turnover of the financial year was 52,801 thousand euros and net profit 3,517 thousand euros.

The number of the votes given in favor of the resolution was 12,516,231 which accounted for 100.00 % of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2012 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2012 11,491 thousand euros
total net profit of the financial year  3,517 thousand euros
total retained profit on 31.12.2012 15,008 thousand euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,09 euros per share*)  1,566 thousand euros
increase of reserves     42 thousand euros
balance carried forward after profit distribution 13,400 thousand euros

The dividends will be paid to the shareholders on 28 May 2013 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 23 May 2013 at 23.59 shall be entitled to dividend.

The number of the votes given in favor of the resolution was 12,488,975 which accounted for 99.78 % of the voted participants.

Andres Allikmäe
Managing Director/CEO
Phone +372 674 7400

Financial results, 1-3/2013

Despite seasonal influences and the economic instability of the Northern European region, we managed to end the first quarter of 2013 by meeting expected results for the Harju Elekter Group.  In the accounting quarter, the Group’s consolidated revenue was 11.4 million euros, reaching practically the same level with the comparable period. In the coming quarters we are expecting positive developments on our perspective markets in Scandinavia, as well as recovery of the Finnish export industry.

January – March

Year

Change %

2013

2012

2012

Revenue (EUR’000)

-2.4

11,390

11,671

52,801

Gross profit (EUR’000)

-9.2

1,721

1,896

8,653

EBITDA (EUR’000)

-24.5

555

735

3,439

EBIT (EUR’000)

-49.8

188

375

1,970

Profit for the period (EUR’000)

21.1

717

592

3,603

incl attributed to Owners of the Company

20.3

698

580

3,517

The manufacturing segment contributed 89.1% of the consolidated sales revenues, real estate 5.7% and other, not segmented activities, 5.2%. 65.3% of the Group’s products and services were sold in foreign markets, outside Estonia (Q1 2012: 63.8%) and 91% revenues received from the Group’s companies home markets  – Estonia, Finland, Sweden, Lithuania. At the same time, the consolidated sales revenue decreased marginally during three months in Estonia (-0.27 million euros) and Finland (-0.20 million euros), increased revenues in Lithuania (0.27 million euros) and other markets, incl. Norway and Russia, (0.19 million euros). Ukraine was introduced as a new market.

Operating expenses decreased 0.7% during the period under review, inclusive cost of sales decreased 1.1% to 9.7 million euros. General administrative expenses and marketing costs increased totally by 1.7% to 1.5 million euros in the reporting quarter. The reason for the growth in general administrative expenses was the increased development costs included in these expenses.

Operating profit of Q1 2013 was 188 (Q1 2012: 375) thousand euros and EBITDA 555 (Q1 2012: 735) thousand euros. Return of sales for the accounting quarter was 1.7% (Q1 2012: 3.2%) and return of sales before depreciation 4.9% (Q1 2012: 6.3%). Decrease of operating profit was mainly due to a smaller amount of value-added products into the Finnish and Lithuanian subsidiaries’ product portfolios.

In the first quarter, also 30,000 (Q1 2012: 15,400) PKC Group Oyj shares were sold and the financial income from selling the shares was 453,000 (Q1 2012: 175,000) euros. Net financial expenses have increased by 281,000 euros to 454,000 euros. In the reporting quarter, the Group consolidated from the associated company a profit of 75,000 (Q1 2012: 79,000) euros.

Overall, the consolidated net profit of the Q1 2013 was 717,000 (Q1 2012: 592,000) euros, of which the share of the owners of the Company was 698,000 (Q1 2012: 580,000) euros. EPS in the Q1 was 0.04 (Q1 2012: 0.03) euros.

In Q1 2013, the average 462 people worked in the Group − on the average by 27 persons more than in the reference period. At the same time, the labour costs have decreased by 5.9%. Labour costs account for 24.0% of sales revenues, being by 0.9 percentage points less year-over-year (y-o-y) and 1 percentage point less compared to Q1 2011. In the first quarter, employee wages and salaries totalled 2,108 (Q1 2012: 2,280) thousand euros. The average wages per employee per month amounted 1,520 (2012 Q1: 1,746) euros.

During the 3-months period, the Group’s investments to real estate, tangible fixed assets and intangible fixed assets totalling 0.102 (Q1 2012: 0.140) million euros.

During the accounting period, cash and cash equivalents increased by 0.7 million euros to 4.0 million euros; within the comparable period, cash and cash equivalents increased by 0.4 million euros to 1.2 million euros.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

AS HARJU ELEKTER
BALANCE SHEET, 31.03.13
Consolidated, unaudited
Group
EUR’000
ASSETS 31.03.13 31.12.12
Cash and cash equivalents 4 032 3 352
Trade receivables and other receivables 7 053 6 493
Prepayments 284 232
Prepaid income tax 6 0
Inventories 6 745 6 395
TOTAL CURRENT ASSETS 18 120 16 472
Deferred income tax asset 5 5
Investments in associates 2 370 2 295
Other long-term financial investments 24 472 21 386
Investment property 10 355 10 454
Property, plant and equipment 8 387 8 546
Intangible assets 445 451
Total non-current assets 46 034 43 137
TOTAL ASSETS 64 154 59 609
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 1 103 1 075
Trade payables and other payables 6 773 5 902
Tax liabilities 883 1 049
Income tax liabilities 49 75
Short-term provision 16 23
TOTAL CURRENT LIABILITIES 8 824 8 124
NON-CURRENT LIABILITIES 1 349 1 349
TOTAL LIABILITIES 10 173 9 473
Share capital 12 180 12 180
Share premium 240 240
Restricted reserves 24 464 21 354
Retained earnings 15 724 15 008
TOTAL OWNERS’ EQUITY 52 608 48 782
Non-controlling interests 1 373 1 354
TOTAL EQUITY 53 981 50 136
TOT.LIABILIT.AND OWNERS’ EQUITY 64 154 59 609
INCOME STATEMENT,  1-3/2013
Consolidated,unaudited
EUR’000
GROUP Q1 2013 Q1 2012
NET SALES 11 390 11 671
Cost of goods sold -9 669 -9 775
Gross profit 1 721 1 896
Marketing expenses -599 -637
Administrative expenses -939 -875
Other revenue 17 2
Other expenses -12 -11
Operating profit 188 375
Net financial incomes/expenses 454 173
Income from subsidiaries 75 79
Profit from normal operations 717 627
Corporate Income tax 0 -35
Profit after taxes, incl 717 592
Net profit for the year 698 580
Non-controlling interest 19 12
Basic earnings per share 0,04 0,03
Diluted earnings per share 0,04 0,03
Karin Padjus
FO

Interim report 1-3/2013

Invitation, agenda and proposals to the AGM of shareholders

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 9 May 2013, beginning at 10:00 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2012.

To approve the annual report of AS Harju Elekter of 2012, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 59,609 thousand euros as of 31.12.2012, while the turnover of the financial year was 52,801 thousand euros and net profit 3,517 thousand euros.

2. Approval to profit distribution.

To approve the profit distribution proposal of AS Harju Elekter of 2011 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2012 11,491 thousand euros
total net profit of the financial year  3,517 thousand euros
total retained profit on 31.12.2012 15,008 thousand euros

Management board’s proposal for the distribution of profit as follows:

dividends (0,09 euros per share*)  1,566 thousand euros
increase of reserves     42 thousand euros
balance carried forward after profit distribution 13,400 thousand euros

The dividends will be paid to the shareholders on 28 May 2013 by a transfer to the bank account of the shareholder. * The shareholders registered in the shareholders’ registry on 23 May 2013 at 23.59 shall be entitled to dividend.

Information concerning the procedure for and term of exercising the rights specified in § 287 of the Commercial Code, § 293 (2), 
§ 293 (3) and § 293 (4) is available on the website of AS Harju Elekter: www.harjuelekter.ee

Since 11.4.2013 the annual report of 2012, agenda and proposals to the AGM of shareholders are available for preliminary examination in the Internet, company’s home page or in Keila, 31 Paldiski Road. Questions about agenda items can be sent to the address yldkoosolek@he.ee. Questions, answers and the positions of the meeting will be published on the website.

According to § 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting will be fixed at 23.59 on 2.05.2013. Registration of the participants starts on 9 May 2013 at 9 a.m. For the registration we ask you to take with you an identification document. A representative of shareholder is requested to take with him/her a document certifying their right of representation or a valid copy of the commercial register card.

Andres Allikmäe
Managing Director/CEO
+372 674 7400

Financial results, 1-12/2012

Key figures (EUR’000) Q4 2012 Q4 2011 2012 2011
Sales revenue 12,565 13,101 52,801 46,674
EBITDA 540 834 3,439 3,378
Operating profit 167 520 1,970 2,025
Net profit for the current period 191 624 3,603 2,948
incl. equity holders of the parent 207 571 3,517 2,773
EPS (EUR) 0.01 0.03 0.21 0.17

During the year 2012, the Group’s sales revenue increased by 13% up to 52.8 million euros. In 2012, sales volumes increased from quarter to quarter, peaking in Q3. In Q4, the Group’s consolidated revenue was 12.6 million euros, which was 0.5 million euros less compering to the referring period. 90% of the consolidated sales income originated from Production segment enterprises and the sale of electrical equipment accounted for almost 84% of the sales income. In 2012, the sale of electrical equipment grew by 6.2 million euros or 16.3% up to 44.1 million euros incl. sales in Q4, which was 10.2 million euros, being 0.5 million euros lower compering to the referring quarter. 66.4% of the Group’s products and services were sold in foreign markets, outside Estonia (2011: 61.5%). The proportion of domestic markets (Estonia, Finland, Lithuania, and Sweden) has gradually decreased, reaching 90% (94% in 2011) of the sales income. At the same time the Group has worked hard to locate new markets and clients. Exports to other European Union countries have increased two and a half times, and one and a half times outside the EU. Germany, where an active partner with a large potential has been found, is also a developing and continuously growing market for the Group. In 12 months, sales to that market increased by 1.8 million euros compared to the reference period. This year, Ukraine and Switzerland were introduced as a new market to which the Group’s products were sold in the amount of 1 million euros. Supplies to Russia and Belarus have also increased by 0.4 million euros to 0.8 million euros.

The growth in the production and selling volumes has led to an increase in the number of employees in the Group. In Q4 2012, the average 457 people worked in the Group − on the average by 21 persons more than in the reference period. During the reporting year, the average number of employees increased by 25 persons up to 452 employees. As at the balance day on 31 December, there were 478 people working in the Group, which were 21 employees more than a year before. Labour costs increased 9%, to 11.9 million euros per year; although there was still a decrease of 7.2%, to 3 million euros in Q4, mainly due to the reduction of reserves. Labour expenses made up 23.7% of the revenue in the fourth quarter (Q4 2011: 24.5%), in the 12 months period 22.5% (2011: 23.3%). In the reporting period, the salaries of employees in all of the Group’s companies were adjusted. The average wages per employee per month amounted 1,684 (2011: 1,502) euros.

Operating profit of Q4 2012 was 167 (Q4 2011:520) thousand euros and EBITDA 540 (Q4 2011: 834) thousand euros. Return of sales for the accounting quarter was 1.3% (Q4 2011: 4.0%) and return of sales before depreciation 4.3% (Q4 2011: 6.4%). During 12 months, EBITDA increased by 1.8% to 3.4 million euros and operating profit decreased by 2.7% to 2.0 million euros. Return of sales before depreciation for the 12 months 2012 was 6.5% (2011: 7.2%) and return of sales was 3.7%, decreasing 0.6 per cent point compering to the reference period.

In the reporting period the Group received dividend in the about 854 (2011: 795) thousand euros. In the first quarter, also 15,400 PKC Group Oyj shares were sold and the financial income from selling the shares was 175,000 euros. No profit was earned on other financial investments in the comparable period. Net financial expenses have increased by 254,000 euros to 1.0 million euros within 12 months. In 2012, the Group consolidated from the associated company a profit of 1.1 (2011:0.5) million euros.

Overall, the consolidated net profit of the Q4 2012 was 0.19 (Q4 2011: 0.62) million euros, of which the share of the owners of the parent company was 0.21 (Q4 2011: 0.57) million euros. EPS in the Q4 was 0.01 (Q4 2011: 0.03) euros. The consolidated net profit of the year was 3.6 (2011: 2.9) million euros. EPS was 0.21 (2011: 0.17) euros.

Q4 2012, in addition to the existing 51% holding, AS Harju Elekter has acquired from a Lithuanian shareholder a further 11.7% holding in its Lithuanian subsidiary UAB Rifas, resulting in an increase of the holding of AS Harju Elekter in the company to 62.7%. A contract was concluded on 30 November 2012, and the transaction will close on 5 December 2012.

In the accounting year, cash flow from operating activities was 4.6 (2011: 1.2) million euros and outflow from investing activities was 57,000 (2011: 2.2 million) euros. The Group received 0.66 million euros from the bonus issue and paid dividends in the amount of 1.2 (2011: 1.1) million euros. All in all, cash outflow from financing activity was 2.0 (2011: 0.6) million euros. During the year, cash and cash equivalents increased by 2.5 million euros to 3.4 million euros; within the comparable period cash and cash equivalents decreased by 1.6 million euros to 0.8 million euros.

Andres Allikmäe
Managing director/ CEO
Tel +372 674 7400

For more information: Internal report 1-12/2012

AS HARJU ELEKTER
BALANCE SHEET, 31.12.2012
Consolidated, unaudited
Group
EUR’000
ASSETS 31.12.12 31.12.11
Cash and cash equivalents 3 352 815
Trade receivables and other receivables 6 493 7 848
Prepayments 232 104
Prepaid income tax 0 20
Inventories 6 395 6 658
TOTAL CURRENT ASSETS 16 472 15 445
Deferred income tax asset 5 35
Investments in associates 2 295 1 177
Other long-term financial investments 21 386 16 023
Investment property 10 454 10 833
Property, plant and equipment 8 546 8 985
Intangible assets 606 422
Total non-current assets 43 292 37 475
TOTAL ASSETS 59 764 52 920
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 1 075 2 245
Trade payables and other payables 5 902 6 268
Tax liabilities 1 049 758
Income tax liabilities 75 29
Short-term provision 23 17
TOTAL CURRENT LIABILITIES 8 124 9 317
NON-CURRENT LIABILITIES 1 517 1 569
TOTAL LIABILITIES 9 641 10 886
Share capital 12 180 11 760
Paid-in capital over/under par 240 0
Restricted reserves 21 354 15 881
Retained earnings 14 995 12 672
TOTAL OWNERS’ EQUITY 48 769 40 313
Non-controlling 1 354 1 721
TOTAL EQUITY 50 123 42 034
TOT.LIABILIT.AND OWNERS’ EQUITY 59 764 52 920
INCOME STATEMENT, 1-12/2012
Consolidated,unaudited
EUR’000
GROUP Q4 2012 Q4 2011 1-12/2012 1-12/2011
NET SALES 12 565 13 101 52 801 46 674
Cost of goods sold -10 632 -10 956 -44 175 -38 863
Gross profit 1 933 2 145 8 626 7 811
Marketing expenses -658 -604 -2 774 -2 270
Administrative expenses -1 088 -995 -3 876 -3 455
Other revenue 1 -4 49 16
Other expenses -21 -22 -55 -77
Operating profit 167 520 1 970 2 025
Net financial incomes/expenses -6 -16 997 744
Income from subsidiaries 104 97 1 118 497
Profit from normal operations 265 601 4 085 3 266
Corporate Income tax -74 23 -482 -318
Profit after taxes, incl 191 624 3 603 2 948
Net profit for the period 207 571 3 517 2 773
Non-controlling interest -16 53 86 175
Basic earnings per share (EUR) 0,01 0,03 0,21 0,17
Diluted earnings per share (EUR) 0,01 0,03 0,21 0,16

Interim report 1-12/2012

Karin Padjus
FO

Publication of financial reports in 2013

AS Harju Elekter wishes to the shareholders a Happy New Year and informs you that in the year 2013, the consolidated financial results of AS Harju Elekter will be published as fallowing:

2012 4Q results 27.02.2013
2013 1Q results 07.05.2013
AGM 09.05.2013
2013 2Q results 07.08.2013
2013 3Q results 06.11.2013

After their release through the stock exchange information system all Harju Elekter’s announcements are also available on company’s internet homepage at http://www.harjuelekter.ee

Andres Allikmäe
Managing Director
+372 674 7400