Harju Elekter was one of a few dozen Estonian companies 25 years ago that went to the Tallinn Stock Exchange to support the growth of the company. Today, only six of the companies that began trading in the 1990s are still operating.
In 1997, AS Harju Elekter was one of the first Estonian companies to be listed on the stock exchange.
Kaarel Ots, CEO of Nasdaq Tallinn Stock Exchange, noted that only six of the ten companies listed in the early years of the Tallinn Stock Exchange are still trading on the stock exchange: Tallinna Kaubamaja Grupp (September 1996), Silvano Fashion Group (formerly named Klementi, May 1997), Nordic Fibreboard (former names Viisnurk and Skano Group, June 1997), Baltika Group (June 1997), Merko Ehitus (July 1997), and Harju Elekter (September 1997).
According to Tiit Atso, the current Chairman of the Management Board of AS Harju Elekter, the listing of the company’s shares on the stock exchange made it possible to raise additional capital and increased the company’s credibility on the internal and external markets. “At the time, being listed on the stock exchange carried some serious weight, and still does in foreign countries and in foreign relations,” admitted Atso, adding that: ‘Being listed on the stock exchange obliges the company to be transparent in all its activities and it has a good effect in the view of clients, partners, and employees.’
Main driver of other companies in the field
Janek Lehtmets, the CEO of Harju KEK AS, which owns more than 30% of Harju Elekter’s shares, said that Harju Elekter is bigger as an organisation and in terms of influence than it appears. “The company has inestimable value and significance on the business environment. It is the flagship of Estonian industrial enterprises – a company whose business decisions in the 1990s still influence the Estonian business environment and the development of the region,” Lehtmets said.
He is convinced that Harju Elekter has been a good breeding ground – a place where great ideas get started and are passed on to many other companies as ideas or subcontracting. “Harju Elekter has been or is a shareholder or a strategic partner of many companies that are today top performers in their field, such as PKC, Glamox, Prysmian, ABB, Skeleton, and several other successful companies,” Lehtmets pointed out. He stressed that it is rare that a single company has been a driving force for so many other companies over the decades, creating synergies and cooperation between tens, hundreds, and even thousands of people.
Consistency is the foundation of success
Tiit Atso pointed out that, in light of the ever-changing economic environment of the stock exchange, the fact that Harju Elekter’s shares have been dividend-bearing in all the years in which it has been listed has become more important than the share price movements. “It is worth noting that Harju Elekter is the most stable dividend payer on the Tallinn Stock Exchange. They have paid dividends every year since going public, for a total of 25 years without missing a single year,” the Head of the Tallinn Stock Exchange confirmed Atso’s story. “Harju Elekter is without a doubt the iron asset of the Tallinn Stock Exchange,” Kaarel Ots, the Head of Nasdaq Tallinn Stock Exchange, praised.
Ots added that, of course, investors are also interested in the company’s share yield. “If an investor bought Harju Elekter’s shares on the first day of trading in the amount of EUR 1,000 and held the investment until today, including reinvesting all dividends received, the value of the investment today would be around EUR 12,500,” Ots said, adding that the current peak in the value of the investment would have been around EUR 22,000.
What will the next quarter century bring
“Estonia’s investor community and investment culture has only been evolving for a little over 25 years, but the development has been remarkable. A major contribution has been made by all those companies that have gone public,” Kaarel Ots said. According to him, the next 25 years are also promising for the Tallinn Stock Exchange: “The Tallinn Stock Exchange is currently in its best shape. There are more companies on the stock exchange than ever before, they are more international in nature, and possess high quality management. Over the years, the level of investor relations has made great progress, transaction fees are lower, and the investor culture is broader, more informed and professional.”
Janek Lehtmets, the CEO of Harju KEK AS, believes that for Harju Elekter, the future years will be successful on the stock exchange: “On a daily basis, we see the efforts of the Harju Elekter team in operating within a changing economic and production environment, and we believe in the ability of the company and its management to adapt to change and cope with various challenges. In recent years, electricity has received a lot of attention all over the world, which confirms the importance of the direction chosen 25 years ago and also gives Harju Elekter the opportunity to set new business horizons.”