Dividend payment ex-date of AS Harju Elekter Group

AS Harju Elekter Group (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 21 May 2024 at the end of the working day of the Nasdaq CSD Estonian settlement system.

Proceeding from the above, the day of change of the rights related to the shares (the ex-date) is 20 May 2024. From that date the new owner of the shares is not entitled to dividends for the year 2023.

AS Harju Elekter Group will pay dividend 0.13 euros per share on 28 May 2024.

 

Priit Treial
CFO and Member of the Management Board
+372 674 7400

Decisions of Annual General Meeting of AS Harju Elekter Group

The Annual General Meeting of Shareholders of AS Harju Elekter Group was held on 26 April 2024 starting at 14 p.m., at the Swissotel Tallinn, Tornimäe 3. The AGM was attended by 60 shareholders and their authorised representatives who represented a total of 11,324,722 votes accounting for 61.22% of the total votes.

The decisions of the General Meeting were as follows:

  1. 1. Approval to AS Harju Elekter Group annual report of 2023

Approve the 2023 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as of 31 December 2023 is 178,4 million euros, revenue is 209,0 million euros, operating profit is 8,1 million euros and net profit is 5,2 million euros.

The number of votes given in favor of the resolution was 11,298,566 which accounted for 99.77% of the voted participants.

  1. 2. Approval to profit distribution

To approve the profit distribution proposal of AS Harju Elekter Group of 2023 as presented by the management board and as approved by the supervisory board as follows:

retained earnings 46,822,252 euros
profit for 2023 5,159,811 euros
total distributable profit as of 31.12.2023 51,982,062 euros

 

dividends (0,13 euros per share*) 2,404,840 euros
Retained earnings after profit distribution 49,577,223 euros

 

*Dividends will be paid to shareholders on 28 May 2024, by transfer to the shareholder’s bank account. The list of shareholders for the payment of dividends is established on 21 May 2024 as at the end of the business day in the accounting system. The date of the change in the rights related to the securities (ex-date) is 20 May 2024. From this date, the person who acquired the shares is not entitled to receive dividends for the financial year 2023.

The number of votes given in favor of the resolution was 11,298,566 which accounted for 99.77% of the voted participants.

  1. 3. Appointment of auditor
    To appoint AS PricewaterhouseCoopers, register code 10142876 to perform the audit of AS Harju Elekter Group on the years 2024-2025. The auditor will be remunerated according to the agreement.

The number of votes given in favor of the resolution was 11,319,850 which accounted for 99.96% of the voted participants.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Harju Elekter Group financial results, 1-3/2024

Commentary from the management

Harju Elekter’s 2024 began with more modest results than in the year before. In the longer term, however, it was still a strong first quarter. Despite our efforts to minimise seasonality, the Q1 and Q4 results tend to be weaker than the Q2 and Q3 results. In this year as well, the significant increase in production volumes started in March, and based on orders is expected to continue until the end of autumn.

The biggest contribution to the financial results originated from production in Lithuania, and from production in Estonia to some extent. The Finnish production unit has a number of activities ahead to restore its profitability, and we can be increasingly optimistic about the Swedish unit’s return to profitability, which has taken longer time than anticipated. Amendments to the Finnish national energy network regulations that govern distribution networks had a significant economic impact on sales results in Estonia and Finland, resulting in reduced investments for the current and coming years.

On 11 March this year, the Regulation of the European Parliament and of the Council banning the use of fluorinated greenhouse gases (SF6) in electrical equipment from 2026 entered into force. For Harju Elekter, this will very likely mean that a number of electricity grid contracts will be amended or cancelled in 2025. As equipment manufacturers are only starting up their production of SF6-free equipment, a shortage situation could emerge in the market, affecting both the availability of equipment and leading to a sharp increase in prices. This, in turn, will lead to significant fluctuations in the volume of orders for complex substations before and after the commissioning date of said equipment.

By today, we have completed the restructuring commenced in the second half of 2022, which transformed the management of the Group and its subsidiaries, sharpened the focus on core activities, and provided for other important steps to be ready for the implementation of the new strategic development plan. There is no development without growth, which is why we will keep looking for opportunities to continue profitable growth in both existing and new locations.

Revenue and financial results

The Group’s revenue in the first quarter was 46.8 million euros, representing a 3.3% growth compared to the same period last year. Sales of electrical equipment showed stable growth and made a significant contribution to the company’s revenue, amounting to 42.2 million euros and accounting for 90.3% of total quarterly revenue. The majority of electrical equipment sales consisted of substations, low-voltage distribution equipment, technical buildings, and subcontracting services.

EUR ’000   3M 3M +/-
    2024 2023  
Revenue 46,775 45,269 3.3%
Gross profit 4,836 5,386 -10.2%
EBITDA 1,941 2,382 -18.5%
Operating profit (EBIT) 976 1,309 -25.4%
Profit for the period 361 749 -51.8%
Earnings per share (EPS) (euros) 0.02 0.04 -50.0%

While revenue increased, profitability declined compared to the previous year. The three-month gross profit was 4.8 (2023 Q1: 5.4) million euros, resulting in a gross profit margin of 10.3% (2023 Q1: 11.9%). Operating profit (EBIT) amounted to 1.0 (2023 Q1: 1.3) million euros, with an operating margin of 2.1% (2023 Q1: 2.9%). Net profit for the first quarter was 0.4 (2023 Q1: 0.7) million euros. Earnings per share for the first quarter were 0.02 (2023 Q1: 0.04) euros.

Core business and markets

The Group’s core business, Production, accounted for 94.9% of the revenue of the quarter. The production segment’s revenue increased by 4.2%, amounting to 44.4 million euros.

The Group’s largest target markets, Estonia, Finland, Sweden, and Norway, together accounted for 80.6% of total revenue in the first quarter, representing a significant increase compared to the previous year (2023 Q1: 75.3%).

Estonia and Finland markets were more modest compared to the previous year. In the reporting quarter, revenue from Estonia amounted to 4.5 (2023 Q1: 5.0) million euros, comprising 9.6% (2023 Q1: 10.9%) of consolidated revenue. Sales of substations and cable distribution cabinets to electricity distribution sector clients decreased, while rental income from real estate properties increased. From the Finnish market, revenue amounted to 17.0 million euros, which is 8.9% less than the previous year. The majority portion of the revenue decline was due to reduced sales of electrical equipment and electrical works. Sales of substations to electricity distribution sector customers and electric vehicle chargers remained modest.

There was a significant growth in the Norwegian market, where revenue doubled to 9.3 million euros, primarily from the sale of low-voltage equipment to maritime sector customers. The Norwegian market accounted for 19.9% of consolidated revenue in the reporting quarter. Revenue from the Swedish market also slightly increased, reaching 6.9 (2023 Q1: 6.5) million euros, indicating stable development in this market segment.

Investments

During the reporting period, Harju Elekter invested a total of 0.7 (Q1 2023: 0.6) million euros in non-current assets, including 0.4 (2023 Q1: 0.3) million euros in investment properties, 0.1 (2023 Q1: 0.3) million euros in property, plant, and equipment and 0.2 (2023 Q1: 0.1) million euros in intangible assets. The investments primarily focused on extensive renovation and reconstruction works in the Keila Industrial Park, aimed at meeting the long-term needs of a tenant, Prysmian Group Baltics. Additionally, investments were made in production technology equipment and production and process management systems.

The total value of the Group’s long-term financial investments as of the reporting date was 29.3 (31.12.23: 29.2) million euros.

Shares

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.79 euros. As of 31 March 2024, AS Harju Elekter Group had 11,103 shareholders.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited
EUR ‘000 31.03.2024 31.12.2023 31.03.2023
ASSETS
Current assets
Cash and cash equivalents 1,444 1,381 1,028
Trade and other receivables 49,050 38,837 37,627
Prepayments 1,400 1,071 1,945
Inventories 35,900 36,834 44,704
Total current assets 87,794 78,123 85,304
Non-current assets
Deferred income tax assets 868 731 1,002
Non-current financial investments 29,313 29,244 23,767
Investment properties 28,922 28,856 24,766
Property, plant, and equipment 33,549 34,067 35,042
Intangible assets 7,440 7,354 7,284
Total non-current assets 100,092 100,252 91,861
TOTAL ASSETS 187,886 178,375 177,165
LIABILITIES AND EQUITY
Liabilities
Borrowings 22,576 19,387 18,366
Prepayments from customers 20,946 18,870 21,310
Trade and other payables 27,432 23,159 31,888
Tax liabilities 2,978 3,308 3,033
Current provisions 150 140 1,950
Total current liabilities 74,082 64,864 76,547
Borrowings 23,207 23,481 20,412
Other non-current liabilities 32 32 0
Total non-current liabilities 23,239 23,513 20,412
TOTAL LIABILITIES 97,321 88,377 96,959
Equity
Share capital 11,655 11,655 11,523
Share premium 3,306 3,306 2,509
Reserves 23,261 23,055 17,815
Retained earnings 52,343 51,982 48,552
Total equity attributable to the owners of the parent company 90,565 89,998 80,399
Non-controlling interests 0 0 -193
Total equity 90,565 89,998 80,206
TOTAL LIABILITIES AND EQUITY 187,886 178,375 177,165

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS    
Unaudited
EUR ‘000 3M 3M
2024 2023
Revenue 46,775 45,269
Cost of sales -41,939 -39,883
Gross profit 4,836 5,386
Distribution costs -1,195 -1,356
Administrative expenses -2,517 -2,580
Other income 19 18
Other expenses -167 -159
Operating profit 976 1,309
Finance income 92 75
Finance costs -590 -549
Profit before tax 478 835
Income tax -117 -86
Profit for the period 361 749
Profit attributable to:
    Owners of the parent company 361 781
    Non-controlling interests 0 -32
Earnings per share    
   Basic earnings per share (euros) 0.02 0.04
   Diluted earnings per share (euros) 0.02 0.04

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR ‘000 3M 3M
2024 2023
Profit for the period 361 749
Other comprehensive income
Items that may be reclassified to profit
   Impact of exchange rate changes of a foreign subsidiaries 106 -41
Items that will not be reclassified to profit
   Gain on sales of financial assets 0 0
   Net gain on revaluation of financial assets 70 36
Total comprehensive income for the period 176 -5
Other comprehensive income 537 744
Total comprehensive income attributable to:
    Owners of the Company 537 776
    Non-controlling interests 0 -32

Interim Report 2024 Q1

Priit Treial
CFO and Member of the Management Board
+372 674 7400

Invitation to the Annual General Meeting of shareholders of AS Harju Elekter Group, its agenda, and proposals

The Management Board of AS Harju Elekter Group (registry code 10029524, address Paldiski mnt 31/2, Keila) convenes the Annual General Meeting of shareholders. The General Meeting will take place on 26 April 2024 at 14:00 p.m. at venue of Swissôtel Tallinn (address: Tornimäe 3, Tallinn).

Registration of meeting participants will start on 26 April 2024 at 13:00. The list of shareholders entitled to vote at the meeting is fixed seven days before the General Meeting, i.e. as of the end of the business day of the Nasdaq CSD Estonian settlement system on 19 April 2024.

Shareholders can vote on the items on the agenda before the General Meeting by e-mail or post. A more detailed overview of how it is possible to vote before the General Meeting, is provided in the section “Organisational issues” of this notice and on the website of AS Harju Elekter Group at www.harjuelekter.com.

The Supervisory Board of Aktsiaselts Harju Elekter Group set the agenda of the following General Meeting and approved the following proposals:

  1. Approval of the 2023 Annual Report of AS Harju Elekter Group

Approve the 2023 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as of 31 December 2023 is 178,4 million euros, revenue is 209,0 million euros, operating profit is 8,1 million euros and net profit is 5,2 million euros.

  1. Approval of profit distribution

Approve the 2023 profit distribution proposal of AS Harju Elekter Group submitted by the Management Board and approved by the Supervisory Board as follows:

Retained earnings  EUR 46,822,252
Net profit for 2023  EUR   5,159,811
Total distributable profit as of 31.12.2023  EUR 51,982,063

The Management Board proposes the distribution of profits as follows:

Dividends (EUR 0.13 per share*)    EUR   2 404,840
Retained earnings after distribution of profit    EUR 49,577,223

 

*Dividends will be paid to shareholders on 28 May 2024, by transfer to the shareholder’s bank account. The list of shareholders for the payment of dividends is established on 21 May 2024 as at the end of the business day in the accounting system. The date of the change in the rights related to the securities (ex-date) is 20 May 2024, from this date, the person who acquired the shares is not entitled to receive dividends for the financial year 2023.

  1. Appointment of auditor

To appoint AS PricewaterhouseCoopers, register code 10142876 to perform the audit of AS Harju Elekter Group on the years 2024-2025. The auditor will be remunerated according to the agreement.

ORGNISATIONAL ISSUES

Shareholders whose shares represent at least 1/20 of the share capital may request that additional items be included in the agenda of the General Meeting if the respective request is submitted in writing 15 days before the General Meeting, no later than on 11 April 2024.

Shareholders whose shares represent at least 1/20 of the share capital may submit a draft resolution on each item on the agenda no later than 3 days before the General Meeting, no later than on 23 April 2024. Further information on the procedure and terms for exercising the rights provided pursuant to section § 287 (right of shareholder to information), subsection 293 (2) (right to request inclusion of additional items on the agenda and subsection 2931 (3) (obligation to submit a draft resolution or a substantiation simultaneously with the demand on the modification of the agenda) and subsection 2931 (4) (right to submit a draft resolution in respect to each item on the agenda) has been disclosed on the website of AS Harju Elekter Group at www.harjuelekter.com. This is also where draft resolutions submitted by shareholders and the substantiations of the resolutions, if any, are also disclosed.

The documents of the annual general meeting of AS Harju Elekter Group, including the annual report, the sworn auditor’s report, the profit distribution proposal, the report of the Supervisory Board, and the draft resolutions of the items on the agenda are available on the company’s website at www.harjuelekter.com or in Keila, at Paldiski mnt 31/2. Questions regarding the items on the agenda can be submitted to the e-mail address yldkoosolek@harjuelekter.com. Questions, answers, and positions of the meeting are published on the company’s Internet website.

Appointment of a representative. Prior to the General Meeting, a shareholder may announce the appointment of a representative and the revocation of the power of attorney granted to the representative by sending an e-mail to yldkoosolek@harjuelekter.com or by handing over the said document(s) on working days from 10:00 to 16:00 but no later than on 23 April 2024 at the AS Harju Elekter Group office at Paldiski mnt 31/2 (3rd floor) in Keila. A shareholder may use power of attorney forms to authorize a representative available on the website of AS Harju Elekter Group www.harjuelekter.com.

If voting prior to the General Meeting, shareholders are requested to fill in the ballot papers available on the website of AS Harju Elekter Group at www.harjuelekter.com and attached to the stock exchange announcement convening the General Meeting. When voting by e-mail, the completed ballot papers must be digitally signed and sent by e-mail to yldkoosolek@harjuelekter.com no later than by 25 April 2024 at 11:00.

When voting by mail, the completed ballot papers must be signed by hand and sent with a copy of the personal data of the signatory’s identity document by mail no later than by 25 April 2024 at 11:00 to the address of AS Harju Elekter Group, Paldiski mnt 31/2, Keila 76606.

Ballot papers received after the above deadline shall not be considered. If a shareholder submits several completed ballot papers, the ballot paper with the latest digital signature time stamp or time of mailing shall be deemed valid. All previously submitted ballot papers shall be deemed invalid.

If the shareholder who submitted a ballot paper before the General Meeting also physically participates in the General Meeting, all ballot papers sent by the shareholder before the General Meeting shall be deemed invalid. The exact procedure for voting prior to the General Meeting is provided in the shareholder information document available on the website of AS Harju Elekter Group at www.harjuelekter.com and in the stock exchange announcement convening the General Meeting.

To register participants physically attending the General Meeting the following is required: shareholder who is a natural person – identity document; representative of a shareholder who is a natural person – identity document and a power of attorney in written form; legal representative of a shareholder who is a legal person – an extract from the relevant (commercial) register where the legal person is registered and an identity document of the representative; contractual representative of a shareholder who is a legal person shall submit a power of attorney in written form in addition to the documents specified above. Please legalise or apostille the documents of a legal person registered abroad in advance, unless otherwise provided by an international agreement. AS Harju Elekter Group may register a shareholder who is a foreign legal person as a participant in a General Meeting even if all the required information about the legal person or its representative is contained in a notarised power of attorney issued to the representative abroad and that power of attorney is acceptable in Estonia. Please present a passport or ID Card as an identity document.

Questions regarding the general meeting, also about voting, can be submitted to the e-mail address yldkoosolek@harjuelekter.com.

Information to the voting prior to the Annual General Meeting 26 April 2024

Ballot Paper

Power of Attorney template

Withdrawal of the authorization

Supervisory Board Report 2023

Annual Report 2023

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Harju Elekter Group’s audited Annual Report 2023

AS Harju Elekter Group presents its consolidated audited Annual Report for 2023 prepared by the Management Board and approved by the Supervisory Board. Compared to the unaudited interim report published on 21 February 2024, there are no differences in the audited financial results.

The consolidated audited revenue for the year 2023 was 209.0 million euros, the operating profit was 8.1 million euros and net profit 5.2 million euros.

The original audited Annual Report 2023 document is submitted in machine-readable .xhtml format to the Nasdaq Tallinn Stock Exchange and digitally signed (Link: https://nasdaqbaltic.com/statistics/en/instrument/EE3100004250/reports).

Tiit Atso
Chairman of the Management Board
+372 674 7400

Annual Report of Harju Elekter 2023 (original)

Annual Report of Harju Elekter 2023 (pdf)

AS Harju Elekter was awarded the title of Factory of the Year 2024

On March 14th, the laureates of the ‘Smart Industry 2024’ industrial sector event were announced during the gala. In the category of large enterprises, AS Harju Elekter was awarded the title of Factory of the Year. The goal of the Factory of the Year competition is to recognize and showcase factories that have successfully implemented innovative solutions in their production processes, thereby inspiring others.

Upon receiving the award, Managing Director Alvar Sass stated that a lot of work has been done, and it’s thanks to the entire company team. “This award should be accepted by all of our more than 340 employees,“ said Sass.

According to the competition jury, Harju Elekter stood out as an excellent implementer of Lean methodologies, measuring the benefits derived from them. Additionally, over the past two years, the company has successfully merged and updated its two Keila factories, actively involving factory workers in development work, emphasizing clear goals and digitalization, and paying attention to workplace safety.

The Factory of the Year competition, which took place for the third time, awarded titles in three categories: 1) large enterprise; 2) small and medium-sized enterprise; and 3) a special award for the responsible factory of the year.

To participate, companies had to complete a special questionnaire, which was evaluated by the competition jury, including Lean Digital partner Aleksandr Miina, German Automation Director Ats Alupere, Tallinn University of Technology’s Institute of Mechanics and Industrial Engineering Professor Tauno Otto, and Leanest CEO Marko Saviauk.

The End of SF6: Navigating the Shift to Eco-Friendly Insulation

The European Union’s F-gas regulation is being implemented, impacting electrical distribution equipment that utilizes SF6 insulation gas. SF6 gas has been favored historically for its suitability in electrical applications, particularly due to its cost-effectiveness and compactness. However, its environmental impact—should the gas leak following an accident with the electrical equipment—poses a significant downside. While such incidents are infrequent, the potential for leakage has led to a progressive reduction in the use of SF6 over time. The current objective is to phase out its usage entirely.

The EU regulation establishes various deadlines for phasing out the use of SF6 gas in electrical equipment. Initially, from January 1, 2026, connecting new SF6-insulated devices with an insulation voltage of up to 24 kV to the network will be prohibited. By 2030, this prohibition will expand to include all devices with an insulation voltage of up to 52 kV. We contend that the allotted transition period is insufficient and advocate for its extension.

What are the alternatives?

Currently, SF6-free devices are available but in limited quantities. Manufacturers are progressively transitioning to SF6-free technology and are introducing new devices and combinations to the market.

The preferred alternative involves mixtures of different gases, primarily nitrogen and oxygen, commonly known as clean or dry air. Manufacturers often assign proprietary names to these mixtures.

The trend in the development of medium-voltage equipment is to retain the dimensions of existing devices. However, these newer models are generally more material-intensive, heavier, and incorporate more complex materials and technologies, making them significantly more expensive than current solutions.

Harju Elekter’s transition year activities

According to Indrek Ulmas, Harju Elekter’s Product Manager for Medium-Voltage Equipment, we are diligently monitoring the readiness of various manufacturers and are planning to commence trial installations shortly.

Although the ban on SF6 equipment will not take effect until January 1, 2026, the supply chain is already experiencing challenges. A gradual reduction in the production of SF6 equipment is anticipated, alongside an increase in the adoption of new technologies.

Indrek Ulmas further states, “In the upcoming transition years, our focus will be on collaborating closely with both customers and manufacturers to navigate the impending changes successfully.”

Harju Elekter Group financial results, 1-12/2023

Commentary from the management

2023 will remain in Harju Elekter’s history as a year of transformation. We managed to turn the deep loss of the previous year into a strong profit, while achieving the largest operating profit in the Group’s history and a satisfactory net profit despite increased interest rates.

The fourth quarter results were weaker than usual due to the seasonality of the business, but compared to the same period last year, the results have continued to improve. In particular, we can be content with the change in operating profit (EBIT), which remained at a satisfactory level even after the year-end revaluation of the profitability of the projects and assets. Instead of losses in 2022, the Group earned both operating and net profit in 2023.

The year was marked by a number of fundamental decisions and pivotal changes to be proud of. The merger of the Estonian subsidiaries was more successful than expected, as demonstrated by the strong financial results. We can also be proud of the Lithuanian manufacturing company, which by today has grown to become the largest unit in the Group, and which we can commend for the strongest financial performance among all companies of the Group. In Finland, which continues to be our principal market, we exited from lower-volume business lines last year and focused on core activities and the strengthening thereof. Although the anticipated forecasts of turning the Swedish unit profitable did not materialise in the reporting year, we will continue our determined work towards making the company profitable in 2024.

As a whole, the structural reforms launched at the end of 2022 and introduced last year, as well as the implementation of the Strategic Action Plan, have been successful. In the spring, we will start setting the strategic targets for the Group’s next growth period, driven by the need to increase the Group’s EBIT margin and, in line with the expectations of shareholders, by the continued desire to increase the dividend. The Group’s central strategic objective in the coming years will be profitable growth.

Revenue and financial results

The Group’s revenue in the fourth quarter was 50.7 million euros, similar to the previous year’s revenue result of 50.0 million euros. However, in a full year comparison, we achieved faster increase in revenue at 19.2% per year. This was underpinned by strong framework agreements and increased demand for the Group’s services. In total, the Group’s revenue for 2023 was 209.0 (2022: 175.3) million euros.

EUR ’000   Q4 Q4 +/- 12M 12M +/-
    2023 2022   2023 2022  
Revenue   50,737 49,978 1.5% 209,014 175,293 19.2%
Gross profit   4,218 2,517 67.6% 23,588 12,269 92.3%
EBITDA   1,920 -943 303.6% 12,444 217 5634.6%
Operating profit/loss (-) (EBIT)   758 -2,063 136.7% 8,078 -4,546 277.7%
Profit/loss (-) for the period   135 -2,482 105.4% 5,160 -5,567 192.7%
Earnings per share (EPS) (euros)   0.01 -0.14 105.3% 0.28 -0.31 191.7%

The gross profit for the year was 23,588 (2022: 12,269) thousand euros and the gross margin was 11.3% (2022: 7.0%). During the year, operating profit (EBIT) of 8,078 (2022: operating loss -4,546) and net profit of 5,160 (2022: net loss -5,544) thousand euros were earned. Net profit per share was 0.28 (2022: net loss per share -0.31) euros.

Core business and markets

The Group’s core business, Production, accounted for 94.0% (Q4 2022: 92.5%) of the revenue of the quarter. The production segment’s revenue increased by 3.2% quarterly and by 25.6% annually, amounting to 47.7 and 197.9 million euros respectively.

The Group’s largest target markets are Estonia, Finland, Sweden, and Norway, where a total of 78.4% (Q4 2022: 89.7%) of the Group’s products and services were sold in the quarter.

In the fourth quarter, 5.2 (Q4 2022: 7.6) million euros were earned from Estonia, which was 2.4 million euros less than a year earlier. Compared to year before, the revenue decreased by 9.4 million to 20.9 million euros. The decrease in revenue in both periods is mostly related to the termination of the retail and project-based sale of electrical products in Estonia but sales of electrical equipment to contract customers also decreased. The increased volume in the previous year originated mainly from the contract for hermetic distribution transformers and distribution cabinets. The Estonian market accounted for 10.3% (Q4 2022: 15.2%) of the revenue of the quarter.

Compared to the quarters, revenue in Finland decreased by 7.7% to 19.6 (Q4 2022: 21.3) million euros. Revenue growth was hindered by a decline in investment in electricity networks due to regulatory changes in network charges. During the year, a total of 83.3 (2022: 81.8) million euros were earned from Finland, mainly from the supply of package substations and low-voltage distribution equipment. The Group’s largest market sold 38.7% (Q4 2022: 42.5%) of Harju Elekter products and services in the reporting quarter.

The revenue of the Swedish market increased due to the rise in the sale of substations and the growth of project business, being 9.2 (Q4 2022: 7.1) in the quarter and 32.5 (2022: 22.8) million euros in the summary of the year. Sweden accounted for 18.1% (Q4 2022: 14.2%) of the revenue of the reporting quarter.

Revenue from the Norwegian market was 5.7 (Q4 2022: 8.9) in the quarter, and 33.8 (2022: 21.8) million euros during the year. Revenue was mainly generated from the production of frequency converter systems and electrical and automation panels for the maritime and shipping sector. The Norwegian market accounted for 11.3% (Q4 2022: 17.8%) of the revenue of the reporting quarter.

Revenue from other markets increased by 5.8 to 11.0 million euros year-on-year. Revenue increased mainly from the Germany and Netherlands markets. In annual comparison, revenue from other markets increased by 20.0 million euros to 38.5 million euros. Most of the growth came from sales to the USA, where frequency converter equipment and MCC systems were shipped to the United States Steel Corporation’s Big River Steel plant. Other markets accounted for 21.6% (Q4 2022: 10.3%) of the revenue of the reporting quarter.

Investments

During the reporting period, the Group invested a total of 6.9 (2022: 15.2) million euros in non-current assets, incl 5.2 (2022: 1.8) in investment properties, 1.4 (2022: 12.9) in property, plant, and equipment and 0.4 (2022: 0.5) million euros in intangible assets. Most of the investments during the reporting period were made in the construction of the production building to be rented out to Reimax Electronics OÜ in the Allika Industrial Park, which was completed at the end of the year. In addition, investments were made in other real estate objects, production technology equipment, and production and process management systems.

The value of the Group’s non-current financial investments totalled 29.2 (31.12.22: 23.7) million euros as of the reporting date. The main part of the revaluation of financial assets in 2023 came from the estimated fair value change of OÜ Skeleton Technologies Group’s investment, which increased by 5.4 million euros to 27.2 million euros. The fair value of listed securities increased by 0.1 million euros during the year, compared to a decrease by 0.7 million euros a year earlier. There were no acquisitions or sales of listed securities during the year.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.97 euros. As of 31 December 2023, AS Harju Elekter Group had 11,164 shareholders. During the quarter, the number of shareholders decreased by 105 and increased by 580 during the entire year.

Dividend Proposal

In coordination with the Supervisory Board, the Group’s Management Board will propose to pay dividends to the shareholders 0.13 euros per share, totalling 2.4 million euros and representing 47% of consolidated net profit in 2023.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited
EUR ‘000 31.12.2023 31.12.2022
ASSETS
Current assets
Cash and cash equivalents 1,381 9,152
Trade and other receivables 38,837 31,612
Prepayments 1,071 1,126
Inventories 36,834 37,068
Total current assets 78,123 78,958
Non-current assets
Deferred income tax assets 731 1,008
Non-current financial investments 29,244 23,731
Investment properties 28,856 24,756
Property, plant, and equipment 34,067 35,740
Intangible assets 7,354 7,244
Total non-current assets 100,252 92,479
TOTAL ASSETS 178,375 171,437
LIABILITIES AND EQUITY
Liabilities
Borrowings 19,387 24,385
Prepayments from customers 18,870 16,827
Trade and other payables 23,159 24,502
Tax liabilities 3,308 3,478
Current provisions 140 2,103
Total current liabilities 64,864 71,295
Borrowings 23,481 20,732
Other non-current liabilities 32 0
Total non-current liabilities 23,513 20,732
TOTAL LIABILITIES 88 377 92 027
Equity
Share capital 11,655 11,523
Share premium 3,306 2,509
Reserves 23,055 17,768
Retained earnings 51,982 47,771
Total equity attributable to the owners of the parent company 89,998 79,571
Non-controlling interests 0 -161
Total equity 89,998 79,410
TOTAL LIABILITIES AND EQUITY 178,375 171,437

 

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS        
Unaudited
EUR ‘000 Q4 Q4 12M 12M
2023 2022 2023 2022
Revenue 50,737 49,978 209,014 175,293
Cost of sales -46,519 -47,461 -185,426 -163,024
Gross profit 4,218 2,517 23,588 12,269
Distribution costs -1,260 -1,449 -5,320 -5,578
Administrative expenses -2,657 -3,037 -10,112 -11,194
Other income 495 2 314 308
Other expenses -38 -96 -392 -351
Operating profit/loss (-) 758 -2,063 8,078 -4,546
Finance income 456 5 97 78
Finance costs -624 -433 -2,103 -809
Profit/loss (-) before tax 590 -2,491 6,072 -5,277
Income tax -455 9 -912 -290
Profit/loss (-) for the period 135 -2,482 5,160 -5,567
Profit /loss (-) attributable to:
    Owners of the parent company 135 -2,520 5,160 -5,544
    Non-controlling interests 0 38 0 -23
Earnings per share      
   Basic earnings per share (euros) 0.01 -0.14 0.28 -0.31
   Diluted earnings per share (euros) 0.01 -0.14 0.28 -0.30

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME        
Unaudited
EUR ‘000 Q4 Q4 12M 12M
2023 2022 2023 2022
Profit/loss (-) for the period 135 -2,482 5,160 -5,567
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidiaries -212 -47 -139 -208
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 0 320
   Net gain/loss (-) on revaluation of financial assets -3,266 20 5,516 -726
Total comprehensive income (loss) for the period -3,478 -27 5,377 -614
Other comprehensive income (loss) -3,343 -2,509 10,537 -6,181
Total comprehensive income (loss) attributable to:
    Owners of the Company -3,343 -2,547 10,537 -6,158
    Non-controlling interests 0 38 0 -23

Interim Report Q4 2023 

Priit Treial
CFO and Member of the Management Board
+372 674 7400

The merger of Harju Elekter Group’s Swedish subsidiaries was registered in the business register

AS Harju Elekter Group published a stock exchange announcement on 16.12.2022, in which it announced, among other things, its intention to merge LC Development Fastigheter 17 AB, a subsidiary of Harju Elekter AB involved in factory management, with Harju Elekter Services AB. On 15.01.2024, we received confirmation of the merger of LC Development Fastigheter 17 AB with Harju Elekter Services AB.

Harju Elekter Services AB is a subsidiary of AS Harju Elekter Group, which manages Harju Elekter’s industrial real estate in Sweden. The Group follows the principle of keeping production activities and property management in separate companies. The company’s board includes Aron Kuhi-Thalfeldt (chairman), Tiit Atso, Priit Treial, Tiit Luman, and Erko Lepa, and the CEO is Martin Frank (CEO of Harju Elekter AB).

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue for the first three quarters of 2023 was 158 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Additional information:
Aron Kuhi-Thalfeldt
Chief of Real Estate
+372 5171448

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

 

Changes in the Management Board of Harju Elekter’s Finnish subsidiary

Starting from January 2, 2024, Jari Jylli, the Managing Director of Harju Elekter Oy, will take over the duties of the Managing Director of Harju Elekter Group’s Finnish subsidiary Harju Elekter Kiinteistöt Oy. A stock exchange announcement about Jari Jylli’s appointment was published on 5 October 2023.

The former Managing Director of Harju Elekter Kiinteistöt Oy, Simo Puustelli, is retiring. The Harju Elekter team thanks him for his long-term cooperation and contribution to Harju Elekter’s development.

Harju Elekter Kiinteistöt Oy is a subsidiary of Harju Elekter Group, which manages the group’s industrial real estate in Finland.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue for the first three quarters of 2023 was 158 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

 

Publication of Financial Reports in 2024

AS Harju Elekter Group wishes the shareholders Happy Holidays and informs them that in the year 2024, the consolidated financial results will be published as follows:

2023 Q4 interim report                  21 February 2024
2023 audited annual report           27 March 2024
2024 Q1 interim report                  24 April 2024
2024 Q2 interim report                  24 July 2024
2024 Q3 interim report                  23 October 2024

The Annual General Meeting will be held on 26 April 2024.

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

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 53408444
marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

Harju Elekter Group financial results, 1-9/2023

Harju Elekter’s Q3 financial results continue to be profitable. A strong profit is Harju Elekter’s most important sustainability objective, without which it will not be possible to meet the growing expectations of stakeholders. The third quarter saw a number of important and successful events: the appointment of managing directors for subsidiaries in Sweden and Finland; winning the procurement contract with Elektrilevi for supplying substations for the next five years; and exiting the wholesale and retail business in Estonia. Although the individual project contracts signed by our Swedish subsidiary a few years ago have proven to be more unprofitable than expected, the potential of the Swedish market and the demand for our products are sufficient to continue our efforts of starting up a factory in Sweden and reaching profitability in the coming quarters and years. Evaluating Harju Elekter’s overall financial position and the developments resulting from the restructuring of the Group’s management structure, Harju Elekter can be satisfied with the results as it celebrates its 55th year of operation.

Revenue and financial results

The Group’s revenue for the reporting quarter was 56.2 (2022 Q3: 46.1) million euros, growing by 22.1% compared to the comparable period. Nine-month revenue increased by 26.3% compared to the comparable period, being 158.3 (2022 9M: 125.3) million euros. The majority of the increase in revenue came from the sale of electrical equipment, increasing by 11.7 million euros year-on-year. In the comparison of nine months, the revenue of electrical equipment increased by 39.4 million euros.

EUR’000   Q3 Q3 +/- 9 M 9 M +/-
    2023 2022   2023 2022  
Revenue 56,247 46,081 22.1% 158,277 125,315 26.3%
Gross profit 7,378 5,803 27.1% 19,372 9,751 98.7%
EBITDA 4,899 3,182 54.0% 10,524 1,161 806.5%
Operating profit/loss (-) (EBIT) 3,846 1,691 127.4% 7,323 -2,482 395.0%
Profit/loss (-) for the period 3,393 1,406 141.3% 5,026 -3,085 262.9%
Earnings per share (EPS) (euros) 0.18 0.08 137.5% 0.27 -0.17 258.8%

The gross profit for the reporting quarter was 7,378 (2022 Q3: 5,803) thousand euros and the gross margin was 13.1% (2022 Q3: 12.6%). Operating profit (EBIT) was 3,846 (2022 Q3: 1,691) thousand euros. The operating margin of the third quarter was 6.8% (2022 Q3: 3,7%). The net profit for the reporting quarter was 3,393 (2022 Q3: 1,406) thousand euros. Net profit per share in the third quarter was 0.18 (2022 Q3: 0.08) euros.

The gross profit for the nine months was 19,372 (2022 9M: 9,751) thousand euros and the gross margin was 12.2% (2022 9M: 7.8%). During the nine months, operating profit (EBIT) was 7,323 (2022 9M: operating loss -2,482) and net profit 5,026 (2022 9M: net loss -3,085) thousand euros. Net profit per share was 0.27 (2022 9M: net loss per share -0.17) euros.

Core business and markets

During the reporting quarter, the Group’s core activity – production – accounted for 95.2% (2022 Q3: 89.3%) of its revenue. The revenue of the production segment increased by 30.1% in the reporting quarter and 34.9% compared to nine months, being 53.6 and 150.1 million euros, respectively.

The Group’s largest target markets are Estonia, Finland, Sweden, and Norway, where a total of 81.7% (2022 Q3: 92.6%) of the Group’s products and services were sold in the reporting quarter.

In the third quarter, 5.1 (2022 Q3: 8.9) million euros were earned from Estonia, which was 3.8 million euros less than a year earlier. Compared to nine months, the revenue decreased by 7.0 million to 15.6 million euros. The decrease in revenue in both periods is mostly related to the termination of the retail and project-based sale of electrical products in Estonia and the decrease in sales of electrical equipment to contractual customers.

Revenue from the Finnish market in the third quarter was 20.5 (2022 Q3: 21.8) million euros in the third quarter and 63.7 (2022 9M: 60.6) million in nine months. The majority of the increase in revenue came from the sale of automation equipment and low-voltage switchgears to key customers. During the reporting quarter, 36.5% (2022 Q3: 47.3%) of Harju Elekter products and services were sold to the Group’s largest market.

The revenue of the Swedish market increased due to the rise in the sale of substations and the growth of project business, being 7.7 (2022 Q3: 6.4) in the reporting quarter and 23.3 (2022 9M: 15,8) million in the nine months. Sweden accounted for 13.7% (2022 Q3: 14.0%) of the revenue of the reporting quarter.

Revenue from the Norwegian market was 12.6 (2022 Q3: 5.5) in the reporting quarter and 28.1 (2022 9M: 12.9) million euros in nine months. The Norwegian market accounted for 22.4% (2022 Q3: 12.0%), of the revenue of the reporting quarter, growing into the second largest market after Finland.

Investments

During the reporting period, Harju Elekter Group invested a total of 5.0 (2022 9M: 3.1) million euros in non-current assets, incl 4.2 (2022 9M: 1.6) in investment properties, 0.6 (2022 9M: 1.1) in property, plant, and equipment and 0.2 (2022 9M: 0.4) million euros in intangible assets. Most of the investments during the reporting period were made in the construction of the production building to be rented out to Reimax Electronics OÜ in the Allika Industrial Park, scheduled to be completed by the end of the year. In addition, investments were made in other real estate objects, production technology equipment, and production and process management systems.

The value of the Group’s non-current financial investments totalled 32.5 (31.12.22: 23.7) million euros as of the reporting date. Due to the revaluation of financial assets performed in the second quarter, the estimated fair value of OÜ Skeleton Technologies Group’s investment increased by 8.8 million euros to 30.6 million euros. The fair value didn’t change in the third quarter.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.0 euros. As of 30 September 2023, AS Harju Elekter Group had 11,269 shareholders. The number of shareholders increased during the reporting quarter by 95 members.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited
EUR ‘000 30.09.2023 31.12.2022 30.09.2022
ASSETS
Current assets
Cash and cash equivalents 596 9,152 504
Trade and other receivables 42,522 31,612 34,069
Prepayments 1,818 1,126 1,497
Inventories 40,183 37,068 43,809
Total current assets 85,119 78,958 79,879
Non-current assets
Deferred income tax assets 994 1 008 756
Non-current financial investments 32,509 23,731 23,707
Investment properties 28,146 24,756 24,754
Property, plant, and equipment 33,590 35,740 25,490
Intangible assets 7,315 7,244 7,372
Total non-current assets 102,554 92,479 82,079
TOTAL ASSETS 187,673 171,437 161,958
LIABILITIES AND EQUITY
Liabilities
Borrowings 19,839 24,385 20,667
Prepayments from customers 18,675 16,827 8,021
Trade and other payables 28,343 24,502 32,720
Tax liabilities 3,618 3,478 3,881
Current provisions 60 2,103 535
Total current liabilities 70,535 71,295 65,824
Borrowings 23,743 20,732 14,222
Other non-current liabilities 0 0 32
Total non-current liabilities 23,743 20,732 14,254
TOTAL LIABILITIES 94,278 92,027 80,078
Equity
Share capital 11,655 11,523 11,523
Share premium 3,306 2,509 2,509
Reserves 26,580 17,768 17,756
Retained earnings 51,854 47,771 50,291
Total equity attributable to the owners of the parent company 93,395 79,571 82,079
Non-controlling interests 0 -161 -199
Total equity 93,395 79,410 81,880
TOTAL LIABILITIES AND EQUITY 187,673 171,437 161,958

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS        
Unaudited
EUR ‘000 Q3 Q3 9 M 9 M
2023 2022 2023 2022
Revenue 56,247 46,081 158,277 125,315
Cost of sales -48,869 -40,278 -138,905 -115,564
Gross profit 7,378 5,803 19,372 9,751
Distribution costs -1,392 -1,264 -4,060 -4,128
Administrative expenses -2,164 -2 728 -7,455 -8,157
Other income 24 0 223 342
Other expenses 0 -120 -757 -290
Operating profit/loss (-) 3,846 1,691 7,323 -2,482
Finance income 3 0 71 74
Finance costs -340 -146 -1,910 -377
Profit/loss (-) before tax 3,509 1,545 5,484 -2,785
Income tax -116 -139 -458 -300
Profit/loss (-) for the period 3,393 1,406 5,026 -3,085
Profit /loss (-) attributable to:
    Owners of the parent company 3,393 1,493 5,026 -3,024
    Non-controlling interests 0 -87 0 -61
Earnings per share      
   Basic earnings per share (euros) 0.18 -0.08 0.27 -0.17
   Diluted earnings per share (euros) 0.18 -0.08 0.27 -0.17

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME        
Unaudited
EUR ‘000 Q3 Q3 9 M 9 M
2023 2022 2023 2022
Profit/loss (-) for the period 3,393 1,406 5,026 -3,085
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi¬aries -49 -96 74 -161
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 0 320
   Net gain/loss (-) on revaluation of financial assets -83 112 8,782 -746
Total comprehensive income (loss) for the period -132 16 8,856 -587
Other comprehensive income (loss) 3,261 1,422 13,882 -3,672
Total comprehensive income (loss) attributable to:
    Owners of the Company 3,261 1,412 13,882 -3,708
    Non-controlling interests 0 10 0 36

HEG Interim Report Q3 2023

Priit Treial
CFO and Member of the Management Board
+372 674 7400

 

Changes in the Management Board of Harju Elekter Oy

AS Harju Elekter Group announced on 15 June 2023 that they have commenced the search for the Managing Director of Harju Elekter Oy. Today, the competition has been successfully concluded and on 2 January 2024 Jari Jylli will become the Managing Director of Harju Elekter Oy. Until then the company’s interim Managing Director role is being fulfilled by the Chief Financial Officer Anne Penttilä.

Jari Jylli has been working at Cimcorp Group in various leading positions for almost 17 years and he has a solid track-record in operations and automation. He obtained his higher education at Satakunnan University of Applied Sciences in 2005. Jari Jylli does not own Harju Elekter shares.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue in the first six months of 2023 was 102 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

 

Acquisition of additional shareholding in Energo Veritas OÜ and change of Board

On 29.09.2023, AS Harju Elekter Group and Reinvent OÜ concluded a contract of sale of a share in a private limited company, in which AS Harju Elekter Group acquires a 19.48% share in Energo Veritas OÜ. As a result of the transaction, AS Harju Elekter Group will become the sole shareholder of Energo Veritas OÜ, holding the sole share of Energo Veritas OÜ with a nominal value of EUR 2,500.

A part of the Harju Elekter Group, Energo Veritas OÜ is a company that provides electrical materials and equipment, including technical consultancy and development of solutions, bundling of goods according to the customer’s requirements and deliveries to the construction site. In line with the strategy of AS Harju Elekter Group to focus on the production of its own factory, the purpose of the transaction is to discontinue the retail and wholesale activities of Energo Veritas OÜ.

As the sole shareholder of Reinvent OÜ, Kristo Reinhold, is a Member of the Management Board of Energo Veritas OÜ, the transaction qualifies as a transaction with related parties and is not a material transaction for the purposes of the Rules and Regulations of Nasdaq Tallinn Stock Exchange. The members of the supervisory board and management board of AS Harju Elekter Group are not personally or in other way interested in the transaction.

As a result of the transaction, Kristo Reinhold will be recalled from the Management Board of Energo Veritas OÜ as of 30.09.2023, and Aron Kuhi-Thalfeldt, a Member of the Management Board of AS Harju Elekter Group and Head of the Real Estate Unit, will be appointed as the new Member of the Management Board.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue in the first six months of 2023 was 102 million euros.

Tiit Atso

Chairman of the Management Board

+372 674 7400

 

 

Changes in the Management Board of Harju Elekter AB

AS Harju Elekter Group published a stock exchange notice on 6 February 2023  announcing Martin Frank taking over as acting director. Today, Martin Frank has proven himself in the temporary position, and AS Harju Elekter Group has decided that he will move to the Managing Director position starting from 2 October 2023.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue in the first six months of 2023 was 102 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

Harju Elekter won Eesti Energia tender

AS Harju Elekter, a subsidiary of AS Harju Elekter Group, won the tender of Eesti Energia AS for the supply of prefabricated substations, distribution points, and equipment. Contracts are concluded after the dispute period has passed.

Framework agreements with a total value of 115 million euros will be concluded with Elektrilevi OÜ for 36 months, with the option to extend by 24 months. Under the agreements, goods will be supplied to other companies within the Eesti Energia Group, as well as to contract partners of Elektrilevi OÜ and Enefit Connect OÜ.

Eesti Energia is an international energy company that provides people with beneficial and convenient energy solutions, while continuously producing energy in a more environmentally friendly manner. Eesti Energia’s domestic market extends from Finland to Poland. Elektrilevi is the largest network operator in Estonia, that covers 95% of Estonia with electricity grid. It is managing approximately 63,000 kilometres of power lines and 25,300 substations. Elektrilevi has more than 533,000 electricity network services customers.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 1000 people, and the Group’s revenue in the first six months of 2023 was 102 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information: Alvar Sass, Managing Director of AS Harju Elekter, +372 5393 3039

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

 

Harju Elekter Group financial results, 1-6/2023

Harju Elekter Group continued to implement the new strategic plan at the desired level and showed a strong growth trend in the second quarter of 2023. Last quarter, we achieved a record turnover and operating profit. Successful price negotiations in framework procurements, as well as with other contractors helped to secure a strong result. In addition, we have introduced new pricing models to better mitigate the risks of changing input prices. At the same time, supply chains for the production of electrical equipment have improved, and the prices of materials and components have stabilised at higher price levels. The Group continues to improve efficiency to increase profitability.

Revenue and financial results

As a result of successful sales and production activities, the revenue in the reporting quarter was 35.4% more than a year earlier, 56.8 million euros. Revenue for the six months increased by 28.8% compared to the comparable period, reaching 102.0 (2022 6M: 79.2) million euros. The Group achieved increased sales of low-voltage switchgears, frequency converters, and e-houses. Additionally, larger projects that involved energy-saving solutions for the modernisation and construction of low-carbon ships were successfully completed.

EUR’000   Q2 Q2 +/- 6 M 6 M +/-
    2023 2022   2023 2022  
Revenue 56,762 41,914 35.4% 102,030 79,235 28.8%
Gross profit 6,611 963 586.5% 11,996 3,949 203.8%
EBITDA 3,243 -1,953 266.1% 5,625 -2,022 378.2%
Operating profit/loss (-) (EBIT) 2,168 -3,048 171.1% 3,477 -4,174 183.3%
Profit/loss (-) for the period 884 -3,197 127.7% 1,633 -4,491 136.4%
 Incl. attributable to owners of the parent company 982 -3,209 130.6% 1,763 -4,517 139.0%
Earnings per share (EPS) (euros) 0.05 -0.18 127.8% 0.10 -0.25 140.0%

The gross profit for the reporting quarter was 6,611 (2022 Q2: 963) thousand euros and the gross margin was 11.6% (2022 Q2: 2.3%). Operating profit (EBIT) was 2,168 (2022 Q2: operating loss -3,048) thousand euros. The business profitability of the second quarter was 3.8% (2022 Q2: -7.3%). The net profit for the reporting quarter was 884 (2022 Q2: net loss -3,197) thousand euros, of which the share of the owners of the parent company was 982 (2022 Q2: -3,209) thousand euros. Net profit per share in the second quarter was 0.05 (2022 Q2: net loss per share -0.18) euros.

The gross profit for the first half of the year was 11,996 (2022 6M: 3,949) thousand euros and the gross margin was 11.8% (2022 6M: 5.0%). During the six months, operating profit (EBIT) was 3,477 (2022 6M: operating loss -4,174) and net profit 1,633 (2022 6M: net loss -4,491) thousand euros. Net profit per share was 0.10 (2022 6M: net loss per share -0.25) euros.

Core business and markets

During the reporting quarter, the Group’s core activity – production – accounted for 95.1% of its revenue. The revenue of the production segment increased by 44.3% in the reporting quarter and 37.7% compared to six months, being 54.0 and 96.6 million euros, respectively.

In the second quarter, 5.6 (2022 Q2: 6.9) million euros were earned from Estonia, which was 18.8% less than a year earlier. Compared to six months, the revenue also decreased by 23.5%, to 10.5 million euros. The decrease in revenue in both periods is mostly related to the termination of the retail and project-based sale of electrical products in Estonia.

Compared to both periods, the revenue of the Finnish market was 11% more than a year earlier, amounting to 24.5 in the quarter and 43.1 million euros in the first half of the year. The majority of the increase in revenue came from the sale of automation equipment and low-voltage switchgears to key customers and from the growth of orders for car heating and charging equipment. During the reporting quarter, 43.2% (2022 Q2: 52.6%) of Harju Elekter products and services were sold to the Group’s largest market.

The revenue of the Swedish market increased due to the rise in the sale of substations and the growth of project business, being 9.1 (2022 Q2: 3.5) in the reporting quarter and 15.6 (2022 6M: 9.3) million in the half-year. Swedish market accounted for 16.1% (2022 Q2: 8.3%) of the revenue of the reporting quarter.

Sales to the Norwegian market in the second quarter multiplied, achieving the largest sales growth across all markets. Several long-term projects were realised for key customers, allowing revenue to be earned in the amount of 11.5 (2022 Q2: 2.9) million euros in the reporting quarter and 15.5 (2022 6M: 7.4) million euros in the half-year. The Norwegian market accounted for 20.2% (2022 Q2: 6.9%) of the revenue of the reporting quarter.

Investments

During the reporting period, the Group invested a total of 2.6 (2022 6M: 2.2) million euros in non-current assets, incl 2.1 (2022 6M: 1.2) in investment properties, 0.4 (2022 6M: 0.7) in property, plant, and equipment and 0.1 (2022 6M: 0.3) million euros in intangible assets. Most of the investments during the reporting period were made in the construction of the production building to be rented out to Reimax Electronics OÜ in the Allika Industrial Park, scheduled to be completed by the end of the year. In addition, investments were made in other real estate objects, production technology equipment, and production and process management systems.

The value of the Group’s non-current financial investments totalled 32.6 (31.12.22: 23.7) million euros as of the reporting date. Due to the revaluation of financial assets performed in the reporting quarter, the estimated fair value of OÜ Skeleton Technologies Group’s investment increased by 8.8 million euros to 30.6 million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.0 euros. As of 30 June 2023, AS Harju Elekter Group had 11,174 shareholders. The number of shareholders decreased during the reporting quarter by 58 members.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited
EUR ‘000 30.06.2023 31.12.2022 30.06.2022
ASSETS
Current assets
Cash and cash equivalents 2,339 9,152 629
Trade and other receivables 38,447 31,612 31,134
Prepayments 2,143 1,126 1,729
Inventories 46,747 37,068 38,185
Total current assets 89,676 78,958 71,677
Non-current assets
Deferred income tax assets 985 1,008 762
Non-current financial investments 32,593 23,731 23,596
Investment properties 26,314 24,756 24,647
Property, plant, and equipment 33,919 35,740 25,794
Intangible assets 7,267 7,244 7,711
Total non-current assets 101,078 92,479 82,510
TOTAL ASSETS 190,754 171,437 154,187
LIABILITIES AND EQUITY
Liabilities
Borrowings 20,768 24,385 20,398
Prepayments from customers 18,769 16,827 8,558
Trade and other payables 32,034 24,502 27,615
Tax liabilities 4,219 3,478 3,525
Current provisions 1,950 2,103 551
Total current liabilities 77,770 71,295 60,647
Borrowings 23,780 20,732 14,158
Other non-current liabilities 0 0 33
Total non-current liabilities 23,780 20,732 14,191
TOTAL LIABILITIES 101,550 92,027 74,838
Equity
Share capital 11,523 11,523 11,352
Share premium 2,509 2,509 1,601
Reserves 26,843 17,768 17,913
Retained earnings 48,620 47,771 48,595
Total equity attributable to the owners of the parent company 89,495 79,571 79,461
Non-controlling interests -291 -161 -112
Total equity 89,204 79,410 79,349
TOTAL LIABILITIES AND EQUITY 190,754 171,437 154,187

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS        
Unaudited
EUR ‘000 Q2 Q2 6M 6M
2023 2022 2023 2022
Revenue 56,762 41,914 102,030 79,235
Cost of sales -50,151 -40,951 -90,034 -75,286
Gross profit 6,611 963 11,996 3,949
Distribution costs -1,313 -1,515 -2,668 -2,866
Administrative expenses -2,711 -2,764 -5,291 -5,429
Other income 181 322 199 378
Other expenses -600 -54 -759 -206
Operating profit/loss (-) 2,168 -3,048 3,477 -4,174
Finance income   -7 34 68 74
Finance costs -1,021 -111 -1,570 -230
Profit/loss (-) before tax 1,140 -3,125 1,975 -4,330
Income tax -256 -72 -342 -161
Profit/loss (-) for the period 884 -3,197 1,633 -4,491
Profit /loss (-) attributable to:
    Owners of the parent company 982 -3,209 1,763 -4,517
    Non-controlling interests -98 12 -130 26
Earnings per share        
   Basic earnings per share (euros) 0.05 -0.18 0.10 -0.25
   Diluted earnings per share (euros) 0.05 -0.18 0.10 -0.25

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME        
Unaudited
EUR ‘000 Q2 Q2 6M 6M
2023 2022 2023 2022
Profit/loss (-) for the period 884 -3,197 1,633 -4,491
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries 164 -86 123 -65
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 169 0 320
   Net gain/loss (-) on revaluation of financial assets 8,830 -336 8,866 -858
Total comprehensive income (loss) for the period 8,994 -253 8,989 -603
Other comprehensive income (loss) 9,878 -3,450 10,622 -5,094
Total comprehensive income (loss) attributable to:
    Owners of the Company 9,976 -3,462 10,752 -5,120
    Non-controlling interests -32 12 -130 26

HEG Interim Report Q2 2023

Priit Treial
CFO and Member of the Management Board
+372 674 7400

Increase of Share Capital in Connection with Realization of the Employee Option Programme and Subscription Results

The Supervisory Board of AS Harju Elekter Group decided to increase the share capital of the company by 131,835.06 euros by issuing new ordinary shares. The increase of the share capital was triggered by the need to issue new shares to the key persons of Harju Elekter Group, incl. the members of the governing bodies, leading specialists, and engineers, participating in the option program approved with the resolution of the general meeting on 3 May 2018.

A total of 41 current and former employees of Harju Elekter participated in the issue of AS Harju Elekter Group shares total of 209,262 shares for a total of 929,123.28 euros.  A total of 82,306 shares were not subscribed.

Decisions of the Supervisory Board of AS Harju Elekter Group:

1.Harju Elekter’s share capital will be increased by a maximum of 131,835.06 euros, i.e., from 11,522,390.04 euros to 11,654,225.10 euros.

2.The share capital will be increased by way of issuing new shares (ISIN: EE3100004250). During the increase of the share capital to issue 209,262 new ordinary shares of Harju Elekter, with a book value of 0.63 euros per share. The increase of the share capital and payment for the new shares will be carried out fully by way of monetary contribution. The shares will be issued with a share premium. The issue price is 4.44 euros per share, with a book value of the share amounting to 0.63 euros and the share premium to 3.81 euros.

3.After the increase of the share capital, Harju Elekter has a total of 18,498,770 ordinary shares without nominal value. The increase of Harju Elekter’s share capital will not create any exceptions or special rights in connection with the ordinary shares. The new shares to be issued during the increase of share capital shall grant the right to dividend for the financial year starting on 1 January 2023.

4.Pursuant to the resolution of the general meeting of 3 May 2018, which approved Harju Elekter’s share option program and its basic conditions, 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 determined by Harju Elekter’s Supervisory Board and with whom Harju Elekter has concluded the relevant option agreements  shall have the pre-emptive right to subscribe Harju Elekter’s new shares. Harju Elekter’s shareholders, who are not intended to benefit from share option program approved with the resolution of the general meeting of 3 May 2018, shall not have any pre-emptive right to subscribe Harju Elekter’s shares within the framework of the increase of the share capital.

5.The due date for exercising the pre-emptive right of subscription and the due date for subscribing shares was 14 July 2023. The option beneficiaries submitted their subscription notes in a timely manner and made payments for the subscribed shares.

6.To grant to Harju Elekter’s management board a right to cancel the new shares which have not been subscribed for during the subscription period. The board may exercise the aforementioned right within 15 days after the end of the subscription period.

All new shares of Harju Elekter issued during the share issue will be listed on Nasdaq Tallinn on the day following the date on which the additionally issued shares with temporary ISINs have been included in the Estonian Central Securities Depository (Nasdaq CSD) together with the previously issued shares with main ISINs.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in the first quarter of 2023 was 45.3 million euros.

Ursula Põld
Lawyer
+372 53 014616
ursula.pold@harjuelekter.com

 

Change in the Management Board of Harju Elekter Oy

AS Harju Elekter Group has decided, by agreement between the parties, to terminate the contract with Harju Elekter Oy’s Managing Director Jan Osa on 30 June 2023.

Jan Osa joined Harju Elekter as an engineer in 1994. Throughout his career, he has served as a Project Manager, Sales Department Manager, and Sales Director. For four years prior to becoming the Managing Director of the Finnish subsidiary, Jan Osa held the position of Managing Director at Harju Elekter Elektrotehnika. Harju Elekter expresses its gratitude to Jan Osa for his dedicated contributions to the company and extends its best wishes for his future endeavours.

Starting from 1 July 2023, the responsibilities of the Interim Managing Director will be assumed by Anne Penttilä, the company’s Chief Financial Officer. Anne Penttilä has obtained master’s degree in accounting from Oulu University and bachelor’s degree in business management from both the Oulu Regional University of Applied Sciences and the University of Coventry in England. Prior to joining Harju Elekter, she worked as a country accountant and controller at Ahlström Konsernipalvelut Oy and Venator P&A Finland Oy. Anne Penttilä joined Harju Elekter in 2018 as the Chief Financial Officer and has also been responsible for the HR and ICT functions. Anne Penttilä is owning 4000 shares of Harju Elekter.

Harju Elekter has initiated the search for a new Managing Director for Harju Elekter Oy.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in the first quarter of 2023 was 45.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Harju Elekter Group signed a lease agreement with Prysmian Group Baltics AS

AS Harju Elekter Group and Prysmian Group Baltics AS signed a lease agreement on 5 June 2023 until 2030. With the extended lease agreement, the real estate department of Harju Elekter Group leases to Prysmian Group Baltics more than 20,000 m² of production, storage and office space and nearly 40,000 m² of external storage territory. The contract also agreed on a large-scale renovation and reconstruction of the premises, the investment cost of which is up to 3 million euros.

Prysmian Group is a major global company at the forefront of innovative cable technology and whose shares are listed on the Milan Stock Exchange. Each year, the Group manufactures thousands of kilometers of underground and submarine cables and systems for power transmission and distribution, as well as medium and low voltage cables for the construction and infrastructure sectors. The group operates in 50 countries, 106 plants and 25 research and development centres and has about 29,000 employees.

The real estate unit of Harju Elekter Group is engaged in the development of industrial real estate, project management, leasing, and related services for both rental partners and Harju Elekter’s own companies. The real estate unit manages a total of nine industrial parks in Estonia, Finland, Sweden, and Lithuania.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175.3 million euros.

Aron Kuhi-Thalfeldt
Real Estate Department Manager/Member of the Management Board
+372 5171448

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Change in the business name and the articles of association of the subsidiary of Harju Elekter

Today, the new business name of AS Harju Elekter Elektrotehnika, AS Harju Elekter, was entered into the commercial register. The new wording of the articles of association, which reflects the change of business name, was also approved.

With the change of AS Harju Elekter Elektrotehnika’s business name to AS Harju Elekter, the harmonization of the business names of subsidiaries of AS Harju Elekter Group is complete. From today, all subsidiaries engaged in core activities bear the name Harju Elekter, in order to create greater clarity for the group’s stakeholders in different countries.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Response to the article referenced by Äripäev: “Harju Elekter’s Lithuanian Plant Not Accepting Orders for the Next Year: Full Capacity Reached”

On 19 May 2023, Äripäev published an article about the interview given by the Managing Director of Harju Elekter Group’s Lithuanian subsidiary to the Lithuanian business newspaper Verslo Žinios.

The Managing Director of Harju Elekter UAB provided information that deviates from Harju Elekter’s principles of not disclosing forecasts and reflecting and commenting only on factual information that has occurred. Harju Elekter acknowledges the potential for positive outcomes at the Lithuanian factory; however, we feel it is necessary to address the significant uncertainties present in today’s economic environment. Therefore, we are unable to provide precise projections for the results of the Lithuanian subsidiary.

The statement implying that the Lithuanian subsidiary no longer accepts orders is misleading. As a cohesive Group, we possess the capability to fulfil orders not only through our Lithuanian factory but also via our Estonian, Finnish, and Swedish production units.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

 

Change in the business name and the articles of association

Today, the new business name of Harju Elekter, AS Harju Elekter Group, was entered into the commercial register. The new wording of the articles of association, which reflects the change of business name, was also approved. Subsequently, there are plans to change the business name and articles of association of AS Harju Elekter Elektrotehnika, the Estonian subsidiary.

With the change of AS Harju Elekter Elektrotehnika’s business name to AS Harju Elekter, the harmonization of the business names of subsidiaries of Harju Elekter Group will be complete. All subsidiaries engaged in the main activities will bear the name Harju Elekter. The aim of these changes in business names is to create greater clarity for the Group’s stakeholders in different countries.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Subsidiary of Harju Elekter signs electrification contract for two vessels for the Finnish Border Guard

The Finnish subsidiary of Harju Elekter Group, Telesilta Oy, signed a contract on 9 May 2023 with Uudenkaupungin Työvene Oy to provide electrification and commissioning works for two patrol vessels to the Finnish Border Guard. The contract price is approximately 6.5 million euros. The first vessel will be completed in 2025 and the second in 2026.

Uudenkaupungin Työvene, established in 1987, has extensive experience in designing and building boats and vessels for professional use. The company delivers tailor-made turnkey projects on time and to cost. Telesilta Oy and Uudenkaupungin Työvene Oy have a long history in working as partners in the shipbuilding industry.

Telesilta Oy is an electrical engineering company established in 1978 and belonging to the Harju Elekter Group. The company specializes in challenging electrical contracting, for example, in shipbuilding industry – everything from planning to installation, implementation, and service. It also carries out electrical, maintenance, and repair work on industrial properties and other buildings.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Dividend payment ex-date of AS Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 17 May 2023 at the end of the working day of the Nasdaq CSD Estonian settlement system.

Proceeding from the above, the day of change of the rights related to the shares (the ex-date) is 16 May 2023. From that date the new owner of the shares is not entitled to dividends for the year 2022.

AS Harju Elekter will pay dividend 0.05 euros per share on 24 May 2023.

 

Ursula Põld
Lawyer
+372 674 7413

Decisions of the Annual General Meeting of AS Harju Elekter

The Annual General Meeting of Shareholders of AS Harju Elekter was held on 28 April 2023 starting at 10 a.m., at the Keila Kultuurikeskus, Keskväljak 12. The AGM was attended by 58 shareholders and their authorised representatives who represented a total of 11,403,963 votes accounting for 62.57 % of the total votes.

The decisions of the General Meeting were as follows:

1)Approval to AS Harju Elekter Annual Report of 2022

To approve the 2022 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as of 31 December 2022 is 171.4 million euros, revenue is 175.3 million euros, operating loss is 4.5 million euros and net loss is 5.6 million euros.

The number of votes given in favor of the resolution was 11,412,307 which accounted for 99.72% of the voted participants.

2)Approval to profit distribution

To approve the profit distribution proposal of AS Harju Elekter of 2022 as presented by the management board and as approved by the supervisory board as follows:

retained earnings EUR 53,314,971
Net loss for 2022 EUR -5,544,403
total distributable profit as of 31.12.2022 EUR 47,770,568
dividends (0,05 euros per share*) EUR      914,475
Retained earnings after profit distribution EUR 46,856,093

*The shareholders registered in the shareholders’ registry on 17 May 2023 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 16 May 2023. From that date the new owner of the shares is not entitled to dividends for the year 2022. The dividends will be paid to the shareholders on 24 May 2023 by a transfer to the bank account of the shareholder.

The number of votes given in favor of the resolution was 11,392,938 which accounted for 99.55% of the voted participants.

3)Change of business name and amendment of the Articles of Association

To approve the new business name of AS Harju Elekter as AS Harju Elekter Group and to approve the new wording of the articles of association as presented to the General Meeting.

The number of votes given in favor of the resolution was 11,408,046 which accounted for 99.69 % of the voted participants.

The webinar recording of the annual general meeting is found at https://youtu.be/uc0EViP2M3M

 

Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group financial results, 1-3/2023

During the reporting quarter, Harju Elekter Group’s revenue growth and profitability were significantly impacted by the review of the business processes, increased production efficiency, and reduced problems with material and component supply. Furthermore, the positive result can be attributed to important decisions made to optimize business operations and achieve cost savings, as well as successful price negotiations in framework procurements. The Group remains committed to improving efficiency in order to increase profitability.

Revenue and financial results

Harju Elekter Group’s revenue in the reporting quarter was 45.3 (2022 Q1: 37.3) million euros, which is 21,3% more than a year before and historically the best first quarterly result. More low-voltage switchgears and frequency converter switchboards were sold, and larger projects were realised.

EUR ’000   3M 3M +/-
    2023 2022  
Revenue 45,269 37,321 21.3%
Gross profit 5,386 2,986 80.3%
EBITDA 2,382 -68 3601.5%
Operating profit/loss (-) (EBIT) 1,309 -1,125 216.3%
Profit/loss (-) for the period 749 -1,294 157.9%
 Incl. attributable to owners of the parent company 781 -1,308 159.7%
Earnings per share (EPS) (euros) 0.04 -0.07 157.1%

Core business and markets

During the reporting quarter, the Group’s core activity – production – accounted for 94.1% of its revenue. The revenue of the production segment increased by 30.1% in the reporting quarter, being 42.6 million euros.

In the reporting quarter, 5.0 (2022 Q1: 6.9) million euros were earned from Estonia, making up 10.9% (2022 Q1: 18.5%) of the revenue. The revenue to the Estonian market decreased by 1.9 million euros, and this is mainly related to the termination of the retail and project-based sale of electrical products in Estonia.

In the reporting quarter, the revenue earned from the Finnish market was 11.6% more than a year before, totalling 18.6 (2022 Q1: 16.7) million euros. The majority of the increase in revenue came from the sale of automation equipment and low-voltage switchgears to key customers and from the growth of orders for car heating and charging equipment and solar panel systems. In addition, the volume of electrical works in the Finnish shipbuilding sector increased. During the reporting quarter, 41.2% (2022 Q1: 44.7%) of Harju Elekter products and services were sold to the Group’s largest market.

The revenue of the Swedish market increased by 11.1% in the comparison of first quarters due to the increase in sale of substations and the growth of project business, being 6.5 (2022 Q1: 5.8) million euros. Sweden accounted for 14.3% (2022 Q1: 15.6%) of the revenue of the reporting quarter.

Revenue from the Norwegian market decreased compared to the previous year, being 4.0 (2022 Q1: 4.5) million euros. The Norwegian market accounted for 8.9% (2022 Q1: 12.1%) of the revenue of the reporting quarter.

Investments

During the reporting period, the Group invested a total of 0.6 (2022 Q1:  1.5) million euros in non-current assets, incl 0.3 (2022 Q1: 1.0) million euros in investment properties, 0.2 (2022 Q1: 0.4) million euros in property, plant, and equipment and 0.1 (2022 Q1: 0.1) million euros in intangible assets. Investments were mostly made in production technology equipment, production, and process management systems.

The value of the Group’s non-current financial investments totalled 23.8 (31.12.22: 23.7) million euros as of the reporting date.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.0 euros. As of 31 March 2023, AS Harju Elekter had 11,232 shareholders. The number of shareholders increased during the reporting quarter by 648 members.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited
EUR ‘000 31.03.2023 31.12.2022 31.03.2022
ASSETS
Current assets
Cash and cash equivalents 1,028 9,152 286
Trade and other receivables 37,627 31,612 35,663
Prepayments 1,945 1,126 3,119
Inventories 44,704 37,068 37,692
Total current assets 85,304 79,958 76,760
Non-current assets
Deferred income tax assets 1,002 1,008 776
Non-current financial investments 23,767 23,731 24,410
Investment properties 24,766 24,756 24,603
Property, plant, and equipment 35 042 35 740 26,303
Intangible assets 7,284 7,244 7,659
Total non-current assets 91,861 92,479 83,751
TOTAL ASSETS 177,165 171,437 160,511
LIABILITIES AND EQUITY
Liabilities
Borrowings 18,366 24,385 21,354
Prepayments from customers 21,310 16,827 6,681
Trade and other payables 31,888 24,502 31,063
Tax liabilities 3,033 3,478 3,663
Current provisions 1,950 2,103 51
Total current liabilities 76,547 71,295 62,812
Borrowings 20,412 20,732 12,401
Other non-current liabilities 0 0 33
Total non-current liabilities 20,412 20,732 12,434
TOTAL LIABILITIES 96,959 92,027 75,246
Equity
Share capital 11,523 11,523 11,352
Share premium 2,509 2,509 1,601
Reserves 17,815 17,768 18,278
Retained earnings 48,552 47,771 54,158
Total equity attributable to the owners of the parent company 80,399 79,571 85,389
Non-controlling interests -193 -161 -124
Total equity 80,206 79,410 85,265
TOTAL LIABILITIES AND EQUITY 177,165 171,437 160,511

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS    
Unaudited
EUR ‘000 3M 3M
2023 2022
Revenue 45,269 37,321
Cost of sales -39,883 -34,335
Gross profit 5,386 2,986
Distribution costs – 1,356 – 1,350
Administrative expenses -2,580 -2,655
Other income 18 56
Other expenses -159 -152
Operating profit/loss (-) 1,309 -1,125
Finance income   75 39
Finance costs -549 -119
Profit/loss (-) before tax 835 -1,205
Income tax -86 -89
Profit/loss (-) for the period 749 -1,294
Profit /loss (-) attributable to:
    Owners of the parent company 781 -1,308
    Non-controlling interests -32 14
Earnings per share    
   Basic earnings per share (euros) 0.04 -0.07
   Diluted earnings per share (euros) 0.04 -0.07

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR ‘000 3M 3M
2023 2022
Profit/loss (-) for the period 749 -1,294
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries -41 20
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 151
   Net gain/loss (-) on revaluation of financial assets 36 -521
Total comprehensive income (loss) for the period -5 -350
Other comprehensive income (loss) 744 -1,644
Total comprehensive income (loss) attributable to:
    Owners of the Company 776 -1,658
    Non-controlling interests -32 14

The Interim Report of Harju Elekter Q1 2023

Priit Treial
CFO and Member of the Management Board
+372 674 7400

Invitation to the Annual General Meeting of shareholders of AS Harju Elekter, its agenda and proposals

The Management Board of AS Harju Elekter (registry code 10029524, address Paldiski mnt 31, Keila) convenes the Annual General Meeting of shareholders. The General Meeting will take place on 28 April 2023 at 10:00 a.m. at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

Registration of meeting participants will start on 28 April 2023 at 09:00. Pursuant to subsection 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting is fixed seven days before the General Meeting, i.e. as of the end of the business day of the Nasdaq CSD Estonian settlement system on 21 April 2023.

Shareholders can vote on the items on the agenda before the General Meeting by e-mail or post and to follow the General Meeting as a webinar. A more detailed overview of how it is possible to vote before the General Meeting and to participate in the webinar is provided in the section “Organisational issues” of this notice and on the website of AS Harju Elekter at www.harjuelekter.com.

The Supervisory Board of AS Harju Elekter set the agenda of the following General Meeting and approved the following proposals:

  1. Approval of the 2022 Annual Report of AS Harju Elekter

Approve the 2022 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as of 31 December 2022 is 171,4 million euros, revenue is 175,3 million euros, operating loss is 4,5 million euros and net loss is 5,6 million euros.

  1. Approval of profit distribution

Approve the 2022 profit distribution proposal of AS Harju Elekter submitted by the Management Board and approved by the Supervisory Board as follows:

Retained earnings  EUR 53,314,971
Net loss for 2022  EUR – 5,544,403
Total distributable profit as of 31.12.2022  EUR 47,770,568

The Management Board proposes the distribution of profits as follows:

Dividends (EUR 0.05 per share*)    EUR     914,475
Retained earnings after distribution of profit  EUR  46,856,093

 

*Dividends will be paid to shareholders on 24 May 2023, by transfer to the shareholder’s bank account. The list of shareholders for the payment of dividends is established on 17 May 2023 as at the end of the business day in the accounting system. The date of the change in the rights related to the securities (ex-date) is 16 May 2023, from this date, the person who acquired the shares is not entitled to receive dividends for the financial year 2022.

  1. Change of Business name and amendment of the Articles of Association

Amend the Articles of Association of AS Harju Elekter in the form submitted to the General Meeting.

——————————————————————————-

ORGNISATIONAL ISSUES

Shareholders whose shares represent at least 1/20 of the share capital may request that additional items be included in the agenda of the General Meeting if the respective request is submitted in writing 15 days before the General Meeting, no later than on 13 April 2023.

Shareholders whose shares represent at least 1/20 of the share capital may submit a draft resolution on each item on the agenda no later than 3 days before the General Meeting, no later than on 25 April 2023. Further information on the procedure and terms for exercising the rights provided pursuant to section § 287 (right of shareholder to information), subsection 293 (2) (right to request inclusion of additional items on the agenda and subsection 2931 (3) (obligation to submit a draft resolution or a substantiation simultaneously with the demand on the modification of the agenda) and subsection 2931 (4) (right to submit a draft resolution in respect to each item on the agenda) has been disclosed on the website of AS Harju Elekter at www.harjuelekter.com. This is also where draft resolutions submitted by shareholders and the substantiations of the resolutions, if any, are also disclosed. After the agenda of the General Meeting, incl. the exhaustion of additional items on the agenda, shareholders can request information from the Management Board regarding the activities of the public limited company.

The documents of the annual general meeting of AS Harju Elekter, including the annual report, the sworn auditor’s report, the profit distribution proposal, the report of the Supervisory Board, the principles of remuneration of the members of the Management Board and the draft resolutions of the items on the agenda are available on the Nasdaq Tallinn website at http://www.nasdaqbaltic.com and on the company’s website at www.harjuelekter.com or in Keila, at Paldiski mnt 31/2. Questions regarding the items on the agenda can be submitted to the e-mail address yldkoosolek@harjuelekter.com. Questions, answers, and positions of the meeting are published on the company’s Internet website.

Appointment of a representative. Prior to the General Meeting, a shareholder may announce the appointment of a representative and the revocation of the power of attorney granted to the representative by sending an e-mail to yldkoosolek@harjuelekter.com or by handing over the said document(s) on working days from 10:00 to 16:00 but no later than on 25 April 2023 at the AS Harju Elekter office at Paldiski mnt 31/2 (3rd floor) in Keila. A shareholder may use power of attorney forms to authorize a representative available on the website of AS Harju Elekter www.harjuelekter.com.

If voting prior to the General Meeting, shareholders are requested to fill in the ballot papers available on the website of AS Harju Elekter at www.harjuelekter.com and attached to the stock exchange announcement convening the General Meeting. When voting by e-mail, the completed ballot papers must be digitally signed and sent by e-mail to yldkoosolek@harjuelekter.com no later than by 27 April 2023 at 11:00.

When voting by mail, the completed ballot papers must be signed by hand and sent with a copy of the personal data of the signatory’s identity document by mail no later than by 27 April 2023 at 11:00 to the address of AS Harju Elekter, Paldiski mnt 31/2, Keila 76606.

Ballot papers received after the above deadline shall not be considered. If a shareholder submits several completed ballot papers, the ballot paper with the latest digital signature time stamp or time of mailing shall be deemed valid. All previously submitted ballot papers shall be deemed invalid.

If the shareholder who submitted a ballot paper before the General Meeting also physically participates in the General Meeting, all ballot papers sent by the shareholder before the General Meeting shall be deemed invalid. The exact procedure for voting prior to the General Meeting is provided in the shareholder information document available on the website of AS Harju Elekter at www.harjuelekter.com and in the stock exchange announcement convening the General Meeting.

To register participants physically attending the General Meeting the following is required: shareholder who is a natural person – identity document; representative of a shareholder who is a natural person – identity document and a power of attorney in written form; legal representative of a shareholder who is a legal person – an extract from the relevant (commercial) register where the legal person is registered and an identity document of the representative; contractual representative of a shareholder who is a legal person shall submit a power of attorney in written form in addition to the documents specified above. Please legalise or apostille the documents of a legal person registered abroad in advance, unless otherwise provided by an international agreement. AS Harju Elekter may register a shareholder who is a foreign legal person as a participant in a General Meeting even if all the required information about the legal person or its representative is contained in a notarised power of attorney issued to the representative abroad and that power of attorney is acceptable in Estonia. Please present a passport or ID Card as an identity document.

Participation in the webinar of the General Meeting. We ask a shareholder to register no later than on 27 April 2023 at 11:00 here: https://nasdaq.zoom.us/webinar/register/WN_aVYxqK1gRSOc4XPytBZing. After registration, a link to the webinar and instruction for using the environment will be sent. If you are attending a webinar for the first time, you will be asked to download the required application. If downloading the application fails, the web browser will open automatically. The webinar will be held in Estonian. It is possible to follow and listen to what is happening at the General Meeting by way of the webinar. It is not possible to participate in voting through the webinar. As the time of the webinar is limited, please send questions by 11:00 on 27 April 2023 to the e-mail address yldkoosolek@harjuelekter.com. The webinar will be recorded and published on the company’s website www.harjuelekter.com as well as on the youtube.com account of Nasdaq Baltic.

Questions regarding the general meeting, also about voting, can be submitted to the e-mail address yldkoosolek@harjuelekter.com.

Information on the voting prior to the Annual General Meeting and participation in the online seminar 28.04.2023

Ballot Paper

Power of Attorney template AS Harju Elekter AGM 2023

Withdrawal of the Authorization 2023 Harju Elekter

Articles of Association

Annual Report of Harju Elekter 2022

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group’s audited Annual Report 2022

AS Harju Elekter presents its consolidated audited Annual Report for 2022 prepared by the Management Board and approved by the Supervisory Board. Compared to the unaudited interim report published on 22 February 2023, there are no differences in the audited financial results.

The consolidated audited revenue for the year 2022 was 175.3 million euros, the operating loss was 4.5 million euros and net loss 5.6 million euros.

The original audited Annual Report 2022 document is submitted in machine-readable .xhtml format to the Nasdaq Tallinn Stock Exchange and digitally signed (Link: https://nasdaqbaltic.com/statistics/en/instrument/EE3100004250/reports).

Annual Report of Harju Elekter 2022 (pdf)

Annual Report of Harju Elekter 2022 (original)

Tiit Atso
Chairman of the Management Board
+372 674 7400

Merger of AS Harju Elekter subsidiaries

AS Harju Elekter published a stock exchange notice on 26 September 2022 announcing the intragroup restructuring of two AS Harju Elekter Estonian factories- subsidiaries AS Harju Elekter Teletehnika and AS Harju Elekter Elektrotehnika. In accordance with the information published in the stock exchange notice on 26 September 2022, the merger decisions of AS Harju Elekter Elektrotehnika (the acquiring company) and AS Harju Elekter Teletehnika (the company being acquired) were adopted on 1 December 2022 and an entry of the merger in the commercial register was made on 13 March 2023.

Pursuant to the merger agreement concluded on 30 September 2022, the legal successor of AS Harju Elekter Teletehnika is AS Harju Elekter Elektrotehnika and, with the entry of the merger in the commercial register, all the assets of AS Harju Elekter Teletehnika were wholly transferred to AS Harju Elekter Elektrotehnika. Due to the merger, AS Harju Elekter Teletehnika was deleted from the commercial register 13 March 2023.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue in 2022 was 175,3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Harju Elekter Group financial results, 1-12/2022

The fourth quarter and year of Harju Elekter are marked by record revenues, increasing by almost 15% compared to previous periods. Annual revenue of 175.3 (2021: 152.8) million euros exceeds the Group’s turnover record achieved last year. The growth in sales volumes has been supported by sustained customer relationships based on long-term reliable cooperation. However, by the end of a difficult crisis year, the first loss in company history had to be absorbed. We managed to improve the financial results in the second half of the year, but despite our efforts, we had to make one-time significant reserves and write-offs, which did not allow us to make a profit. Without one-time costs, the operating profit for the last quarter would have been 0.4 (2021 Q4: 0.9) and the second half operating profit would have been 2.5 (2021 II half: 2.0) million euros.

We have laid a solid foundation for 2023 and will continue with the process of creating a cohesively functioning Harju Elekter Group. We have modern factories and equipment in Estonia, Finland, Lithuania, and Sweden. In Västerås a new production building of 6,300 m² was completed at the end of the year, which is the latest addition to our industrial real estate portfolio. With the completion of our modern factory, we decided to consolidate the various units of our Swedish subsidiary in Västerås, to ensure savings and a more cohesive and stronger local unit.

The Group has good liquidity and capitalisation, as well as a strong governance structure. In the last quarter of the year, we established a group management team comprised of experts and began the more centralised management of companies, especially in financial management-control, production-supply chain, and sales-marketing. Harju Elekter’s strategy, which is integrated with sustainability goals, will focus on increasing the sales volumes and profitability of industrial production and projects in the coming years.

Revenue and financial results

Harju Elekter earned revenue of 50.0 (2021 Q4: 43.6) million euros in the reporting quarter and 175.3 (2021: 152.8) million in the reporting year. Compared to the comparable periods, the quarterly and annual revenue growth was 14.7% and 14.8%. The majority of the increase in consolidated revenue in the reporting quarter was due to the increase in sales of low-voltage equipment, substations and electric car chargers.

EUR ’000   Q4 Q4 +/- 12M 12M +/-
    2022 2021   2022 2021  
Revenue 49,978 43,561 14.7% 175,293 152,757 14.8%
Gross profit 2,517 4,703 -46.5% 12,269 17,880 -31.4%
EBITDA -943 1,939 -148.6% 217 7,220 -97.0%
Operating profit/loss (-) (EBIT) -2,063 853 -341.9% -4,546 3,202 -242.0%
Profit/loss (-) for the period -2,482 894 -377.6% -5,567 2,610 -313.3%
 Incl. attributable to owners of the parent company -2,520 888 -383.8% -5,544 2,598 -313.4%
Earnings per share (EPS) (euros) -0.14 0.05 -380.0% -0.31 0.15 -306.7%

Core business and markets

The production segment accounted for 92.5% of the revenue for the quarter and 89.9% of the revenue for 2022. The revenue of the production segment increased by 22.7% in the reporting quarter and by 18.0% during the year, being 46.2 and 157.6 million euros, respectively.

Sales to the Estonian market was 7.6 (2021 Q4: 6.5) in the reporting quarter and 30.3 (2021: 26.0) million euros in the reporting year, making up 15.2% and 17.3% of the consolidated revenue, respectively (2021 Q4 and 12M: 15.0% and 17.0%). The growth came mainly from the increase in the sales volume of substations and cable distribution cabinets.

In the reporting quarter, revenue from the Finnish market was 18.7% more than the year before, totaling 21.3 million euros. In 2022, with 81.8 (2021: 70.9) million euros earned, the Finnish market grew the most in monetary value compared to the main markets. In the reporting quarter, 42.5% (2021 Q4: 41.1%) and within the reporting year 46.7% (2021: 46.4%) of Harju Elekter products and services were sold to the Group’s largest market.

Sales to the Swedish market decreased by 31.8% compared to the reporting quarters and by 17.3% compared to twelve months, being 7.0 and 22.8 million euros, respectively. The benchmark for the Swedish market was high, as the Swedish subsidiary had more projects underway than usual in the local market in the same period last year. Sweden accounted 14.2% (2021 Q4: 23.8%) of the consolidated revenue of the reporting quarter and 13.0% (2021: 18.1%) of the year 2022 revenue.

The fourth quarter’s revenue from the Norwegian market doubled compared to the previous year, amounting to 8.9 (2021 Q4: 4.2) million euros. The revenue earned in 2022 from the Norwegian market was 21.8 million euros, which is 65.4% more than the previous year. The increase in revenue in both periods is due to the low order volume of the shipping sector in the comparison period. The Norwegian market accounted for 17.8% (2021 Q4: 9.7%) of the consolidated revenue of the reporting quarter and 12.4% (2021: 8.6%) of the annual revenue.

Investments

The value of the Group’s non-current financial investments totalled 23.7 (31.12.21: 25.2) million euros as of the reporting date. Harju Elekter increased its holding in the technology company IGL-Technologies Oy from 5.5% to 10% by 0.2 million euros and sold a 14% holding in SIA Energokomplekss, to focus on its core business.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.01 euros. As of 31 December 2022, AS Harju Elekter had 10,584 shareholders. The number of shareholders increased during the reporting quarter by 417.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR ‘000 31.12.2022 31.12.2021
ASSETS
Current assets
Cash and cash equivalents 9,152 574
Trade and other receivables 31,612 33,689
Prepayments 1,126 1,844
Inventories 37,068 27,437
Total current assets 79,958 63,544
Non-current assets
Deferred income tax assets 1,008 690
Non-current financial investments 23,731 25,222
Investment properties 24,756 23,903
Property, plant and equipment 35,740 26,654
Intangible assets 7,244 7,544
Total non-current assets 92,479 84,013
TOTAL ASSETS 171,437 147,557
LIABILITIES AND EQUITY
Liabilities
Borrowings 24,385 16,912
Prepayments from customers 16,827 4,659
Trade and other payables 24,502 24,490
Tax liabilities 3,478 3,156
Current provisions 2,103 35
Total current liabilities 71,295 49,252
Borrowings 20,732 11,426
Other non-current liabilities 0 33
Total non-current liabilities 20,732 11,459
TOTAL LIABILITIES 92,027 60,711
Equity
Share capital 11,523 11,352
Share premium 2,509 1,601
Reserves 17,768 18,716
Retained earnings 47,771 55,315
Total equity attributable to the owners of the parent company 79,571 86,984
Non-controlling interests -161 -138
Total equity 79,410 86,846
TOTAL LIABILITIES AND EQUITY 171,437 147,557

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS    
Unaudited
EUR ‘000 Q4 Q4 12M 12M
2022 2021 2022 2021
Revenue 49,978 43,561 175,293 152,757
Cost of sales -47,461 -38,858 -163,024 -134,877
Gross profit 2,517 4,703 12,269 17,880
Distribution costs – 1,449 – 1,260 -5,578 -5,259
Administrative expenses -3,037 -2,655 -11,194 -9,703
Other income 9 114 351 513
Other expenses -103 -49 -394 -229
Operating profit/loss (-) -2,063 853 -4,546 3,202
Finance income 48 57 122 129
Finance costs -476 -101 -853 -353
Profit/loss (-) before tax -2,491 809 -5,277 2,978
Income tax 9 85 -290 -368
Profit/loss (-) for the period -2,482 894 -5,567 2,610
Profit /loss (-) attributable to:
    Owners of the parent company -2,520 888 -5,544 2,598
    Non-controlling interests 38 6 -23 12
Earnings per share    
   Basic earnings per share (euros) -0.14 0.05 -0.31 0.15
   Diluted earnings per share (euros) -0.14 0.05 -0.30 0.14

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
Unaudited
EUR ‘000 Q4 Q4 12M 12M
2022 2021 2022 2021
Profit/loss (-) for the period -2,482 894 -5,567 2,610
Other comprehensive income
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries -47 -44 -208 -57
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 320 265
   Net gain/loss (-) on revaluation of financial assets 20 3,900 -726 12,269
Total comprehensive income for the period -27 3,856 -614 12,477
Other comprehensive income -2,509 4,750 -6,181 15,087
Total comprehensive income attributable to:
    Owners of the Company -2,547 4,744 -6,158 15,075
    Non-controlling interests 38 6 -23 12

Tiit Atso
Chairman of the Board
+372 674 7400

Interim Report of Harju Elekter Q4 2022

Harju Elekter signed a construction contract for a production building in the Allika Industrial Park

AS Harju Elekter announced in a stock exchange announcement on 8 June 2022 that they were planning to build a new production building in the Allika Industrial Park. To this end, AS Harju Elekter and Nordecon Betoon OÜ (brand name NOBE) signed a construction contract for a production and office building at Angerja tee, Hüüru. Together with the construction cost of the building, the total real estate investment will amount to 5 million euros, and the works will be completed in December 2023.

Nordecon Betoon OÜ is a company of Nordecon Group. Nordecon is a group of construction companies whose core business is construction project management and general contracting in the buildings and infrastructures segment. Geographically the Group operates in Estonia, Finland, Ukraine and Sweden. The parent of the Group is Nordecon AS, a company registered and located in Tallinn, Estonia. The consolidated revenue of the Group in 2021 was 289 million euros. Currently Nordecon Group employs close to 670 people.

The real estate unit of Harju Elekter Group is engaged in the development of industrial real estate, project management, leasing, and related services for both rental partners and Harju Elekter’s own companies. The real estate unit manages a total of nine industrial parks in Estonia, Finland, Sweden, and Lithuania.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Aron Kuhi-Thalfeldt
Real Estate Department Manager/Member of the Management Board
+372 5171448

Changes in the Management Board of Harju Elekter AB

AS Harju Elekter has decided, by agreement between the parties, to terminate the contract with Harju Elekter AB’s Managing Director Mikael Shwartz Jonsson. Mikael Jonsson will continue as Managing Director until 28 February 2023, after which Martin Frank will take over as acting director.

Martin Frank has worked as the Head of Marketing and Sales at Harju Elekter AB since 2021. Before that, he worked in various leadership positions at ABB, Hitachi Energy and Westinghouse Electric Company. He holds a master’s degree in engineering from Lund University and an MBA from Uppsala University. He does not own Harju Elekter shares.

The search to find a new Managing Director for Harju Elekter AB begins now with a plan to fill the position within six months.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Harju Elekter signed an agreement with a major data centre operator in Sweden

The Harju Elekter Group’s Swedish subsidiary Harju Elekter AB signed an agreement with one of Sweden’s leading data centre operators, atNorth which is expanding their data centre in Sweden with the addition of several new server halls. According to the agreement Harju Elekter will deliver and install transformers and switchgear for electrical power distribution for the new server halls of the atNorth data centre during 2023. The total volume of the agreement is about 2.7 million euros.

atNorth is a leading Pan-Nordic data centre services company that offers sustainable, cost-effective, and scalable colocation and high-performance computing services across Iceland, Sweden and Finland. The company operates five data centres in strategic locations across the Nordics and is trusted by industry-leading organizations to operate their most critical workloads.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Mikael Schwartz Jonsson
Managing Director of Harju Elekter AB
+46 73 870 01 51

AS Harju Elekter entered into a loan agreement with Coop Pank AS

On 28 December 2022, AS Harju Elekter and Coop Pank AS entered into a loan agreement in the amount of 10 million euros. The term of the investment loan with a variable interest rate based on Euribor is five years. The loan taken will be used to finance the construction costs of the Västerås plant, which was completed in Sweden, the development of a new real estate project and, if necessary, to reduce existing short-term financial obligations. The loan is secured by a mortgage of first ranking on the Harju Elekter property located at Paldiski mnt 31, Keila.

Harju Elekter’s cooperation with Coop Pank AS, which is based on Estonian capital, helps to strengthen the company’s capitalisation and creates the necessary prerequisites for the realisation of Harju Elekter’s growth strategy.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Priit Treial
Member of the Management Board / Chief Financial Officer
+372 674 7400

Harju Elekter concluded an agreement in Sweden for the renewal of the distribution substation

On 21 December 2022, Harju Elekter Group’s Swedish subsidiary Harju Elekter AB signed an agreement with Gävle Energi AB, for the upgrade of the distribution substation in Gävle with accompanying rebuilding and civil works of the project by February 2024. The total volume of the agreement is 1.6 million euros. This is yet another larger substation project for Harju Elekter AB in Sweden. Once completed, the station will contribute to meeting the need for electrical power, both for industrial and residential users.

Gävle Energi AB is an energy company in the Gävle region, 170 km north of Stockholm, offering energy services, district heating and cooling.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Mikael Schwartz Jonsson, Managing Director of Harju Elekter AB, +46 73 870 01 51

Publication of Financial Reports in 2023

AS Harju Elekter wishes to the shareholders Happy Holidays and informs that in the year 2023, the consolidated financial results of AS Harju Elekter will be published as following:

2022 Q4 results 22 February 2023
2023 Q1 results 26 April 2023
2023 Q2 results 26 July 2023
2023 Q3 results 25 October 2023

The Annual General Meeting will be held on 28 April 2023.

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.com.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 53408444
marit.tack@harjuelekter.com

Harju Elekter acquired a real estate company and is reorganising production in Sweden

On 5 October 2021, AS Harju Elekter published a stock exchange release in which it announced that Harju Elekter AB, a subsidiary of AS Harju Elekter, concluded an agreement with LC Development Fastigheter 101 AB, a subsidiary of Wästbygg Gruppen AB, in order to acquire 100% of the shares of LC Development Fastigheter 17 AB. Harju Elekter decided to acquire the real estate company under Harju Elekter Services AB instead of Harju Elekter AB, and on December 15, 2022, Harju Elekter Services AB completed the transaction to acquire 100% of the shares of LC Development Fastigheter 17 AB.

The purchased real estate company LC Development Fastigheter 17 AB was created specifically for the construction of the Västerås factory, where the production needs of Harju Elekter were taken into account in the construction process. In the future, it is planned to merge the purchased company with Harju Elekter Services AB, which results from the Group’s principle of keeping production activities and real estate management in separate companies. Aron Kuhi-Thalfeldt (chairman), Tiit Atso, Priit Treial, Tiit Luman and Erko Lepa were appointed to the purchased company’s Board and Mikael Schwartz Jonsson (Managing Director of Harju Elekter AB) was appointed as Managing Director. The price of the transaction was 10.5 million euros (SEK 115 million).

The stock exchange release of AS Harju Elekter, published on 13 September 2021, announced that for leasing the building in Malmö, which will be completed by the end of 2022, a lease agreement was entered into with Nyfosa AB. As Nyfosa AB was unable to obtain a building permit for the construction of the building and no suitable rental premises could be found in Malmö, AS Harju Elekter decided to move production from Malmö to the Group’s newly built factory in Västerås and to the existing production unit in Keila in the first half of 2023 for the purpose of cost efficiency.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Rait Kangro: “Harju Elekter is a people’s company“

“I think I received the inspiration from my family, as my father is involved in the electrical field and that’s probably why it started to interest me. Even though I was not a big dreamer as a child and probably did not dream of the work I do today, the field is very good and I am really satisfied here,” describes Rait Kangro, who is currently working as the Head of Sales and Marketing of Harju Elekter Estonia.

Rait previously worked as a sales engineer in a small company. “At some point, I started to think about taking on the next challenge,” says Rait. At exactly the right moment, he received a call with the proposition to come to Harju Elekter as a sales manager for low-voltage products. After a round of interviews, he accepted the offer. While talking about it, Rait also recalls his student years at TalTech, when he went on an excursion to the Harju Elekter production as part of his studies: “As a student, I had briefly heard about the company and had also seen Harju Elekter’s products on the street, but at that time I would not have thought that my career path would really lead here.”

“In the role of sales manager, I primarily dealt with Finnish, Swedish and Estonian customers. I gradually settled in and tried to participate in as many activities as possible to obtain a more complete picture of the company. For example, I signed up as an internal auditor, a role in which I was able to examine various company processes as part of the internal audit,” describes Rait. Today, he is working as a Head of Sales and Marketing of Harju Elekter’s factories in Estonia. He has a dream team who helps him to accomplish great things. “Yes, 4 years in Harju Elekter does not sound like much, but time has gone incredibly fast and so much has happened. There are always many changes in a developing company, but I’m not against changes!”, says Rait enthusiastically.

Rait has a lot to say when he is asked why he chose Harju Elekter as an employer. “Harju Elekter is a people’s company. We have an incredibly strong team of people who are very helpful and friendly and stick together. When I first joined the team, I received a very warm welcome which has been preserved to this day,” he says. “I came from a small company with seven employees, whereas in Harju Elekter Estonia there are almost three hundred. At first, I assumed that the pyramid was in place, but I was wrong. In fact, the organisation works laterally and there is no redundant bureaucracy,” Rait describes. In addition, as an engineer-minded person, he likes that Harju Elekter is a production company. “We work with physical products, so everything that a salesperson sells and that an engineer designs, can be touched.”

Rait adds that Harju Elekter has a sufficiently flexible atmosphere in terms of career path. “The field of activity is large and there are enough challenges. Even if you are employed in one position, the tasks arising from the role may not always be set in stone. There are always career opportunities for good people and we have several stories where employees have been able to shape their role within the company or move to a different position,” says Rait about the opportunities, which have also been confirmed by his own experiences.

He does not deny that there have been slip-ups and obstacles alongside his career development and successes during the years of work. “However, if you do not have experience in certain topics, the support system is always there. People around will help and support you to find solutions. In addition, we do not make any product as an individual, but rather as a team. That’s why I always encourage my colleagues to voice their concerns. No one is alone with their concerns – together we can find solutions,” he explains.


„We do not make any product as a solo, but as a team. That’s why I always encourage my colleagues to talk about their concerns. There is no one alone with their concerns – together we can find solutions.” 


„We do not make any product as a solo, but as a team. That’s why I always encourage my colleagues to talk about their concerns. There is no one alone with their concerns – together we can find solutions.“

To Harju Elekter’s new tagline “Electrifying Tomorrow”, Rait says that he is happy about the message: “We are strong in our field, we invest in sustainable solutions and we keep up with time and technology. The forward-looking tagline describes very well the activities we are already doing today and the values ​​we live by at Harju Elekter.”


„The forward-looking tagline descirbes very well the activites we are already doing today and the values we live by at Harju Elekter.” 


Rait adds that the forward-looking tagline is versatile: “Firstly, all new procurements and requirements arising from the field of electricity are today in the place where we must to go along with sustainability topic, there is no other option. On the other hand, it describes our contribution to the next generation – how we cultivate technical interest in young people and involve talented engineers in Harju Elekter.”

Jani Leino: “One of the big reasons why it’s nice to work here is the good colleagues and a good team spirit”

Let’s continue to introduce the career stories of our good employees. Jani works at Harju Elekter Finland, in the contract manufacturing team, and manufactures electrical cabinets. Jani’s career path in production began over twenty years ago. His career in the electrical industry took him by surprise, but he says that he likes working in the industry and the choice has felt right. Thanks to the interesting and versatile work tasks and good team spirit, Jani says that he enjoys working at Harju Elekter.

Jani works at Harju Elekter in the production contract manufacturing team and manufactures electrical cabinets. He began just over twenty years ago when Harju Elekter Finland was still operating under the Satmatic name. ”While at my former job, I heard that there were vacancies available at Satmatic and was recommended to contact them. I called them and got a position. In addition to myself, a couple of my other colleagues started working here too.” Jani got a permanent job after three months of working and says that he has enjoyed working at Harju Elekter from the start.

In his work, Jani says that he especially likes the flexible working hours and working the day shift. Jani also says that the manufacture of electrical cabinets is interesting and varied. ‘’I enjoy my job, and making electrical cabinets is fascinating as the cabinets are always slightly different. Over the years, it has been great to get involved in big projects and manufacture cabinets for new customers”, says Jani. Jani’s colleagues also deserve a special mention. ”One of the big reasons why it’s nice to work here and why I have enjoyed working here for a long time is the good colleagues and a good team spirit. We have about 15 people in the contract manufacturing team and some new colleagues have just joined the team”, says Jani.

Jani mentions that the most memorable moments of his career are when the work has been done well and there has been good feedback from customers.

Jani mentions that Harju Elekter’s new tagline, ”Electrifying Tomorrow”, is a good illustration of how the world is electrifying fast. “We have been pioneers in the Finnish market for a long time, and the quality and durability of solutions are very important. It’s important to make good, durable, and sustainable products for customers,” says Jani, explaining the meaning of the tagline from his point of view.

Looking back on his childhood, Jani says that, even in middle school, he didn’t have a specific dream job. ”I’ve always been interested in information technology, so I applied to study it back in the day. At the time, the electrical industry was my second option, however, the information technology program was not opened, so I ended up studying the electrical industry. I’ve enjoyed working in the industry and I have never felt like I’ve made the wrong choice,” Jani says.

Jani says that he has spent his free time in competitive dance for years, practising for 23 years. ”Nowadays I don’t have an active hobby like I had when I was younger, but I regularly go to the gym and play disc golf. I also like to spend time in nature and go hiking in the forest.”, Jani says.


„“We have been pioneers in the Finnish market for a long time, and the quality and durability of solutions are very important. It’s important to make good, durable, and sustainable products for customers.”


 

 

Read other career stories:

Erki Suurküla: “Harju Elekter is like a big ship – the direction and tasks of the team are now firmly in place”

To become an electrician in a year is a mission possible

Rait Kangro: “Harju Elekter is a people’s company“

Engineering internship experience in Harju Elekter

Changes in the Boards of AS Harju Elekter’s subsidiaries

In connection with the change in the management structure of the Group, it has been decided to harmonise the memberships of the Boards of AS Harju Elekter’s subsidiaries. With effect from 30 November 2022, the following members were removed from the Boards of the subsidiaries:

  • AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika – Endel Palla and Tarmo Kikas.
  • Harju Elekter UAB – Andres Allikmäe, Andres Toome, Jan Osa, and Tomas Prūsas.
  • Harju Elekter OY – Endel Palla, Andres Allikmäe, Jan Osa, and Simo Puustelli.
  • Telesilta OY – Andres Allikmäe, Jan Osa, Simo Puustelli, and Pertti Vuorinen.
  • Harju Elekter Kiinteistöt OY – Andres Allikmäe.
  • Harju Elekter AB – Andres Allikmäe and Mikael Schwartz Jonsson.
  • Harju Elekter Services AB – Andres Allikmäe, Andres Toome, Andres Olt, and Mikael Schwartz Jonsson.

Priit Treial (Member of the Management Board and CFO of AS Harju Elekter), Aron Kuhi-Thalfeldt (Member of the Management Board and Head of Real Estate of AS Harju Elekter), Tiit Luman, and Erko Lepa were elected as new members of the Board of said subsidiaries as of 1 December 2022.

Tiit Luman (born 1986) is responsible for marketing, product, and sales management in Harju Elekter Group. Tiit Luman has worked at Harju Elekter since 2008 as Sales Director and Head of Strategic Partnership. He holds a Master’s degree in Business Finance and Electrical Power Engineering from Tallinn University of Technology. Tiit Luman does not own shares in AS Harju Elekter.

Erko Lepa (born 1981) is responsible for production and strategic purchasing in Harju Elekter Group. Erko Lepa joined Harju Elekter in autumn 2021. Previously, he has worked at ABB in various positions starting as a product development engineer and ending as a transformation lead responsible for the global transformation of ABB’s motor and generator business. He holds a Master’s degree in Electric Drives and Power Electronics from Tallinn University of Technology. Erko Lepa is a shareholder and member of the Management Board of LepaTec OÜ. Erko Lepa owns 1 share in AS Harju Elekter.

Following the implementation of the changes, the Boards of the subsidiaries will continue with 5 members: Tiit Atso, Priit Treial, Aron Kuhi-Thalfeldt, Tiit Luman, and Erko Lepa.  The term of office of a member of the Board of the Estonian subsidiaries is 5 years and the term of office of a member of the Board of Finland, Sweden, and Lithuania is unlimited.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Erki Suurküla: “Harju Elekter is like a big ship – the direction and tasks of the team are now firmly in place”

Erki, a mechanical engineer of Harju Elekter, has been familiar with machines since he was a child, and connecting his career to the field of engineering was a completely logical step. His career path is interesting because he once left the company to gain experience outside of Harju Elekter and then returned. So far, he is satisfied with his decision.

As a young student, Erki gained good experience as a quality engineer in an Estonian company. “However, at one point I heard from my classmate that Harju Elekter was looking for engineers. At first, I wondered how I would manage to work at Keila and at the same time study product development at the Tallinn University of Technology. At first, I turned down the opportunity, but remained interested in the position,” says Erki. It happened so effortlessly, that Erki still came to Harju Elekter for an interview and all the conditions happened to suit both parties. In November 2003, he started working at Harju Elekter, together with the same classmate who initially told him about the opportunity.

In the first stage of his employment, from 2003 to 2012, while working at Harju Elekter, he gained excellent production technology experience and participated in challenging projects. “Mechanical design is mostly done at the computer, and engineers don’t delve into metal production too often. Also, production feedback often does not reach the engineer. In Harju Elekter things are different, and this is undoubtedly a huge advantage,” explains Erki. He was also able to have a say in the process developments of the product development department.

What followed was a period of nearly six years in which Erki worked on another front and gained both life and projection experience. This time included the opportunity to work in several small mechanical engineering companies and gain work experience in the design of science center exhibitions. Among other things, you will find several exhibits designed by Erki, for example, in the Energy Discovery Center. “At one point I realised that a large company like Harju Elekter was the best choice for me,” says Erki. “Small businesses depend mostly on outside aspects, which creates uncertainty. Harju Elekter is like a big ship – the direction and tasks of the team are firmly in place. That’s what brought me back here,” he adds.


„Harju Elekter is like a big ship – the direction and tasks of the team are firmly in place. That’s what brought me back here.”


When he came back to Harju Elekter, he knew what was waiting for him – the work and the people were already familiar. “At Harju Elekter, I mostly enjoy the series production process. You design, go into production, evaluate and make corrections, and then you see how the product is improved. You see the life map of the product within the company and there is always room for improvement with products,” he declared. “And the people at Harju Elekter have always been a good team with an enjoyable internal atmosphere. People get along well and there is good communication between units,” says Erki.

Erki is a team member who is always ready to share his ideas and thoughts. He doesn’t just stick to the boundaries of his role but looks at the bigger picture. For example, he supports the workflow of mechanical engineers in-house and contributes to designing software and tools. Erki himself says that he appreciates being intelligent, but according to him, he is not the type to be a leader. “I enjoy this role, where I can perform as a specialist and make my voice heard on important topics,” he added.

What does Harju Elekter’s new slogan “Electrifying Tomorrow” mean for Erki? He says it is good that the word electrifying can be understood in many different ways. “I believe that many people today are wondering what tomorrow’s electrification will look like. I see that Harju Elekter has established itself in this energy chain to a significant extent,” he claims. Erki adds that it is only pleasurable as an employee of Harju Elekter if there is a demand for our products. “Speaking of tomorrow, I’m looking forward to when a good solution will be found for the efficient use of heat losses,” he adds.

To become an electrician in a year is a mission possible

Harju Elekter Lithuania, located in Panevėžys, is one of the largest and most reputable companies in the region. The company provides detail engineering, contract manufacturing and full load testing services for marine and industrial system integrators.
Local residents see the company as a reliable employer and they know very well that in order to get a job in this company, it is not necessary to have the profession of electrician – it can be acquired while working and on the same time studying at the company’s academy, which the company has been successfully running for several years together with the Visaginas Technology and Business Vocational Training Center. Last year the company hired more than 70 new employees.

From a beautician to an electrician

Ieva Malinauskaitė, who took the opportunity to participate in this vocational training program, is great proof that in just one year it is possible to acquire new skills that she did not have before. Currently, she works as a Quality Control Engineer. Before starting her new career, the 29-year-old Ieva graduated as a beauty therapist-cosmetologist from Vilnius College. Ieva says that for a while it seemed like a dream come true, but later doubts began to plague her. “I worked for one company all those years. When I saw that I was no longer improving and no longer had anything to strive for, I started looking for another job. I accidentally found Harju Elekter’s job ad. Electrotechnics was unknown for me, I only had knowledge from school, but after some consideration, I decided to completely change my life and learn new skills,” said Ieva.

Electrifying Tomorrow at Harju Elekter

Ieva said that many things helped her to decide, including a higher salary and a team. “I had heard good reviews about the company. After starting working here, I can only confirm this myself,” she said. “At first it was not a job directly related to electricity. I assisted the quality controllers in checking the products,” Ieva added. While working, she became more interested in the work of controllers. “I saw how my colleagues read diagrams, how they work with various devices, check the electrical circuit and I became more interested. I started asking the controllers to teach me: explain what the devices do, how they work, etc. I would say that curiosity led me to where I am now,” Ieva said.

During that time she saw the employer’s announcement about the vocational training program and the opportunity to acquire the profession of electrician at the Visaginas Technology and Business Vocational Training Center. Without hesitation, I signed up for the training, which appeared to start at the perfect time for me.” Ieva said that at first she was frightened by the fact that she did not have any knowledge related to electricity. “There were a lot of new things and some of them were difficult to understand. But the teachers were great! I could turn to them at any moment and get answers to my questions. Although the field was completely different from what I had previously learned, I soon got into it,” Ieva said. At the vocational training center, she received new knowledge, from the basics of electricity to more specific academic knowledge that was required for work. The processes related to practice were well supervised and coordinated by the masters working in the company.

Ieva also emphasized that her relatives supported her on this journey: “At first they were a little surprised, why electricity?” But they always supported and encouraged me to move forward.”

Currently, she has been working in the company for three years. She finished her studies in the previous summer and acquired the profession of electrician. When asked about her future plans, she said that there are still enough challenges for her in this job. But that’s what she really likes.


„At first they were a little surprised, why electricity?” But they always supported and encouraged me to move forward.


“Physics is a science that you have to study every day and my work is far from being monotonous. Now I work as a Quality Controller, which means that I can work with electricity and read electrical diagrams. I still have many questions and I think there won’t be fewer of them in the future, so I will have to improve and learn,” she assured. The specifics of the company’s activities also provide a dynamic and development-friendly environment: the company, which creates the highest category of electrical products, works on the basis of project specific orders. Therefore, employees need to constantly improve their competence and update their knowledge – with tomorrow in mind.

The Term of Office Extension of Members of the Management Board

The Supervisory Board of AS Harju Elekter has extended the term of office of members of the Management Board Mr. Tiit Atso and Mr. Aron Kuhi-Thalfeldt, for a new 3-year term, until 31 October 2025. Tiit Atso will continue as the Chairman of the Management Board.

From 14 November 2022 the Management Board of AS Harju Elekter will continue with three members, when Mr. Priit Treial, Chief Financial Officer will join the Management Board.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s nine-month revenue in 2022 was 125.3 million euros.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Harju Elekter Group financial results, 1-9/2022

Harju Elekter’s results in the third quarter gave reason to rejoice for a moment, as the Group achieved record revenue with its main activity and improved its profitability. In today’s unstable environment, it is difficult to predict the future and the continuation of profitability, but the positive thing is that Harju Elekter has a record number of orders from customers. We are working every day to raise prices, solve supply problems, and prepare for new framework procurements.

The increase in the revenue of Harju Elekter is due to the increased fulfilment of orders, but also due to successful price negotiations with several international customers. For example, in the framework procurements for substation supplies in Finland and Sweden, customers have been accommodating price corrections and have understood that the sustainability of the supplier is also the customer’s concern. The profitability of the third quarter has been improved by price negotiations in previous quarters, and unprofitable contracts being recognised as expenses.

The Group organises management, structure and has set a focus on efficient production. In the structure of the Group’s companies, it was decided to proceed with the implementation of changes on the principle of ‘one property, one manufacturing enterprise’ to increase efficiency. Based on this, the production companies operating in Keila, AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, will be merged. During the past quarter, we formed a strong and experienced Group Management Team for managing centrally the Group’s core functions. To increase the Group’s profitability, we will keep the focus on our core business – the design, production, and installation of sustainable electrical power distribution solutions – and continue to exit non-core businesses and areas of activity. In this regard, a number of difficult decisions are ahead for the Group.

Revenue and Financial Results

The consolidated revenue for the third quarter and the first nine months of 2022 was the highest in history for Harju Elekter. Revenue was 46.1 (Q3 2021: 42.2) million euros in the reporting quarter and 125.3 (9M 2021: 109.2) million euros in the nine months. In the comparison of both periods, revenue increased in the areas of activity of manufacturing companies and the real estate sector. Manufacturing and sales of electrical equipment accounted for the majority of the increase, rising by 3.7 million euros in the quarter comparison and 13.5 million euros in the nine-month comparison.

EUR’000   Q3 Q3 +/- 9M 9M +/-
    2022 2021   2022 2021  
Revenue 46,081 42,168 9.3% 125,315 109,195 14.8%
Gross profit 5,803 5,026 15.5% 9,751 13,177 -26.0%
EBITDA 3,182 2,158 47.5% 1,161 5,281 -78.0%
Operating profit/loss (-) (EBIT) 1,691 1,183 42.9% -2,482 2,350 -205.6%
Profit/loss (-) for the period 1,406 931 51.0% -3,085 1,716 -279.8%
 Incl. attributable to owners of the parent company 1,493 915 63.2% -3,024 1,710 -276.8%
Earnings per share (EPS) (euros) 0.08 0.05 60.0% -0.17 0.10 -270.0%

Distribution costs decreased by 0.2 million to 1.3 million euros quarter-on-quarter, making up 2.9% of the Group’s operating expenses and 2.7% of revenue. Administrative expenses increased by 0.3 million euros to 2.7 million euros quarter-on-quarter, accounting for 6.2% of the Group’s operating expenses and 5.9% of revenue. The total distribution costs for the nine months were 4.1 (9M 2021: 4.0) and administrative expenses were 8.2 (9M 2021: 7.0) million euros.

In a quarterly comparison, labour costs increased by 1.8%, amounting to 7.5 million euros. In the nine-month comparison, labour costs increased by 3.0 million, being 25.3 million euros. A majority of the growth in labour costs and average wages was attributed to the significant increase in staff and wage pressure due to labour shortages in all markets.

The gross profit for the Q3 was 5,803 (Q3 2021: 5,026) thousand euros and the gross profit margin was 12.6% (Q3 2021: 11.9%). The consolidated operating profit (EBIT) was 1,691 (Q3 2021: 1,183) thousand euros. The operating margin for the third quarter was 3.7% (Q3 2021: 2.8%). The net profit for the Q3 was 1,406 (Q3 2021: 931) thousand euros of which the share of the owners of the parent company was 1,493 (Q3 2021: 915) thousand euros. The earnings per share were 0.08 euros (Q3 2021: 0.05) in the third quarter. Price negotiations conducted in previous quarters and unprofitable contracts being recognised as expenses have significantly improved the profitability of the quarter. The Group continues to focus on improving profitability. The gross profit for the nine months was 9,751 (9M 2021: 13,177) thousand euros and the gross profit margin was 7.8% (9M 2021: 12.1%). During the nine months, the operating loss (EBIT) was -2,482 (9M 2021: operating profit 2,350) thousand euros. In total, the Group’s net loss for the nine months was -3,085 (9M 2021: net profit 1,716) thousand euros and earnings per share were -0.17 (9M 2021: 0.1) euros.

Potential Liabilities

The dispute between Energo Veritas OÜ and Enefit Connect OÜ may lead to a liquidity crisis for the subsidiary, which is why Energo Veritas might not be able to meet its obligations within a reasonable time or in full. This necessitates the write-down of the loan claims of the parent company of the Group in the amount of 2.5 million euros and the Group’s investment of 1.0 million euros in the subsidiary. In the reporting quarter, the Group wrote down Energo Veritas OÜ’s goodwill in the amount of 0.4 million euros. The potential or the realised cost will have no effect on cash flow.

Core Business and Markets

The Group’s core business, production, accounted for 89.3% of the Group’s consolidated revenue of the reporting quarter and 88.8% of the nine months. The revenue of the production segment increased by 11.4% in the reporting quarter and by 16.2% in nine months, being 41.2 and 111.3 million euros, respectively.

In the third quarter revenue to the Estonian market was 8.9 (Q3 2021: 7.5) and in nine months 22.7 (9M 2021: 19.5) million euros, making up 19.3% and 18.1% (Q3 and 9M 2021: 17.8%) of the consolidated revenue, respectively. The growth mainly came from the increase in the sales volume of substations, cable distribution cabinets and solar panel systems.

In the reporting quarter, revenue in Finland was 1.8 million euros more than the year before, a total of 21.8 million euros. In nine months, 60.6 (9M 2021: 53.0) million euros were earned from the Finnish market. The majority of the increase in revenue came from the sale of substations to Finnish electricity network companies, the growth in the volume of car heating and charging equipment, and solar panel systems. The lower-than-usual revenue in the same period of previous year were mainly affected by a decrease in orders due to the snowy and cold winter, the start of new long-term orders, as well as some supply constraints and material shortages. In the reporting quarter, 47.3% (Q3 2021: 47.5%) and within nine months 48.3% (9M 2021: 48.6%) of Harju Elekter products and services were sold to the Group’s largest market.

Sales to the Swedish market increased by 11.7% compared to the reporting quarters but decreased by 8.5% compared to nine months, being 6.4 and 15.8 million euros, respectively. The nine-month benchmark for the Swedish market was high, as the Swedish subsidiary had more projects underway than usual in the local market in the same period last year. Sweden accounted 14.0% (Q3 2021: 13.7%) of the consolidated revenue of the reporting quarter and 12.6% (9M 2021: 15.8%) of the nine-month revenue.

During the reporting quarter 5.5 (Q3 2021: 5.1) million euros worth of Group products and services were sold on the Norwegian market. The revenue earned from the Norwegian market in nine months was 12.9 million euros, which was 44% more than in the same period of the previous year. Revenue increases in both periods are due to low order volume in the comparison periods. The Norwegian market accounted for 12.0% (Q3 2021: 12.1%) of the quarter’s revenue and 10.3% (9M 2021: 8.2%) of the nine-month revenue.

Investments

During the reporting period, the Group invested a total of 3.1 (9M 2021: 5.0) million euros in non-current assets, incl 1.6 (9M 2021: 0.5) million euros in investment properties, 1.1 (9M 2021: 4.0) million euros in property, plant, and equipment and 0.4 (9M 2021: 0.5) million euros in intangible assets. Most of the investments during the reporting period were directed to the construction of the Laohotell III production and warehouse complex, in the Allika Industrial Park, which today is filled with tenants. In addition, investments were made in production technology equipment, production and process management systems, renovated buildings and plot of land was acquired in Finland.

The value of the Group’s non-current financial investments totalled 23.7 (31.12.21: 25.2) million euros as of the reporting date. Harju Elekter increased its stake in the technology company IGL-Technologies Oy from 5.5% to 10% by 0.2 million euros and sold a 14% holding in SIA Energokomplekss, to focus on its core business. A total of 1.3 (9M 2021: 1.0) million euros was received from the SIA Energokomplekss and partial sale of listed securities, of which the realised profit was 0.32 (9M 2021: 0.27) million euros. The fair value of securities decreased by 0.7 million euros in nine months, compared to a year earlier it increased by 0.4 million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.05 euros. As of 30 September 2022, AS Harju Elekter had 10,167 shareholders. The number of shareholders increased during the reporting quarter by 325.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 30.09.2022 31.12.2021 30.09.2021
ASSETS
Current assets
Cash and cash equivalents 504 574 997
Trade and other receivables 34,069 33,689 32,467
Prepayments 1,497 1,844 1,601
Inventories 43,809 27,437 26,150
Total current assets 79,879 63,544 61,215
Non-current assets
Deferred income tax assets 756 690 572
Non-current financial investments 23,707 25,222 21,321
Investment properties 24,754 23,903 23,369
Property, plant and equipment 25,490 26,654 24,750
Intangible assets 7,372 7,544 7,467
Total non-current assets 82,079 84,013 77,479
TOTAL ASSETS 161,958 147,557 138,694
LIABILITIES AND EQUITY
Liabilities
Borrowings 20,667 16,912 12,585
Prepayments from customers 8,021 4,659 4,958
Trade and other payables 32,720 24,490 23,830
Tax liabilities 3,881 3,156 2,870
Current provisions 535 35 93
Total current liabilities 65,824 49,252 44,336
Borrowings 14,222 11,426 12,252
Other non-current liabilities 32 33 63
Total non-current liabilities 14,254 11,459 12,315
TOTAL LIABILITIES 80,078 60,711 56,651
Equity
Share capital 11,523 11,352 11,352
Share premium 2,509 1,601 1,601
Reserves 17,756 18,716 14,807
Retained earnings 50,291 55,315 54,427
Total equity attributable to the owners of the parent company 82,079 86,984 82,187
Non-controlling interests -199 -138 -144
Total equity 81,880 86,846 82,043
TOTAL LIABILITIES AND EQUITY 161,958 147,557 138,694

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS    
Unaudited
EUR’000 Q3 Q3 9M 9M
2022 2021 2022 2021
Revenue 46,081 42,168 125,315 109,195
Cost of sales -40,278 -37,142 -115,564 -96,018
Gross profit 5,803 5,026 9,751 13,177
Distribution costs -1,264 -1,469 -4,128 -3,999
Administrative expenses -2,728 -2,393 -8,157 -7,048
Other income 0 39 342 400
Other expenses -120 -20 -290 -180
Operating profit/loss (-) 1,691 1,183 -2,482 2,350
Finance income 0 3 74 71
Finance costs -146 -95 -377 -252
Profit/loss (-) before tax 1,545 1,091 -2,785 2,169
Income tax -139 -160 -300 -453
Profit/loss (-) for the period 1,406 931 -3,085 1,716
Profit /loss (-) attributable to:
    Owners of the parent company 1,493 915 -3,024 1,710
    Non-controlling interests -87 16 -61 6
Earnings per share    
   Basic earnings per share (euros) 0.08 0.05 -0.17 0.10
   Diluted earnings per share (euros) 0.08 0.05 -0.17 0.10

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
Unaudited
EUR’000 Q3 Q3 9M 9M
2022 2021 2022 2021
Profit/loss (-) for the period 1,406 931 -3,085 1,716
Other comprehensive income
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries -96 -8 -161 -13
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 320 265
   Net gain/loss (-) on revaluation of financial assets 112 49 -746 8,369
Total comprehensive income for the period 16 41 -587 8,621
Other comprehensive income 1,422 972 -3,672 10,337
Total comprehensive income attributable to:
    Owners of the Company 1,412 956 -3,708 10,331
    Non-controlling interests 10 16 36 6

The Interim Report of Harju Elekter Group for Q3 2022

Tiit Atso
Chairman of the Board
+372 674 7400

Head of the Tallinn Stock Exchange: Harju Elekter is the only company in Estonia that has paid dividends every year for 25 years in a row 

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.” 

Harju Elekter’s quarter of a century on the stock exchange also recognised in Times Square, New York

Today, 30 September, marks the 25the anniversary of the day when AS Harju Elekter went public in Tallinn. On the occasion of the anniversary, the company was congratulated on a screen in Times Square, New York.

During its early years, Harju Elekter was largely an Estonian-centric production company; however, the group has since become one of the largest electric power distribution solutions providers in the Nordic countries, actively contributing to a more sustainable society.

AS Harju Elekter was one of the first and one of the few Estonian companies to go public in the 1990s, and its life on the stock market has remained stable to this day. Most of the listed Estonian companies that started at the same time have since been delisted.

Tiit Atso, the Chairman of the Management Board at Harju Elekter, explained that by listing its shares on the stock exchange 25 years ago, Harju Elekter created the prerequisites for entering the international market and increased the credibility and growth prospects of the Estonian company.

“When we went public in 1997, the total value of the share capital was EEK 18 million, of which the value of one share was EEK 10. With the fund issue that took place in 2000, the then share capital was tripled. Since 2003, Harju Elekter has been on the main list of the Tallinn Stock Exchange,” Atso said.

Atso added that in 25 years on the stock exchange, the group has increased its turnover 22 times, and the company’s market value has increased almost 10 times.

“As of July 31 of this year, the share capital of AS Harju Elekter was EUR 11.5 million, consisting of 18.3 million ordinary shares. Harju Elekter has generally done well on the stock exchange and shares are actively traded. As of the second quarter of this year, the company had 9,842 shareholders,” Atso noted.

He stated that in the last five years, the number of shareholders has increased almost five-fold. More than 80% of Harju Elekter’s share ownership belongs to Estonian shareholders. “The large and stable number of shareholders shows that Harju Elekter occupies a reliable and secure place in investment portfolios. We are especially pleased that the company has been able to pay dividends to shareholders every year for the entire period listed on the stock exchange,” Atso emphasised.

Harju Elekter is an international industrial group with extensive experience in providing future proof solutions for electrical power distribution. We engineer, manufacture, and install electrification solutions for utilities, industries, infrastructure, plus public and commercial buildings. The entities of Harju Elekter Group in Estonia, Finland, Sweden, and Lithuania employ around 900 people, and the Group’s revenue for the first half of 2022 amounted to 79.2 million euros.

Intra-group restructuring and change in the Management Board of a subsidiary

In order to harmonise management and increase synergies, AS Harju Elekter will continue the internal restructuring started in 2020 and plans to merge its plants in Estonia, whereby the production of AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika will be merged into a single subsidiary. The merger of Harju Elekter Elektrotehnika and Harju Elekter Teletehnika will allow for significant savings in both production and labour costs, and for a gradual transition to a company based on the LEAN principles.

The assets, rights and obligations of AS Harju Elekter Teletehnika will be transferred in their entirety to AS Harju Elekter Elektrotehnika. The merging companies, Harju Elekter Elektrotehnika as the acquiring company and Harju Elekter Teletehnika as the company being acquired, are both wholly-owned subsidiaries of Harju Elekter. The procedures necessary for the merger to enter into force are expected to be completed during the first quarter of 2023. As a result of the merger, the company will continue to operate under the name of AS Harju Elekter Elektrotehnika.

Based on the above and in order to ensure the smooth functioning of the merger process, Harju Elekter has decided to recall Indrek Ulmas from his position on the Management Board of AS Harju Elekter Elektrotehnika as of 3 October 2022, and to elect Alvar Sass as a new member of the Management Board with term of office three years, until 2 October 2025. Until the merger of the subsidiaries is entered in the commercial register, Alvar Sass will act as the CEO of both Harju Elekter Elektrotehnika and Teletehnika.

Alvar Sass (born 1985) has been a Member of the Management Board of AS Harju Elekter Teletehnika since 2017. Participation in management bodies of companies: Member of the Management Board of Radius Space OÜ; Member of the Management Board of Vientitec OÜ; Member of the Management Board of Justin Time OÜ; Member of the Supervisory Board of the Harju Entrepreneurship and Development Centre Foundation. Alvar Sass owns 15,689 shares in Harju Elekter.

The Supervisory Board of AS Harju Elekter Elektrotehnika will continue in its current composition: Chairman Tiit Atso, Members Endel Palla and Tarmo Kikas.

Harju Elekter is an international industrial group with more than 50 years of experience in the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete packages for solar power plants, electric vehicle charging devices, and other related solutions. The Estonian, Finnish, Swedish, and Lithuanian factories employ around 900 people, and the Group’s revenue for the first half of 2022 was EUR 79.2 million. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board

+372 674 7400

Enefit Connect OÜ’s claim against the subsidiary of Harju Elekter

In its stock exchange release published on 20 May 2022, AS Harju Elekter announced the termination of the framework agreements for hermetic distribution transformers concluded by its subsidiary Energo Veritas OÜ with Enefit Connect OÜ and that Enefit Connect OÜ does not consider the cancellation of the framework contracts to be lawful.

On 20 September 2022, Enefit Connect OÜ filed a claim against Energo Veritas OÜ for a breach of the framework agreements for a total amount of 1,374,645.38 euros. The amount includes fines for delays, non-fulfilment of orders, and failure to ensure emergency reserves. In addition, Enefit Connect OÜ notified its intention to file a claim for an amount of 2,094,249 euros arising from the difference between the prices agreed in the framework agreements and the prices of the agreements awarded by Enefit Connect OÜ as a result of the dynamic procurement system. This is a loss for the future, as Enefit Connect OÜ has not yet made any payments in excess of the price stated in the framework agreement as of 20 September 2022.

Energo Veritas OÜ is of the opinion that the framework agreements have been cancelled and the framework agreements have been lawfully withdrawn from, and does not admit or concede the merits of the claim or the existence of an infringement.

Above mentioned financial claims may have a negative impact on the financial position of the group.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for the first six months 2022 was 79.2 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 6747400

Changes in management board of AS Harju Elekter

Supervisory board of AS Harju Elekter elected Mr Priit Treial as the new member of the board and chief financial officer of the company, taking office on 14 November 2022 and his term of office is three years.

Priit Treial has been a member of the board and chief financial officer of Elektrilevi OÜ since 2018, and a member of the council of Narva Soojus AS and Imatra Elekter AS since 2021. In 2016-2018, he worked as a financial controller at Eesti Energia AS. In addition, he has long-term work experience as an investment analyst and group business controller from the commercial real estate company BPT Real Estate AS. Priit received his bachelor’s degree in 2006 from the University of Tartu in economics.

Priit Treial is the sole shareholder and member of the board of PHT Chemicals OÜ. He does not own Harju Elekter shares.

Starting from 14 November 2022, the management board of AS Harju Elekter will continue with three members: chairman Tiit Atso, members Priit Treial and Aron Kuhi-Thalfeldt.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for the first six months 2022 was 79.2 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Board
+372 674 7400

Harju Elekter signed a contract with the European Organization for Nuclear Research

AS Harju Elekter Elektrotehnika, the Estonian manufacturing company of Harju Elekter Group, signed on 26 July 2022 a three-year contract with CERN, the European Organization for Nuclear Research, for the supply of low voltage switchgear for a total estimated volume over 1 million euros, with an option for a two-year extension.

For Harju Elekter, the contract provides an opportunity to collaborate innovatively with an international research organization and contribute to the development of research technology.

CERN, the European Organization for Nuclear Research, operates the world’s largest particle physics laboratory and the most powerful particle accelerator, the LHC. CERN’s main areas of research are elementary particle physics and nuclear physics. Founded in 1954, CERN has 33 Member and Associate Member states, including, since last year, Estonia.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for the first six months 2022 was 79.2 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

Harju Elekter Group financial results, 1-6/2022

In terms of profitability, the second quarter of 2022 turned out to be the most difficult in the history of Harju Elekter. Persistent supply chain problems, in particular in the form of rising material prices and shortages involving several components, affected the profitability. The Group was forced to critically reassess all ongoing works, agreements, and their potential profitability for the coming periods. In addition to the increase in production costs, several projects turned out to be more complex and unprofitable than originally planned, exacerbated by the inefficiencies arising from supply constraints and rising fees for skilled labour.

We have taken a number of steps to cope with the challenges posed by world events. We will continue to reorganise production to ensure efficiency in the face of disrupted supply chains. The relief obtained from framework contract price negotiations has not yet fully been reflected in second quarter results and is more likely to be seen in the second half of the year. On the positive side, the order book is covered for a long period, which is also characterised by continued growth in revenues. The green transition trend and the pressure to ramp up electrification continue to intensify, accelerating investment in electricity networks to ensure reliability and modernisation.

Financial Results

The consolidated revenue for the second quarter of 2022 was 41.9 (Q2 2021: 36.3) million euros, and the revenue for the first half of the year was 79.2 (6M 2021: 67.0) million euros. Comparing both periods, revenue increased in most business areas. Manufacturing and sales of electrical equipment accounted for the majority of the increase, rising by 4.9 million euros in the reporting quarter in yearly comparison and 9.8 million euros in the six-month comparison.

EUR’000   Q2 Q2 +/- 6M 6 M +/-
    2022 2021   2022 2021  
Revenue   41,914 36,310 15.4% 79,235 67,028 18.2%
Gross profit   963 4,306 -77.6% 3,949 8,151 -51.6%
EBITDA   -1,953 1,638 -219.2% -2,022 3,124 -164.7%
Operating profit/loss (-) (EBIT)   -3,048 651 -568.2% -4,174 1,168 -457.4%
Profit/loss (-) for the period   -3,197 488 -755.1% -4,491 785 -672.1%
 Incl. attributable to owners of the parent company   -3,209 485 -761.6% -4,517 795 -668.2%
Earnings per share (EPS) (euros)   -0.18 0.03 -700% -0.25 0.04 -725.0%

The gross profit for the Q2 was 963 (Q2 2021: 4,306) thousand euros and the gross profit margin was 2.3% (Q2 2021: 11.9%). The consolidated operating loss (EBIT) was -3,048 (Q2 2021: operating profit 651) thousand euros. The operating margin for the second quarter was -7.3% (Q2 2021: 1.8%). The net loss for the Q2 was -3,197 (Q2 2021: net profit 488) thousand euros of which the share of the owners of the parent company was -3,209 (Q2 2021: 485) thousand euros. The earnings per share were -0.18 euros (Q2 2021: 0.03) in the second quarter. The gross profit for the first half of the year was 3,949 (6M 2021: 8,151) thousand euros and the gross profit margin was 5.0% (6M 2021: 12.2%). During the first six months, the operating loss (EBIT) was -4,174 (6M 2021: operating profit 1,168) thousand euros. In total, the Group’s net loss for the first half of the year was -4,491 (6M 2021: net profit 785) thousand euros and earnings per share was -0.25 (6M 2021: 0.04) euros.

Core Business and Markets

The Group’s core business, production, accounted for 89.3% of the Group’s consolidated revenue. Thanks to the growth in sales volumes of companies manufacturing electrical equipment and the support of large-scale special-order work, the sales volume of the production segment increased by 18.3% to 37.4 million euros in the reporting quarter.

Sales of the reporting quarter to the Estonian market remained at the same level as last year, being 6.9 million euros. In six months, revenue increased by 15.1% to 13.8 million euros. The increase was mainly due to the increase in sales of hermetic distribution transformers and distribution cabinets. The Estonian market accounted for 16.4% (Q2 2021: 19.0%) of the consolidated revenue in the reporting quarter.

In the comparison of markets, the sales growth was the highest for the Finnish market. In the reporting quarter, revenue was 3.7 million euros more than the year before, totaling 22.1 million euros. In six months, 38.8 (6M 2021: 33.0) million euros were earned from the Finnish market. The majority of the sales volume in the reporting quarter consisted of the sale of substations to Finnish electricity network companies. The lower-than-usual six-month revenue in the previous year were mainly affected by a decrease in orders due to the snowy and cold winter, the start of new long-term orders, as well as some supply constraints and material shortages. In the reporting quarter, more than half, or 52.6% (Q2 2021: 50.6%) of Harju Elekter’s products and services were sold to the Group’s largest market.

Sales to the Swedish market decreased by 43% compared to the reporting quarters and by 19% compared to six months, being 3.5 and 9.3 million euros, respectively. The benchmark for the Swedish market was high, as the Swedish subsidiary had more projects underway than usual in the local market in the same period last year. Sweden accounted for 8.3% (Q2 2021: 16.9%) of the consolidated revenue of the reporting quarter.

Order volumes in the shipping sector in Norway are recovering. During the reporting quarter, 2.9 million euros worth of Group products and services were sold on the Norwegian market, which was 45% more than in the same period of the previous year. Compared to six months, revenue doubled to 7.4 million euros. Revenue increases in both periods are due to low order volume in the comparison periods. The Norwegian market accounted for 6.9% (Q2 2021: 5.5%) of the quarter’s revenue.

Investments

During the reporting period, the Group invested a total of 2.2 (6M 2021: 3.9) million euros in non-current assets, incl 1.2 (6M 2021: 0.2) million euros in investment properties, 0.7 (6M 2021: 3.5) million euros in property, plant, and equipment and 0.3 (6M 2021: 0.2) million euros in intangible assets. Most of the investments during the reporting period were directed to the construction of the Laohotell III production and warehouse complex, in the Allika Industrial Park, which today is filled with tenants. In addition, investments were made in production technology equipment and production and process management systems.

The value of the Group’s non-current financial investments totaled 23.6 (31.12.21: 25.2) million euros as of the reporting date. The main change were the partial sale of securities and the decrease in fair value of 0.9 million euros in the first half of the year. A total of 1.3 (6M 2021: 1.0) million euros was received from the partial sale of listed securities during the first half of the year, of which the realized profit was 0.32 (6M 2021: 0.27) million euros. Harju Elekter increased its stake in the technology company IGL-Technologies Oy from 5.5% to 10% by 0.2 million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.43 euros. As of 30 June 2022, AS Harju Elekter had 9,842 shareholders. The number of shareholders increased during the reporting quarter by 97.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION  
Unaudited      
EUR’000 30.06.2022 31.12.2021 30.06.2021
ASSETS  
Current assets  
Cash and cash equivalents 629 574 1,576
Trade and other receivables 31,134 33,689 27,215
Prepayments 1,729 1,844 1,366
Inventories 38,185 27,437 24,623
Total current assets 71,677 63,544 54,780
Non-current assets      
Deferred income tax assets 762 690 575
Non-current financial investments 23,596 25,222 21,259
Investment properties 24,647 23,903 23,328
Property, plant and equipment 25,794 26,654 24,879
Intangible assets 7,711 7,544 7,224
Total non-current assets 82,510 84,013 77,265
TOTAL ASSETS 154,187 147,557 132,045
       
LIABILITIES AND EQUITY      
Liabilities      
Borrowings 20,398 16,912 15,292
Prepayments from customers 8,558 4,659 1,919
Trade and other payables 27,615 24,490 22,208
Tax liabilities 3,525 3,156 2,946
Current provisions 551 35 73
Total current liabilities 60,647 49,252 42,438
Borrowings 14,158 11,426 9,469
Other non-current liabilities 33 33 65
Total non-current liabilities 14,191 11,459 9,534
TOTAL LIABILITIES 74,838 60,711 51,972
Equity      
Share capital 11,352 11,352 11,176
Share premium 1,601 1,601 804
Reserves 17,913 18,716 15,173
Retained earnings 48,595 55,315 53,080
Total equity attributable to the owners of the parent company 79,461 86,984 80,233
Non-controlling interests -112 -138 -160
Total equity 79,349 86,846 80,073
TOTAL LIABILITIES AND EQUITY 154,187 147,557 132,045

 

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS    
Unaudited    
   
EUR’000 Q2 Q2 6M 6M  
2022 2021 2022 2021  
Revenue 41,914 36,310 79,235 67,028  
Cost of sales -40,951 -32,004 -75,286 -58,877  
Gross profit 963 4,306 3,949 8,151  
Distribution costs -1,515 – 1,315 -2,866 -2,529  
Administrative expenses -2,764 -2,437 -5,429 -4,654  
Other income 322 188 378 360  
Other expenses -54 -91 -206 -160  
Operating profit/loss (-) -3,048 651 -4,174 1,168  
Finance income 34 51 74 68  
Finance costs -111 -60 -230 -158  
Profit/loss (-) before tax -3,125 642 -4,330 1,078  
Income tax -72 -154 -161 -293  
Profit/loss (-) for the period -3,197 488 -4,491 785  
Profit /loss (-) attributable to:          
    Owners of the parent company -3,209 485 -4,517 795  
    Non-controlling interests 12 3 26 -10  
Earnings per share      
   Basic earnings per share (euros) -0.18 0.03 -0.25 0.04  
   Diluted earnings per share (euros) -0.18 0.03 -0.25 0.04  

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME    
Unaudited    
   
EUR’000 Q2 Q2 6M 6M  
2022 2021 2022 2021  
Profit/loss (-) for the period -3,197 488 -4,491 785  
Other comprehensive income      
Items that may be reclassified to profit or loss      
   Impact of exchange rate changes of a foreign subsidi­aries -86 19 -65 -4  
Items that will not be reclassified to profit or loss      
   Gain on sales of financial assets 169 221 320 265  
   Net gain/loss (-) on revaluation of financial assets -336 7,954 -858 8,319  
Total comprehensive income for the period -253 8,194 -603 8,580  
Other comprehensive income -3,450 8,682 -5,094 9,365  
Total comprehensive income attributable to:          
    Owners of the Company -3,462 8,680 -5,120 9,375  
    Non-controlling interests 12 2 26 -10  
           

Interim Report of Harju Elekter Group Q2 2022

Tiit Atso
Chairman of the Board
+372 674 7400

Increase of Share Capital in Connection with Realization of the Employee Option Programme and Subscription Results

The Supervisory Board of AS Harju Elekter decided to increase the share capital of the company by 170,700.39 euros by issuing new ordinary shares. The increase of the share capital was triggered by the need to issue new shares to the key persons of Harju Elekter Group, incl. the members of the governing bodies, leading specialists, and engineers, participating in the option program approved with the resolution of the general meeting on 3 May 2018.

A total of 75 current and former employees of Harju Elekter participated in the issue of AS Harju Elekter shares total of 270,953 shares for a total of 1,078,392.94 euros. A total of 26,247 shares were not subscribed.

Decisions of the Supervisory Board of AS Harju Elekter:

  1. Harju Elekter’s share capital will be increased by a maximum of 170,700.39 euros, i.e., from 11,351,689.65 euros to 11,522,390.04 euros.
  2. The share capital will be increased by way of issuing new shares (ISIN: EE3100004250). During the increase of the share capital to issue 270,953 new ordinary shares of Harju Elekter, with a book value of 0,63 euros per share. The increase of the share capital and payment for the new shares will be carried out fully by way of monetary contribution. The shares will be issued with a share premium. The issue price is 3.98 euros per share, with a book value of the share amounting to 0.63 euros and the share premium to 3.35 euros.
  3. After the increase of the share capital, Harju Elekter has a total of 18,289,508 ordinary shares without nominal value. The increase of Harju Elekter’s share capital will not create any exceptions or special rights in connection with the ordinary shares. The new shares to be issued during the increase of share capital shall grant the right to dividend for the financial year started on 1 January 2022.
  4. Pursuant to the resolution of the general meeting of 3 May 2018, which approved Harju Elekter’s share option program and its basic conditions, 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 determined by Harju Elekter’s Supervisory Board and with whom Harju Elekter has concluded the relevant option agreements  shall have the pre-emptive right to subscribe Harju Elekter’s new shares. Harju Elekter’s shareholders, who are not intended to benefit from share option program approved with the resolution of the general meeting of 3 May 2018, shall not have any pre-emptive right to subscribe Harju Elekter’s shares within the framework of the increase of the share capital.
  5. The due date for exercising the pre-emptive right of subscription and the due date for subscribing shares was 15 July 2022. The option beneficiaries submitted their subscription notes in a timely manner and made payments for the subscribed shares.
  6. To grant to Harju Elekter’s management board a right to cancel the new shares which have not been subscribed for during the subscription period. The board may exercise the aforementioned right within 15 days after the end of the subscription period.

All new shares of Harju Elekter issued during the share issue will be listed on Nasdaq Tallinn on the day following the date on which the additionally issued shares with temporary ISINs have been included in the Estonian Central Securities Depository (Nasdaq CSD) together with the previously issued shares with main ISINs.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for Q1 2022 was 37.3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Ursula Joon
Lawyer
+372 674 713
ursula.joon@harjuelekter.com

Engineering internship experience in Harju Elekter

We are happy to present Erik and Tanel, our ambitious trainees, who have decided to complete their engineering internship at the Harju Elekter sheet metal factory in Keila. We asked them how the internship has gone so far, what they think about their first international business trip, and what attracts them the most of the engineering world.

The answer to the question of what makes working at Harju Elekter so exciting is quick and same from both Erik and Tanel: “Our team!”. “It’s nice to see people working here because they really like it,” adds Tanel. Recalling his childhood, Tanel says that when he was a boy, he had many career ideas. From a fireman to a schoolteacher. But the idea of becoming an engineer came up at school. “Erik nodded and added that while picking a specialty, he had a choice between road building and robotics. I decided to see how things are going with robots – so far I’m happy with the choice,’ explains Erik. Both agree that engineering is exciting, creative and offers a variety of job possibilities. “Engineers are the people who create the way of the future,” says Tanel. Erik added that there is always a new problem for engineers to solve, and there is definitely no risk of boredom in this area.”At least at Harju Elekter we haven’t got bored!”, says Tanel.

Praktika Harju Elektris - Erik Simin ja Tanel Truus

From left: Erik Simin, Ignas Kiauliavicius, Tanel Truus

The engineering trainees also gained their first international internship experience by spending a whole week at Harju Elekter’s Lithuanian plant. In addition to the factory, there is also the academy of Harju Elekter where young engineers are trained, and that’s where Erik and Tanel spent most of their international internship week. “First we had an electrical training, then Solid Edge training. Afterwards we were able to do our part and participate in the production process,” explains Tanel. Erik adds that all week of internship in Lithuania was exciting, concise and they did not feel excluded, even for a second. „A decent programme was set up for us,“ he said. Erik is also grateful to his Lithuanian colleague, senior mechanical engineer Ignas, who devoted a considerable amount of time to them, provided them a professional training and answered absolutely all questions. “We learned a lot from him,” says Tanel. Tanel adds: “Generally speaking, many people asked how we were doing and were interested in the internship process. There are many kind-hearted people at Harju Elekter!”.

Would they recommend Harju Elekter’s internship to the others? „Yes, absolutely!“ Erik and Tanel say in the same breath. Tanel emphasises the decision of the Estonian plant manager to send trainees to Lithuania to acquire new skills: “This is a big step for a trainee. The first internship and already such an experience!”. At Harju Elekter, there are certainly interesting challenges for students from our speciality. Both product development as well as robotics students can find a career opportunity. For instance, I’m working with a robot right now,” explains Erik.

At the end of the conversation, Erik and Tanel talk about their awesome team events – for example, last week they had a disc golf competition with the team. Even though Erik and Tanel have been at Harju Elekter for a short time, they feel like a very valued team members.

When asked what the future holds, both say that they hope to continue to work at Harju Elekter as well as continue with their studies at TalTech. The employer fully supports the studies by offering flexible work hours, and there are several other young engineers on the engineer team who study and work at the same time.

We wish Erik and Tanel the best of luck in their careers!

Swedish subsidiary of Harju Elekter signed a new contract with Region Stockholm for the upgrading of the metro station

The Swedish subsidiary of Harju Elekter Group, Harju Elekter AB, signed electricity project contract with Region Stockholm, the administrative body responsible for public transport. This contract will serve as the basis for the upgrading of the rectifier station of the Odenplan metro station by February 2024. The approximate volume of the contract is 1.7 million euros.

The new project of Harju Elekter with Region Stockholm, which manages the Stockholm metro, represents the continuation of cooperation that already started with the modernisation of the Slussen metro in autumn 2020 and Albano and Rådhuset metro stations in spring 2021.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for Q1 2022 was 37.3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com
https://harjuelekter.com/investors/

Harju Elekter is planning a new production building for Allika Industrial Park

On the 7th of June, AS Harju Elekter signed a letter of intent with Reimax Electronics OÜ for the design, construction, and long-term lease of the production building at Allika Industrial Park. The design of the nearly 6,000 m2 building is planned for the third quarter of this year and will be completed by the end of 2023 at the latest. The construction cost is approximately 6.5 million euros.

Reimax Eletronics OÜ is the subsidiary of Reimax Electronics Oy, founded in 1991, which is focused on manufacturing of electric harnesses, fibre optic cables and equipment cables, as well as electromechanical assemblies.

The real estate unit of Harju Elekter Group is engaged in the development of industrial real estate, project management, leasing, and related services for both rental partners and Harju Elekter’s own companies. The real estate unit manages a total of nine industrial parks in Estonia, Finland, Lithuania, and Sweden.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for Q1 2022 was 37.3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 674 7400

Additional information:
Aron Kuhi-Thalfeldt
Real Estate Department Manager
+372 5171448

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Correction: Changes in the Supervisory Boards of the Estonian subsidiaries of AS Harju Elekter

Added information on the number of shares of the issuer held by Tarmo Kikas.

Andres Allikmäe will be recalled from the Supervisory Board of AS Harju Elekter’s subsidiaries AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, and Jan Osa from the Supervisory Board of AS Harju Elekter Elektrotehnika with effect from 31 May 2022.

Tarmo Kikas will be appointed as a new member of the Supervisory Board of AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika from 1 June 2022 for a term of five years. Tarmo Kikas is the Financial Controller of AS Harju Elekter. Before joining Harju Elekter in 2019, Tarmo Kikas worked as an auditor at KPMG for ten years. He holds a Bachelor’s degree in Economics from the University of Tartu. Tarmo Kikas owns 1,100 shares in Harju Elekter through his company OÜ Heta Kapital.

After the implementation of the changes, both Supervisory Boards will continue to be composed of three members: Tiit Atso (Chairman), Endel Palla, and Tarmo Kikas.

Harju Elekter has also decided to change Energo Veritas OÜ’s governance structure and abolish the Supervisory Board. In this context, all members of the Supervisory Board of Energo Veritas OÜ will be recalled as of 31 May 2022. The governing bodies of Energo Veritas OÜ will remain the Shareholders’ Meeting and the Management Board.

All of the above changes will be made for the purpose of reorganising the overall management structure of the AS Harju Elekter group.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the Group’s revenue for Q1 2022 was 37,3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Board
+372 674 7400

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Changes in the Supervisory Boards of the Estonian subsidiaries of AS Harju Elekter

Andres Allikmäe will be recalled from the Supervisory Board of AS Harju Elekter’s subsidiaries AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, and Jan Osa from the Supervisory Board of AS Harju Elekter Elektrotehnika with effect from 31 May 2022.

Tarmo Kikas will be appointed as a new member of the Supervisory Board of AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika from 1 June 2022 for a term of five years. Tarmo Kikas is the Financial Controller of AS Harju Elekter. Before joining Harju Elekter in 2019, Tarmo Kikas worked as an auditor at KPMG for ten years. He holds a Bachelor’s degree in Economics from the University of Tartu.

After the implementation of the changes, both Supervisory Boards will continue to be composed of three members: Tiit Atso (Chairman), Endel Palla, and Tarmo Kikas.

Harju Elekter has also decided to change Energo Veritas OÜ’s governance structure and abolish the Supervisory Board. In this context, all members of the Supervisory Board of Energo Veritas OÜ will be recalled as of 31 May 2022. The governing bodies of Energo Veritas OÜ will remain the Shareholders’ Meeting and the Management Board.

All of the above changes will be made for the purpose of reorganising the overall management structure of the AS Harju Elekter group.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the Group’s revenue for Q1 2022 was 37,3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer

+372 674 7413

Changes in the Audit Committee of AS Harju Elekter

The Supervisory Board of AS Harju Elekter decided on May 20th, 2022, to appoint Risto Vahimets as the new member of the Audit Committee and Andres Toome as the chairman of the Audit Committee.

The Audit Committee will continue with three members: Andres Toome (chairman), Triinu Tombak and Risto Vahimets.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for Q1 2022 was 37,3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Cancellation of the framework contracts for hermetic transformers with Enefit Connect OÜ

Energo Veritas OÜ, a subsidiary of AS Harju Elekter, has cancelled  two framework contracts with Enefit Connect OÜ for the supply of hermetic distribution transformers.

From 2021 onwards, change in the market situation in terms of price levels, availability of raw materials as well as delivery deadlines has made it difficult for Energo Veritas OÜ to comply with the framework contracts concluded with Enefit Connect OÜ on the agreed terms, and the war in Ukraine further aggravated it. During the negotiations, the parties have not reached an agreement on the modification of the terms of the framework contracts, which is why Energo Veritas OÜ does not consider it possible to continue with the performance of economically harmful framework contracts.

Enefit Connect OÜ has stated that it does not consider the cancellation of the framework contracts to be lawful and has informed Energo Veritas OÜ of its intention to claim a contractual penalty for the breach of the framework contracts as well as additional damages if the damages caused as a result of the cancellation exceed the contractual penalty.

More detailed information will be available once claims are received.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the Group’s revenue for Q1 2022 was 37,3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Kristo Reinhold
Managing Director of Energo Veritas OÜ
+372 5061208

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Dividend payment ex-date of AS Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 17 May 2022 at the end of the working day of the Nasdaq CSD Estonian settlement system.

Proceeding from the above, the day of change of the rights related to the shares (the ex-date) is 16 May 2022. From that date the new owner of the shares is not entitled to dividends for the year 2021.

AS Harju Elekter will pay dividend 0.14 euros per share on 24 May 2022.

 

Tiit Atso
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Restructuring of the Lithuanian subsidiary of Harju Elekter Group

In order to separate real estate management from production activities, Harju Elekter has decided to carry out the demerger of its Lithuanian subsidiary. In the course of the demerger, the real estate of Harju Elekter UAB, including administrative and production buildings, will be transferred to the new company being established.

The real estate company to be set up in Lithuania will be 100% owned by AS Harju Elekter. The structural change is planned to be implemented in the coming months.

Harju Elekter is an international industrial Group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 employees, and the Group’s revenue for Q1 2022 was 37.3 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Tomas Prūsas
Managing Director of Harju Elekter UAB
+37068746399

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Termination of the framework contract for compact secondary substations with Enefit Connect OÜ

AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, will not renew the contract with Enefit Connect OÜ (before the transfer of the contract Elektrilevi OÜ) with the capacity of the prefabricated compact secondary substations with the capacities of 630 kVA and 1000 kVA and the accompanying components.

The significantly changed economic environment, where the prices of input materials, components and energy have risen sharply since the outbreak of the war in Ukraine, does not favour the continuation of the contract under the previously agreed conditions, which is why it was decided not to renew the contract for the next 24 months. The contract expires on 28.02.2023.

To date, Harju Elekter Elektrotehnika has supplied Enefit Connect with over the 600 substations in the total volume of approximately 15 million euros.

Harju Elekter is an international industrial group with more than 50 years of experience, whose main activity is the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the group’s revenue for 2021 was 152 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso

Chairman of the Management Board

+372 674 7400

 

Additional information:

Indrek Ulmas

CEO of Harju Elekter Elektrotehnika AS

+372 5061208

 

Prepared by:

Ursula Joon

Lawyer

+372 674 7413

Election of the Chairman of the Supervisory Board of AS Harju Elekter

The Supervisory Board of AS Harju Elekter elected Triinu Tombak as the new Chairman of the Supervisory Board. She has been the Member of the Supervisory Board of AS Harju Elekter from 1997 to 2007 and from 2012 to date.

As of 4 May 2022, the Supervisory Board of Harju Elekter has 6 members, in the following composition: Triinu Tombak, Andres Toome, Aare Kirsme, Arvi Hamburg, Märt Luuk ja Risto Vahimets. The term of office of the Members of the Supervisory Board is 5 (five) years.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Decisions of Annual General Meeting of AS Harju Elekter

The Annual General Meeting of Shareholders of AS Harju Elekter was held on 28 April 2022 starting at 10 a.m., at the Keila Kultuurikeskus, Keskväljak 12. The AGM was attended by 65 shareholders and their authorised representatives who represented the total of 11 581 806 votes accounting for 64,28 % of the total votes.

 

The decisions of the General Meeting were as follows:
1. Approval to AS Harju Elekter annual report of 2021

To approve the annual report of AS Harju Elekter of 2021, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 147,557 thousand euros as of 31.12.2021, while the revenue of the financial year was 152,757 thousand euros and net profit 2,610 thousand euros.

The number of the votes given in favor of the resolution was 11,522,000 which accounted for 99.48% of the voted participants.

 

  1. Approval to profit distribution

To approve the profit distribution proposal of AS Harju Elekter of 2021 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2021 52,716,658 euros
total net profit 2021, attributable to owners of the parent company 2,598,173 euros
total retained profit on 31.12.2021 55,314,831 euros

 

dividends (0,14 euros per share*)  2,522,598 euros
balance carried forward after profit distribution 52,792,233 euros

 

*The shareholders registered in the shareholders’ registry on 17 May 2022 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 16 May 2022. From that date the new owner of the shares is not entitled to dividends for the year 2021. The dividends will be paid to the shareholders on 24 May 2022 by a transfer to the bank account of the shareholder.

The number of the votes given in favor of the resolution was 11,541,230 which accounted for 99,65% of the voted participants.

 

3. Remuneration principles

To approve remuneration principles of AS Harju Elekter in the form submitted to the General Meeting.

The number of the votes given in favor of the resolution was 11,553,086 which accounted for 99,75% of the voted participants.

 

4. Amendment of the Articles of Association

Amend the Articles of Association of AS Harju Elekter and approve the new wording of the Articles of Association in the form submitted to the General Meeting.

The number of the votes given in favor of the resolution was 11,577,799 which accounted for 99.97 % of the voted participants.

5. Election of member of the Supervisory Board

In connection with the expiry of the term of office of the members of the Supervisory Board on 3 May 2022, to elect a 6-member Supervisory Board for a term of 5 (five) years, from 4 May 2022 to 3 May 2027, in the following composition: Triinu Tombak, Andres Toome, Aare Kirsme, Arvi Hamburg, Märt Luuk ja Risto Vahimets.

The number of the votes given in favor of the resolution was 11,500,529 which accounted for 99.30 % of the voted participants.

6. Approval of the remuneration of the Supervisory Board

To determine the remuneration of the chairman of the Supervisory Board in the amount of 2,500 euros per month and the remuneration of the Supervisory Board member in the amount of 2,000 euros per month.

The number of the votes given in favor of the resolution was 11,555,587 which accounted for 99.77 % of the voted participants.

 

Annual Report 2021, Articles of Association, remuneration principles is provided on www.harjuelekter.com on the General Meeting 2022 site.

The webinar recording of the annual general meeting is found at https://youtu.be/GNEMV67JIOs.

 

Tiit Atso
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group financial results, 1-3/2022

The year began for Harju Elekter on an optimistic note with a record order book, the possible stabilisation of material prices, and price negotiations for framework agreements. Nevertheless, the quarter was a difficult one and successive global challenges caused an adverse effect on the first-quarter results of Harju Elekter. The war does not have a direct impact on the operations of Harju Elekter, as our target markets have always been the Nordic and the Western European countries. At the same time, we can see indirect effects. Rising energy prices, continuing increases in material and key component prices, supply chain disruptions and rising inflation as a result of the ongoing crises in the world, are all factors that are inevitably having an impact on the company’s profitability. Despite strong sales growth, the quarter ended with a loss. We could not fill orders with enough efficiency nor pass the increase in material prices fully to the customers. In order to keep the production units running steadily, to increase the lower-than-expected security of supply in the first quarter and to prepare for the fulfilment of record orders for the full year, the Group is committed to maintaining higher material stocks and entering into larger-scale agreements with suppliers in the coming periods.

Revenue, Expenses, and Profit

The consolidated revenue for the first quarter of 2022 was 37.3 (Q1 2021: 30.7) million euros, which increased by 21.5% compared to the comparable period. At the same time, revenue increased in all of the Group’s largest target markets: Estonia, Finland, Sweden and Norway. The growth was ensured by long-term and large-scale contracts concluded at the beginning of last year.

 

 EUR’000   3 months 3 months +/-
    2022 2021  
Revenue 37,321 30,717 21.5%
Gross profit 2,986 3,844 -22.3%
EBITDA -68 1,485 -104.6%
Operating profit/loss (-) (EBIT) -1,125 516 -318.0%
Profit/loss (-) for the period -1,294 297 -535.7%
 Incl. attributable to owners of the parent company -1,308 310 -521.9%
Earnings per share (EPS) (euros) -0.07 0.02 -450.0%

Core Business and Markets

The Group’s core business, production, accounted for 87.7% of the Group’s consolidated revenue. Thanks to the growth in sales volumes of companies manufacturing electrical equipment, the sales volume of the production segment increased by 20.3% to 32.7 million euros in the reporting quarter.

Sales to the Estonian market increased by 36.1% to 6.9 (Q1 2021: 5.1) million euros year-on-year. The increase was mainly due to the increase in sales of hermetic distribution transformers and distribution cabinets. The Estonian market accounted for 18.5% (Q1 2021: 16.5%) of the consolidated revenue in the reporting quarter.

The Finnish market generated revenue of 16.7 (Q1 2021: 14.6) million euros. The majority of the sales volume in the reporting quarter consisted of the sale of substations to Finnish electricity network companies. The planned sales volume of project sales in the reporting quarter was not achieved due to some component shortages and production stoppages caused by illness. During the reporting year, 44.7% (Q1 2021: 47,5%) of the Group’s products and services were sold to the Group’s largest market, Finland.

Sales to the Swedish market increased by 9% compared to the reporting quarters, amounting to 5.8 (Q1 2021: 5.3) million euros. Operating volumes have stabilised; targeted work continued. Sweden accounted for 15.6% (Q1 2021: 17.4%) of consolidated revenue in the reporting quarter, this time remaining the third largest market.

During the quarter, the Group’s products and services worth 4.5 (Q1 2021: 1.9) million euros were sold to the Norwegian market, which was 141.2% more than in the same period of the previous year. The change in revenue is due to the low order volume in the comparison period. Looking at the longer term, it can be stated that the order volumes of the shipping sector have returned to the average level. The Norwegian market accounted for 12.1% (Q1 2021: 6.1%) of quarterly sales.

Investments

During the first quarter, the Group invested a total of 1.5 (Q1 2021: 2.1) million euros in non-current assets, incl 1.0 million euros in investment properties, 0.4 (Q1 2021: 2.0) million euros in property, plant, and equipment and 0.1 (Q1 2021: 0.1) million euros in intangible assets. Most of the investments during the reporting period were directed to the construction of the Laohotell III production and warehouse complex, in the Allika Industrial Park, and to production technology equipment.

Non-current financial investments increased by 0.8 million euros to 24.4 million euros during the reporting period. The main changes were the partial sale of securities and the decrease in the fair value of 0.5 million euros in the first quarter. A total of 665 thousand euros was received from the partial sale of listed securities in the reporting quarter, of which the realized profit was 0.2 million euros. In the comparable period, 0.2 million euros were received from the sale of listed securities, of which the realized profit was 43 thousand euros. In the reporting quarter, Harju Elekter Oy increased its holding in technology company IGL-Technologies Oy from 5,5% to 10%.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 6.92 euros. As of 31 March 2021, AS Harju Elekter had 9,745 shareholders. The number of shareholders increased during the reporting quarter by 358.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 31 March 2022 31 December 2021
ASSETS
Current assets
Cash and cash equivalents 286 574
Trade and other receivables 35,663 33,689
Prepayments 3,119 1,844
Inventories 37,692 27,437
Total current assets 76,760 63,544
Non-current assets
Deferred income tax assets 776 690
Non-current financial investments 24,410 25,222
Investment properties 24,603 23,903
Property, plant and equipment 26,303 26,654
Intangible assets 7,659 7,544
Total non-current assets 83,751 84,013
TOTAL ASSETS 160,511 147,557
LIABILITIES AND EQUITY
Liabilities
Borrowings 21,354 16,912
Prepayments from customers 6,681 4,659
Trade and other payables 31,063 24,490
Tax liabilities 3,663 3,156
Current provisions 51 35
Total current liabilities 62,812 49,252
Borrowings 12,401 11,426
Other non-current liabilities 33 33
Total non-current liabilities 12,434 11,459
TOTAL LIABILITIES 75,246 60,711
Equity
Share capital 11,352 11,352
Share premium 1,601 1,601
Reserves 18,278 18,716
Retained earnings 54 158 55 315
Total equity attributable to the owners of the parent company 85,389 86,984
Non-controlling interests -124 -138
Total equity 85,265 86,846
TOTAL LIABILITIES AND EQUITY 160,511 147,557

 

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Unaudited
EUR’000 3 months 3 months
2022 2021
Revenue 37,321 30,717
Cost of sales -34,335 -26,873
Gross profit 2,986 3,844
Distribution costs -1,350 -1,214
Administrative expenses -2,665 -2,217
Other income 56 172
Other expenses -152 -69
Operating profit/loss (-) -1,125 516
Finance income 39 17
Finance costs -119 -98
Profit/loss (-) before tax -1,205 435
Income tax -89 -138
Profit/loss (-) for the period -1,294 297
Profit/loss (-) attributable to:
    Owners of the parent company -1,308 310
    Non-controlling interests 14 -13
Earnings per share
  Basic earnings per share (EUR) -0.07 0.02
  Diluted earnings per share (EUR) -0.07 0.02

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR’000 3 kuud 3 kuud
2022 2021
Profit/loss (-) for the period -1,294 297
Other comprehensive income
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries 20 -23
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 151 43
   Net gain/loss (-) on revaluation of financial assets -521 365
Total comprehensive income for the period -350 385
Other comprehensive income -1,644 682
Total comprehensive income attributable to:
    Owners of the Company -1,658 695
    Non-controlling interests 14 -13

Interim Report Q1 2022

Tiit Atso
Chairman of the Board
+372 674 7400

 

Subsidiary of Harju Elekter signed a contract for a ship to be built for the Polish Maritime Office

The Finnish subsidiary of Harju Elekter Group, Telesilta Oy, signed a contract on 7 April 2022 with Uudenkaupungin Työvene Oy to provide turnkey delivery of electrical, automation, and navigation systems for trailing suction hopper dredger. The contract price is 2.5 million euros. The delivery will take place at the end of 2023 and the ship operator will be the Maritime Office in Gdynia, Poland.

Uudenkaupungin Työvene (Uki Workboat), established in 1987, has extensive experience in designing and building boats and vessels for professional use. The company delivers tailor-made turnkey projects on time and to cost. Telesilta Oy and Uudenkaupungin Työvene Oy have a long history in working as partners in the shipbuilding industry.

Telesilta Oy is an electrical engineering company established in 1978 and belonging to the Harju Elekter Group. The company specializes in challenging electrical contracting, for example, in shipbuilding industry – everything from planning to installation, implementation, and service. It also carries out electrical, maintenance, and repair work on industrial properties and other buildings.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the group’s revenue for 2021 was 152 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso

Chairman of the Board

+372 674 7400

 

Additional information:

Joonas Puustelli

Managing Director of Telesilta Oy

+358 50 303 9991

 

Prepared by:

Marita Haho

Communications Specialist

+372 5398 3845

marita.haho@harjuelekter.com

 

AS Harju Elekter disposes its holding in SIA Energokomplekss

AS Harju Elekter signed a contract to dispose its 14% holding in SIA Energokomplekss to the company’s managing director Kristaps Bleija. Harju Elekter is one of the founders of SIA Energokomplekss, engaged in the wholesale of electronic and telecommunications equipment and parts, established in 2006. The sale of the holding is related to Harju Elekter’s goal to focus on its core business

Andres Allikmäe, who represented Harju Elekter in SIA Energokomplekss, will resign as a member of the Management Board on April 4, 2022.

As the transaction is not significant according to the Stock Exchange Rules, the parties will not disclose the value of the transaction. The transaction is not a transaction with persons connected to the issuer and does not have a significant impact on the operations of Harju Elekter Group. The members of the supervisory board and management board of AS Harju Elekter are not personally or in other way interested in the transaction.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation equipment. Part of the technical solutions of Harju Elekter are aimed at the renewable energy sector, offering complete plans for solar power plants, electric vehicle charging stations, and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the group’s revenue for 2021 was 152 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
+372 674 7400

Prepared by:
Ursula Joon
Lawyer
+372 674 741

Invitation to the Annual General Meeting of shareholders of AS Harju Elekter, its agenda and proposals

The Management Board of Aktsiaselts Harju Elekter (registry code 10029524, address Paldiski mnt 31, Keila) convenes the Annual General Meeting of shareholders. The General Meeting will take place on 28 April 2022 at 10:00 a.m. at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

Registration of meeting participants will start on 28 April 2022 at 09:00. Pursuant to subsection 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting is fixed seven days before the General Meeting, i.e. as of the end of the business day of the Nasdaq CSD Estonian settlement system on 21 April 2022.

Only a shareholder or their representative who is without pathognomonic signs, is allowed to attend the General Meeting physically in person.

Shareholders have the opportunity to vote on the items on the agenda before the General Meeting by e-mail or post and to follow the General Meeting as a webinar. A more detailed overview of how it is possible to vote before the General Meeting and to participate in the webinar is provided in the section “Organisational issues” of this notice and on the website of AS Harju Elekter at www.harjuelekter.com.

The Supervisory Board of Aktsiaselts Harju Elekter set the agenda of the following General Meeting and approved the following proposals:

  1. Approval of the 2021 Annual Report of AS Harju Elekter

Approve the 2021 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as of 31 December 2021 is 147,557 thousand euros, revenue is 152,757 thousand euros and net profit for the financial year is 2,610 thousand euros.

  1. Approval of profit distribution

Approve the 2021 profit distribution proposal of AS Harju Elekter submitted by the Management Board and approved by the Supervisory Board as follows:

   Retained earnings  EUR 52,716,658
Total net profit for 2021 attributable to owners of the parent company    EUR 2,598,173
Total distributable profit as of 31.12.2021  EUR 55,314,831

    The Management Board proposes the distribution of profits as follows:

Dividends (EUR 0.14 per share*)    EUR 2,522,598
Retained earnings after distribution of profit  EUR 52,792,233

*Dividends will be paid to shareholders on 24 May 2022, by transfer to the shareholder’s bank account. The list of shareholders for the payment of dividends is established on 17 May 2022 as at the end of the business day in the accounting system. The date of the change in the rights related to the securities (ex-date) is 16 May 2022, from this date, the person who acquired the shares is not entitled to receive dividends for the financial year 2021.

  1. Remuneration Principles

To approve remuneration principles of AS Harju Elekter in the form submitted to the General Meeting.

According to section 135² (11) of the Securities Market Act the General Meeting shall vote on the principles of remuneration at least once every four years and the respective resolution of the General Meeting on the approval of the principles of remuneration is advisory for the supervisory board.

  1. Amendment of the Articles of Association

Amend the Articles of Association of AS Harju Elekter in the form submitted to the General Meeting.

  1. Election of members of the Supervisory Board

In connection with the expiry of the term of office of the members of the Supervisory Board on 3 May 2022, to elect a 6-member Supervisory Board for a term of 5 (five) years, from 4 May 2022 to 3 May 2027, in the following composition: Triinu Tombak, Andres Toome, Aare Kirsme, Arvi Hamburg, Märt Luuk ja Risto Vahimets.

  1. Approval of the remuneration of the Supervisory Board

To determine the remuneration of the chairman of the Supervisory Board in the amount of 2,500 euros per month and the remuneration of the Supervisory Board member in the amount of 2,000 euros per month.

———————————————————————————————————————————————————-

ORGNISATIONAL ISSUES

Shareholders whose shares represent at least 1/20 of the share capital may request that additional items be included in the agenda of the General Meeting if the respective request is submitted in writing 15 days before the General Meeting, no later than on 13 April 2022.

Shareholders whose shares represent at least 1/20 of the share capital may submit a draft resolution on each item on the agenda no later than 3 days before the General Meeting, no later than on 25 April 2022. Further information on the procedure and terms for exercising the rights provided pursuant to section § 287 (right of shareholder to information), subsection 293 (2) (right to request inclusion of additional items on the agenda and subsection 2931 (3) (obligation to submit a draft resolution or a substantiation simultaneously with the demand on the modification of the agenda) and subsection 2931 (4) (right to submit a draft resolution in respect to each item on the agenda) has been disclosed on the website of AS Harju Elekter at www.harjuelekter.com. This is also where draft resolutions submitted by shareholders and the substantiations of the resolutions, if any, are also disclosed. After the agenda of the General Meeting, incl. the exhaustion of additional items on the agenda, shareholders can request information from the Management Board regarding the activities of the public limited company.

The documents of the annual general meeting of AS Harju Elekter, including the annual report, the sworn auditor’s report, the profit distribution proposal, the report of the Supervisory Board, the principles of remuneration of the members of the Management Board and the draft resolutions of the items on the agenda are available on the Nasdaq Tallinn website at http://www.nasdaqbaltic.com and on the company’s website at www.harjuelekter.com or in Keila, at Paldiski mnt 31. Questions regarding the items on the agenda can be submitted to the e-mail address yldkoosolek@harjuelekter.com. Questions, answers, and positions of the meeting are published on the company’s Internet website.

Appointment of a representative. Prior to the General Meeting, a shareholder may announce the appointment of a representative and the revocation of the power of attorney granted to the representative by sending an e-mail to yldkoosolek@harjuelekter.com or by handing over the said document(s) on working days from 10:00 to 16:00 but no later than on 25 April 2022 at the AS Harju Elekter office at Paldiski mnt 31 (3rd floor) in Keila. A shareholder may use power of attorney forms to authorize a representative available on the website of AS Harju Elekter www.harjuelekter.com.

If voting prior to the General Meeting, shareholders are requested to fill in the ballot papers available on the website of AS Harju Elekter at www.harjuelekter.com and attached to the stock exchange announcement convening the General Meeting. When voting by e-mail, the completed ballot papers must be digitally signed and sent by e-mail to yldkoosolek@harjuelekter.com no later than by 27 April 2022 at 11:00.

When voting by mail, the completed ballot papers must be signed by hand and sent with a copy of the personal data of the signatory’s identity document by mail no later than by 27 April 2022 at 11:00 to the address of AS Harju Elekter, Paldiski mnt 31, Keila 76606.

Ballot papers received after the above deadline shall not be considered. If a shareholder submits several completed ballot papers, the ballot paper with the latest digital signature time stamp or time of mailing shall be deemed valid. All previously submitted ballot papers shall be deemed invalid.

If the shareholder who submitted a ballot paper before the General Meeting also physically participates in the General Meeting, all ballot papers sent by the shareholder before the General Meeting shall be deemed invalid. The exact procedure for voting prior to the General Meeting is provided in the shareholder information document available on the website of AS Harju Elekter at www.harjuelekter.com and in the stock exchange announcement convening the General Meeting.

To register participants physically attending the General Meeting the following is required: shareholder who is a natural person – identity document; representative of a shareholder who is a natural person – identity document and a power of attorney in written form; legal representative of a shareholder who is a legal person – an extract from the relevant (commercial) register where the legal person is registered and an identity document of the representative; contractual representative of a shareholder who is a legal person shall submit a power of attorney in written form in addition to the documents specified above. Please legalise or apostille the documents of a legal person registered abroad in advance, unless otherwise provided by an international agreement. AS Harju Elekter may register a shareholder who is a foreign legal person as a participant in a General Meeting even if all the required information about the legal person or its representative is contained in a notarised power of attorney issued to the representative abroad and that power of attorney is acceptable in Estonia. Please present a passport or ID Card as an identity document.

Participation in the webinar of the General Meeting. We ask a shareholder to register no later than on 27 April 2022 at 11:00 here: https://nasdaq.zoom.us/webinar/register/WN_sJunD41hT0SYKUvGwO3bKw After registration, a link to the webinar and instruction for using the environment will be sent. If you are attending a webinar for the first time, you will be asked to download the required application. If downloading the application fails, the web browser will open automatically. The webinar will be held in Estonian. It is possible to follow and listen to what is happening at the General Meeting by way of the webinar. It is not possible to participate in voting through the webinar. Chairman of the Management Board Tiit Atso and Chairman of the Supervisory Board Endel Palla will present the company’s results and answer questions at the webinar. As the time of the webinar is limited, please send questions by 11:00 on 27 April 2022 to the e-mail address yldkoosolek@harjuelekter.com. The webinar will be recorded and published on the company’s website www.harjuelekter.com as well as on the youtube.com account of Nasdaq Baltic.

Questions regarding the general meeting, also about voting, can be submitted to the e-mail address yldkoosolek@harjuelekter.com.

Annual Report of Harju Elekter 2021

AS Harju Elekter Supervisory Board report on the 2021 financial year

Remuneration policies for members of the Management Board of AS Harju Elekter 2022

AS Harju Elekter Articles of Association 28.04.2022

Information about Supervisory Board members 2022

Information on the voting prior to the AGM

Ballot Paper for AGM 28.04.2022

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group’s audited Annual Report 2021

AS Harju Elekter presents its consolidated audited Annual Report for 2021 prepared by the Management Board and approved by the Supervisory Board. Compared to the unaudited interim report published on 23 February 2022, there are no differences in the audited financial results.

The consolidated audited revenue for the year of 2021 was 152.8 million euros, the operating profit was 3.2 million euros and net profit 2.6 million euros.

The original audited Annual Report 2021 document is submitted in machine-readable .xhtml format to the Nasdaq Tallinn Stock Exchange and digitally signed (Link: https://nasdaqbaltic.com/statistics/en/instrument/EE3100004250/reports).

Annual Report of Harju Elekter 2021 (pdf)

Annual Report of Harju Elekter 2021 (zip)

Tiit Atso
Chairman of the Management Board
+372 674 7400

The Lithuanian factory of Harju Elekter Group signed an agreement for the supply of motor controls to the USA

The Lithuanian subsidiary of Harju Elekter Group, Harju Elekter UAB, signed a contract on 1 March 2022 with U.S. Steel Corporation (Exploratory Ventures LLC) to produce low voltage drives and MCC systems to control 1500 motors that will be used in new Big River Steel facility in Arkansas. The beginning of production and supplies are scheduled for this year. Production and deliveries will take place until April 2023. The approximate volume of the contract is 10 million euros.

Founded in 1901, United States Steel Corporation is a leading steel producer that serves the automotive, construction, appliance, energy, containers, and packaging industries with high value-added steel products such as U. S. Steel’s proprietary XG3™ advanced high-strength steel. The company also maintains iron ore production and has an annual raw steelmaking capability of 22.4 million net tons. U. S. Steel is headquartered in Pittsburgh, Pennsylvania, with operations across the United States and in Central Europe.

Big River Steel is part of U.S. Steel Corporation and is the only steel production facility to be LEED (Leadership in Energy and Environment Design) certified.

Harju Elekter UAB provides detail engineering, contract manufacturing and full load testing services for marine and industrial system integrators.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. A portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the Group’s revenue for 2021 was 152 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Additional information:
Tomas Prūsas
Managing Director of Harju Elekter UAB
+37068746399

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

Harju Elekter Group financial results, 1-12/2021

Commentary from the Management

Harju Elekter’s orders and sales volumes, which started to increase in the second half of the year, continued to grow strongly in the fourth quarter. Sales volumes in the last quarter increased by more than 7 million euros, or by a fifth, year-on-year, helping to exceed both the revenue of 2020 and the 150-million-euro mark. Revenue of 152 (2020: 147) million euros exceeds the turnover record achieved by the Group last year.

Despite the growth of volumes, the year as a whole continues to be characterised by shortages of raw materials and components, record prices and low availability which, in turn, led to constant rescheduling in production and delays in customer orders. Although the sheet metal shortage had largely eased by the fourth quarter, the fall in raw material prices could not yet be felt and, combined with the readjustments in production mentioned above, it was not possible to achieve satisfactory profitability.

The objective for 2022 is to achieve sustainable profitability, which will be possible thanks to the downward trend in raw material prices, improved component availability and strong customer relationships. Effective work by the sales department in price negotiations with customers also provides an opportunity for improvement. Obstacles and risks include the ongoing pandemic situation, tensions between major economies and growing competition for skilled labour which, in turn, is creating strong wage pressures.

Revenue, Expenses, and Profit

The revenue of the Group was 43.6 (Q4 2020: 35.2) million euros in the fourth quarter, increasing by 23.6% compared to the comparable period. Revenue increased in all areas of business activity, but the main contribution came from the sale of electrical equipment, which was 35.6 (Q4 2020: 30.2) million euros. This was mainly due to the increase in the volume of orders from the framework contracts. Despite serious challenges, Harju Elekter’s revenue for the year grew by 4.2% year-on-year, to 152.8 (2020: 146.6) million euros, exceeding previous record sales volumes. The revenue from electrical works in the shipbuilding sector increased the most, totaling 6.0 (2020: 4.2) million euros. The revenue of electrical equipment increased by 1.5 million to 126.7 million euros in a year comparison.

 EUR’000   Q4 Q4 +/- 12m 12m +/-
    2021 2020 Q/Q 2021 2020 12m/12m
Revenue 43,561 35,243 23.6% 152,757 146,614 4.2%
Gross profit 4,703 5,585 -15.8% 17,880 21,209 -15.7%
EBITDA 1,939 2,400 -19.2% 7,221 10,340 -30.2%
Operating profit (EBIT) 853 1,335 -36.1% 3,202 6,546 -51.1%
Profit for the period 894 1,159 -22.9% 2,610 5,528 -52.8%
Incl. attributable to owners of the parent 888 1,165 -23.8% 2,598 5,563 -53.3%
Earnings per share (EPS) (euros) 0.05 0.07 -23.8% 0.15 0.31 -53.3%

The Group’s core business, Production, accounted for 87.4% of the Group’s revenue in the reporting quarter and in twelve months. The revenue of the production segment increased both by quarter and by year: 7.4 million to 37.7 million euros and by 8.0 million to 133.5 million euros, respectively. The biggest challenges for manufacturing companies came from supply shortages of missing components that were required in projects. A number of large orders were pending, and production cycles had to be reorganised on an ongoing basis.

Sales to the Estonian market remained practically at the same level in the reporting quarter, totalling 6.5 million euros. Revenue increased by 2.5 million to 26.0 million euros in year comparison, accounting for 17.0% (2020: 16.0%) of the Group’s revenue. The growth mainly came from the production and supply of prefabricated substations.

The Group’s revenue in Finland was 17.9 million euros in the reporting quarter (Q4 2020: 13.8). The increase in revenue in the last quarter was affected by the postponement of orders from the beginning of the year to the second half of the year, due to both the cold winter at the beginning of the year and supply difficulties resulting from material shortages. All in all, year-on-year revenue in the Finnish market increased by 2.2 million, to 70.9 million euros. During the reporting year, 46.4% (2020: 46.9%) of the Group’s products and services were sold to the Group’s largest market, Finland.

The revenue earned from the Swedish market increased both in the reporting quarter and yearly comparison, amounting to 10.4 (Q4 2020: 9.1) and 27.6 (2020: 26.5) million euros, respectively. In the second half of the year, the production and supply of substations for new framework contract continued at an accelerated pace. Sweden is the Group’s second largest market, accounting for 18.1% of the Group’s revenue during the year as well as in the previous period. The Group sees market potential in Sweden and is making investments to increase the business activity.

Sales to the Norwegian market continued to recover in the fourth quarter. The Group sold products and services worth 4.2 (Q4 2020: 2.8) million euros to the Norwegian market. In 2021, the Norwegian market generated revenues of 13.2 million euros (2020: 16,7). The decrease in Norwegian revenue was due to record high orders in the reference period, as well as the slow pace of recovery in the maritime industry. The Norwegian market accounted for 8.6% (2020: 11.4%) of the reporting year revenue.

Investments

During 2021, the Group invested a total of 7.7 (2020: 8.1) million euros in non-current assets, incl 1.3 (2020: 3.1) million euros in investment properties, 5.7 (2020: 4.6) million euros in property, plant, and equipment and 0.7 (2020: 0.3) million euros in intangible assets. The Group directed the majority of the investments during the reporting period, i.e. 2.5 million euros, to the expansion of the Lithuanian plant, which was completed in the summer. The total cost of the investment was 5.5 million euros. In addition, preparations for the construction of the production and storage complex in the Allika Industrial Park, Laohotell III, were launched and investments were made in production technology and in solar power plants. In connection with the expansion of the production of the Elektra electric vehicle chargers in Finland, an additional production area of 1,140 m2 was acquired in the reporting quarter in Ulvila, near the current production facilities. As of the reporting date, the total value of the Group’s non-current financial investments was 25.2 (31.12.20: 11.9) million euros. The net gain on the revaluation of financial assets in the reporting quarter was 3.9 million euros and in the reporting year 12.3 million euros. During 2021 one million euros was received from the partial sale of securities, of which the realized profit was 0.3 million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 7.44 euros. As at 31 December 2021, AS Harju Elekter had 9,387 shareholders. The number of shareholders increased during the reporting quarter by 448 members.

Dividend Proposal

In coordination with the Supervisory Board, the Group’s Management Board will propose to pay dividends to the shareholders 0.14 euros per share, totalling 2.5 million euros and representing 97% of consolidated net profit in 2021.

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 31

December 2021

31

December 2020

ASSETS
Current assets
Cash and cash equivalents 574 2,843
Trade and other receivables 33,689 27,226
Prepayments 1,844 820
Inventories 27,437 18,856
Total current assets 63,544 49,745
Non-current assets
Deferred income tax assets 690 514
Non-current financial investments 25,222 11,918
Investment properties 23,903 23,605
Property, plant, and equipment 26,654 22,494
Intangible assets 7,544 7,199
Total non-current assets 84,013 65,730
TOTAL ASSETS 147,557 115,475
LIABILITIES AND EQUITY
Liabilities
Borrowings 16,912 12,056
Prepayments from customers 4,659 4,182
Trade and other payables 24,490 15,837
Tax liabilities 3,156 2,871
Current provisions 35 34
Total current liabilities 49,252 34,980
Borrowings 11,426 7,032
Other non-current liabilities 33 66
Total non-current liabilities 11,459 7,098
TOTAL LIABILITIES 60,711 42,078
Equity
Share capital 11,352 11,176
Share premium 1,601 804
Reserves 18,716 6,709
Retained earnings 55,315 54,858
Total equity attributable to the owners of the parent company 86,984 73,547
Non-controlling interests -138 -150
Total equity 86,846 73,397
TOTAL LIABILITIES AND EQUITY 147,557 115,475

 

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Unaudited
EUR’000 Q4 Q4 12m 12m
2021 2020 2021 2020
Revenue 43,561 35,243 152,757 146,614
Cost of sales -38,858 -29,658 -134,877 -125,405
Gross profit 4,703 5,585 17,880 21,209
Distribution costs -1,260 -2,208 -5,259 -5,847
Administrative expenses -2,655 -2,140 -9,703 -9,259
Other income 114 213 513 707
Other expenses -49 -115 -229 -264
Operating profit 853 1,335 3,202 6,546
Finance income 57 21 129 137
Finance costs -101 -110 -353 -379
Profit before tax 809 1,246 2,978 6,304
Income tax 85 -87 -368 -776
Profit for the period 894 1,159 2,610 5,528
Profit attributable to:
    Owners of the parent company 888 1,165 2,598 5,563
    Non-controlling interests 6 -6 12 -35
Earnings per share
   Basic earnings per share (EUR) 0.05 0.07 0.15 0.31
   Diluted earnings per share (EUR) 0.05 0.07 0.14 0.31

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR’000 Q4 Q4 12m 12m
2021 2020 2021 2020
Profit for the period 894 1,159 2,610 5,528
Other comprehensive income
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries -44 128 -57 112
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 265 80
   Net gain/loss (-) on revaluation of financial assets 3,900 3,669 12,269 2,922
Total comprehensive income for the period 3,856 3,797 12,477 3,114
Other comprehensive income 4,750 4,956 15,087 8,642
Total comprehensive income attributable to:
   Owners of the Company 4,744 4,962 15,075 8,677
   Non-controlling interests 6 -6 12 -35

Harju Elekter Interim Report Q4 2021

Tiit Atso
Chairman of the Management Board
+372 674 7400

Subsidiary of Harju Elekter increases its holding in Finnish electric car charging software company

Harju Elekter Oy, a subsidiary of AS Harju Elekter, is increasing its holding in IGL-Technologies Oy, a technology company engaged in the development of control systems for parking and electric vehicle charging stations. The 5.5% holding in the company was acquired in June 2021. The additional holding transactions will be carried out in two parts, the first of which will take effect in February 2022 and the second during the first half of the year. As a result of the transactions, the total holding will increase to 10%. The cost of the additional investment is approximately 234,000 euros.

With the additional investment to increase its holding, Harju Elekter sees an opportunity to strengthen the Group’s activities in the field of e-mobility and to further support the fulfilment of its sustainable goals. In cooperation with IGL-Technologies Oy, Harju Elekter will continue to improve the availability of complete packages for electric car charging systems and expand the network in both the Nordic and Baltic markets.

The Finnish subsidiary of Harju Elekter Group, Harju Elekter Oy, has collaborated with IGL-Technologies successfully for more than ten years and installed over 30,000 electric vehicle charging stations in Finland alone. In addition, more than 50 charging stations have been established in the Baltics, 10 of which have been added to Estonia. The role of Harju Elekter in the partnership has been the development, production, and sales of charging equipment hardware and the provision of technologically suitable software and operation of equipment at IGL.

IGL-Technologies is the Finnish leading developer and provider of parking and e-mobility solutions in Finland. The company’s product range includes unique Finnish combined remotely-controlled charging and parking systems, eTolppa and eParking, with more than 125,000 users.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. A portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 900 specialists, and the Group’s sales revenue for Q3 2021 was 109 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Publication of Financial Reports in 2022

AS Harju Elekter wishes to the shareholders Happy New Year and informs that in the year 2022, the consolidated financial results of AS Harju Elekter will be published as following:

2021 Q4 results 23 February 2022
2022 Q1 results 27 April 2022
2022 Q2 results 27 July 2022
2022 Q3 results 26 October 2022

The Annual General Meeting will be held on 28 April 2022.

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.com.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate communications manager
+372 53408444
marit.tack@harjuelekter.com

Harju Elekter Group consolidated financial results, 1-9/2021

Harju Elekter’s last quarter showed a strong recovery in sales volumes and orders, but full operation was held back by the global shortage of raw materials. Uncertainty in the supply of raw materials that have become more expensive leads to the need for constant rescheduling, which is inefficient and costly. This has an impact on the Group’s financial results and profitability. Harju Elekter continues with investments to come out of the crisis stronger than when we entered it. In order to expand the business, Harju Elekter decided to invest in new factories in Sweden. The Group sees market potential in Sweden and investments help to increase the competitiveness of our Swedish company in different business areas. Harju Elekter is deeply engaged in becoming a major player in the Swedish electrification and automation market.

Revenue, Expenses, and Profit

The revenue of the Group was 42.2 (Q3 2020: 37.4) million euros in the third quarter, increasing by 12.9% compared to the comparable period. In the reporting quarter revenue increased in all areas of business activity, but the main contribution came from the sale of electrical equipment, which was 35.2 (Q3 2020: 31.7) million euros. This is mainly due to the increase in the volume of orders in the framework contracts. The revenue for the nine months decreased by 2.0% to 109.2 (9M 2020: 111.4) million euros compared to the comparable period. The manufacturing and sale of electrical equipment decreased the most, amounting to 91.0 (2020 9m: 95.0) million euros. At the same time, the revenue from the electrical works in the shipbuilding sector increased by 1.4 million to 4.3 million euros in a nine-month comparison. Fulfilling orders depends to a large extent on the global situation, where the availability of materials and components has deteriorated.

 

 EUR’000   Q3 Q3 +/- 9m 9m +/-
    2021 2020 Q3/Q3 2021 2020 9m/9m
Revenue 42,168 37,360 12.9% 109,195 111,372 -2.0%
Gross profit 5,026 5,234 -4.0% 13,177 15,625 -15.7%
EBITDA 2,158 2,913 -25.9% 5,281 7,939 -33.5%
EBIT 1,183 2,002 -40.9% 2,350 5,211 -54.9%
Profit for the period 931 1,694 -45.0% 1,716 4,369 -60.7%
 Incl. attributable to owners of the parent company 915 1,691 -45.9% 1,710 4,398 -61.1%
Earnings per share (euros) 0.05 0.10 -46.5% 0.10 0.25 -61.3%

The total operating expenses for the reporting quarter were 41.0 (Q3 2020: 35.5) million euros. Costs of sales, which accounted for 89.7% of operating expenses, was 37.1 (Q3 2020: 32.1) million euros. Labour costs increased with quarterly and nine-year comparison, amounting to 7.3 (Q3 2020: 6.6) and 22.3 (9M 2020: 20.0) million euros, respectively. Labour costs were impacted by the hiring of new staff, by the increase in additional work, and by the constant readiness to continue the production cycle. The increase in labour costs and average wages is affected by wage pressures due to workforce shortages in all markets and by the rising share of Finnish and Swedish employees in the Group, as wages in Scandinavian countries are significantly higher than in Estonia and Lithuania.

The gross profit for the reporting quarter was 5,026 (Q3 2020: 5,234) thousand euros and the gross profit margin was 11.9% (Q3 2020: 14.0%). Quarterly operating profit (EBIT) amounted to 1,183 (Q3 2020: 2,002) thousand euros. The operating margin for the second quarter was 2.8% (Q3 2020: 5.4%).

The net profit for the reporting quarter was 931 (Q3 2020: 1,694) thousand euros of which the share of the owners of the parent company was 915 (Q3 2020: 1,691) thousand euros. The earnings per share were 0.05 (Q3 2020: 0.10) euros. While in the previous quarters there were problems with the sheet metal deficit and price increase, then in the reporting quarter the price of electricity increased and the supply difficulties of several other materials and main components and the pressure of rising price increased. Profitability was also affected by higher labour costs due to the hiring of new specialists.

Core Business and Markets

The Group’s core business, Production, accounted for 87.7% of the Group’s revenue in the reporting quarter as well as in the nine months. Postponement of orders from previous quarters to the third quarter increased the Production segment’s revenue year-on-year by 4.9 million euros to 37.0 million euros. In a nine-month comparison, the revenue of the Production segment remained at the same level, being 95.8 (9M 2020: 95.3) million euros.

Sales to the Estonian market remained practically at the same level in the reporting quarter, totalling 7.5 (Q3 2020:7.6) million euros in a year-on-year comparison. The revenue increased by 2.5 million euros to 19.5 million euros in nine-month comparison, accounting for 17.8% (9M 2020: 15.3%) of the Group revenue. Revenue was mainly earned from the production of prefabricated substations and retail and project-based sale of electrical products.

The Group’s revenue in Finland was 20.0 million euros in the reporting quarter. This is 3.6 million euros more than in the previous year and a historically a record result in the Finnish market when comparing third quarters. Production of the Finnish power grid companies comprised the greater part of the sales volume. In a nine-month comparison, the revenue of the Finnish market was lower than in the previous period, being 53.0 (9M 2020: 54.9) million euros. This was mostly affected by the decrease in orders caused by the snowy and cold winter, commencing with new long-term orders, but also some supply difficulties and shortage in materials. During the nine months, 48.6% (9M 2020: 49.3%) of the Group’s products and services were sold to the Group’s largest market, Finland.

The revenue earned from the Swedish market decreased slightly compared to both the reporting quarters and the nine months, amounting 5.8 (Q3 2020: 6.6) and 17.2 (Q3 2020: 17.5) million euros, respectively. The production and supply of substations for new framework contracts has been started. Sweden, the third largest market in the Group, accounted for 15.8% (9M 2020: 15.7%) of revenue in the nine months. The Group sees market potential in Sweden and is making investments to increase the revenue.

Sales to the Norway market are gradually recovering. In the third quarter, the Group sold products and services worth 5.1 (Q3 2020: 4.2) million euros to the Norwegian market. During the nine months, 9.0 million euros were earned from the Norwegian market, which was 5.0 million euros less than in the same period of the previous year. The decrease in Norwegian revenue was due to record high orders in the reference period, as well as the slow pace of recovery in the maritime industry. The Norwegian market accounted for 8.2% (9M 2020: 12.5%) of the nine-month revenue.

Investments

During the reporting period, the Group invested a total of 5.0 (9M 2020: 4.1) million euros in non-current assets, incl 0.5 (9M 2020: 2.1) million euros in investment properties, 4.0 (9M 2020: 1.8) million euros in property, plant, and equipment and 0.5 (9M 2020: 0.2) million euros in intangible assets. The Group directed the majority of the investments during the reporting period, i.e. 2.5 million euros, to the fourth phase of expansion of the Lithuanian subsidiary. The total cost of the investment was 5.5 million euros. In addition, Harju Elekter launched the preparations for the construction of the production and storage complex in the Allika Industrial Park, Laohotell III, and made investments in production technology and in solar power plants. As of the reporting date, the total value of the Group’s non-current financial investments was 21.3 (31.12.20: 11.9) million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 7.98 euros. As at 30 September 2021, AS Harju Elekter had 8,939 shareholders. The number of shareholders increased during the reporting quarter by 986.

Additional 278,675 shares were issued under the framework of the stock option plan for the employees of Harju Elekter and as of 2 August 2021, a total of 18,018,555 shares of AS Harju Elekter are traded.

 

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 30 September

2021

31 December 2020
ASSETS
Current assets
Cash and cash equivalents 997 2,843
Trade and other receivables 32,467 27,226
Prepayments 1,601 820
Inventories 26,150 18,856
Total current assets 61,215 49,745
Non-current assets
Deferred income tax assets 572 514
Non-current financial investments 21,321 11,918
Investment properties 23,369 23,605
Property. plant and equipment 24,750 22,494
Intangible assets 7,467 7,199
Total non-current assets 77,479 65,730
TOTAL ASSETS 138,694 115,475
LIABILITIES AND EQUITY
Liabilities
Borrowings 12,585 12,056
Prepayments from customers 4,958 4,182
Trade and other payables 23,830 15,837
Tax liabilities 2,870 2,871
Current provisions 93 34
Total current liabilities 44,336 34,980
Borrowings 12,252 7,032
Other non-current liabilities 63 66
Total non-current liabilities 12,315 7,098
TOTAL LIABILITIES 56,651 42,078
Equity
Share capital 11,352 11,176
Share premium 1,601 804
Reserves 14,807 6,709
Retained earnings 54,427 54,858
Total equity attributable to the owners of the parent company 82,187 73,547
Non-controlling interests -144 -150
Total equity 82,043 73,397
TOTAL LIABILITIES AND EQUITY 138,694 115,475

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Unaudited
EUR’000 Q3 Q3 9m 9m
2021 2020 2021 2020
Revenue 42,168 37,360 109,195 111,372
Cost of sales -37,142 -32,126 -96,018 -95,747
Gross profit 5,026 5,234 13,177 15,625
Distribution costs -1,469 -1,150 -3,999 -3,639
Administrative expenses -2,393 -2,225 -7,048 -7,119
Other income 39 167 400 494
Other expenses -20 -24 -180 -150
Operating profit 1,183 2,002 2,350 5,211
Finance income 3 8 71 116
Finance costs -95 -122 -252 -269
Profit before tax 1,091 1,888 2,169 5,058
Income tax -160 -194 -453 -689
Profit for the period 931 1,694 1,716 4,369
Profit attributable to:
    Owners of the parent company 915 1,691 1,710 4,398
    Non-controlling interests 16 3 10 -29
Earnings per share
   Basic earnings per share (EUR) 0.05 0.10 0.10 0.25
   Diluted earnings per share (EUR) 0.05 0.10 0.10 0.25

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR’000 Q3 Q3 9m 9m
2021 2020 2021 2020
Profit for the period 931 1,694 1,716 4,369
Other comprehensive income
Items that may be reclassified to profit or loss
   Impact of exchange rate changes of a foreign subsidi­aries -8 -2 -13 -16
Items that will not be reclassified to profit or loss
   Gain on sales of financial assets 0 0 265 80
   Net gain/loss (-) on revaluation of financial assets 49 98 8,369 -747
Total comprehensive income for the period 41 96 8,621 -683
Other comprehensive income 972 1,790 10,337 3,686
Total comprehensive income attributable to:
   Owners of the Company 956 1,787 10,331 3,715
   Non-controlling interests 16 3 6 -29

Interim Report Q3 2021

Tiit Atso
Chairman of the Board
+372 674 7400

Harju Elekter takes the next step in Sweden

The Harju Elekter Group, with 100% ownership of Harju Elekter AB, is continuing its expansion in Sweden. Group CEO Tiit Atso says, “Both the Group and all our co-workers in Sweden are deeply engaged in becoming a major player in the Swedish electrification and automation markets.” To achieve this, good products, a high level of competence and a strong organization backed by efficient logistics and production are needed.

One of the actions to further strengthen its presence in Sweden includes the centralisation of inventory and production resources. This means that the current operation in Malmö will move to new larger and more suitable premises in the harbour area in Malmö in August 2022. The operations in Borlänge, Grytgöl and Stockholm will be transferred to a completely new, wholly-owned facility in Västerås, with a total office and production area of some 6 000 m². Parts of the operations in Stockholm will remain but move to new premises.

Certain project management and electrical design resources and part of the Swedish Management Team have been in Västerås since February this year. They will also transfer to a new facility in Västerås, which is expected to be ready for occupancy sometime in Q4, 2022.

For the Malmö operations, the focus going forward will be on low and medium voltage switchgear and a new area, industrial automation solutions. In Västerås, the focus will be on panels, switchgear and technical and fibre shelters. FAT testing will be performed at both sites. The Västerås facility will also function as a temporary storage facility for products from other Harju Elekter production facilities on their way to sites in Sweden.

Mikael Schwartz Jonsson, Managing Director of the Swedish operations believes these investments will help to increase their competitiveness within different areas of activities. “Our focus on project business and delivery of solutions, where installation and commissioning are included, requires efficient design and production resources in Sweden, which we have now strengthened significantly,” Mikael concludes.

Harju Elekter to conclude a share purchase agreement for shares in the company founded to build the Västerås plant

On 13 September 2021, AS Harju Elekter published a stock exchange release in which it announced the restructuring of its Swedish operations, the establishment of new plants, and the signing of a letter of intent for the acquisition of shares in the subsidiary of LC Development Fastigheter 101 AB that belongs to Wästbygg Group.

Yesterday, 4 October 2021, Harju Elekter AB, a subsidiary of AS Harju Elekter, concluded an agreement with LC Development Fastigheter 101 AB, a subsidiary of Wästbygg Gruppen AB, in order to acquire 100% of the shares of LC Development Fastigheter 17 AB. The estimated value of the transaction is EUR 9.8 million (SEK 100 million). The transaction value will be detailed after the completion of the building, and the price will be adjusted under the terms and conditions and in accordance with the procedure established in the agreement. The proposed initial closing date of the transaction is 1 November 2022.

LC Development Fastigheter 17 AB has been established in 2021 for the Harju Elekter plant to be built in Västerås and it manages real estate and construction related matters.

The Wästbygg Group is a construction and project development company with operations in the most rapidly expanding markets in Sweden. The company, which is listed on Nasdaq Stockholm, builds and develops residential, commercial buildings and community service properties, as well as logistics and industrial facilities – always with a strong focus on sustainability. In 2020, the company had a revenue of about SEK 3,8 billion and 310 employees.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenues for the first six months 2021 were 67,0 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

For the purposes of the regulations of the Nasdaq Tallinn Stock Exchange, this transaction is not a transaction between related parties.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Additional information:
Mikael Schwartz Jonsson
Managing Director of Harju Elekter AB
+46 73 870 01 51

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com

Harju Elekter to restructure its operations and establish new plants in Sweden

Harju Elekter has decided to centralise production in Sweden by moving the various units of the Swedish subsidiary to Västerås and Malmö, as well as establish new plants in these locations in order to expand its business activities. As a result of the decision, Harju Elekter AB signed a letter of intent and a lease agreement today, on 13 September, for the establishment of an office and production building in Västerås and for a new production building to be constructed in Malmö, respectively.

In order to lease the 3,000 m2 building in Malmö, which will be completed by the end of 2022, a ten-year lease agreement was entered into with Nyfosa AB. For the purpose of establishing the 6,000 m2 building in Västerås, a letter of intent was signed to purchase LC Development Fastigheter 17 AB, currently a wholly owned subsidiary of Wästbygg Gruppen AB. LC Development Fastigheter 17 AB will be charged with the management of issues related to property and construction. The letter of intent is valid only if the Real Estate Council of the City of Västerås agrees to sell a specific plot of land to LC Development Fastigheter 17 AB for the establishment of the plant. The acquisition of the company’s shares is planned to be completed no later than 1 November 2022. Both production buildings will be established by Wästbygg Gruppen AB for Harju Elekter.

The concentration of Harju Elekter AB’s operations in Malmö and Västerås will ensure more efficient production, lower logistics costs, and better security of supply for customers, serving as a prerequisite for profitable growth in Sweden.

Nyfosa AB is a transaction-based property company that creates value by accumulating sustainable cash flows and continuously evaluating new business opportunities. Nyfosa’s shares have been listed on Nasdaq Stockholm since 2018.

The Wästbygg Group is a construction and project development company with operations in the most rapidly expanding markets in Sweden. The company, which is listed on Nasdaq Stockholm, builds and develops residential, commercial buildings and community service properties, as well as logistics and industrial facilities – always with a strong focus on sustainability. In 2020, the company had a revenue of about SEK 3,8 billion and 310 employees.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenues for the first six months 2021 were 67,0 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com

Harju Elekter Group consolidated financial results, 1-6/2021

The second quarter of Harju Elekter can be characterised by forward-looking investments and the intensification of the global raw material deficit, which has an impact on the Group’s financial results and profitability. Execution of orders for new framework contracts has begun, and sales volumes in Estonia and Sweden are on an upward trend. Orders for the Lithuanian unit have not yet returned to pre-crisis levels, but the number of incoming inquiries has grown to a record high, giving reason to hope for a recovery in the maritime industry in the near future. In the second quarter, the Group established a forward-looking cooperation with the technology company IGL-Technologies Oy and continued to invest in Skeleton Technologies Group OÜ. Preparations were also made for the construction of the new production and storage complex and for increasing the portfolio of solar power plants.

Revenue, Expenses, and Profit

The revenue of the Group was 36.3 million euros in the second quarter, which was 2.7 million euros more modest compared to the second quarter of 2020. As in the first quarter, revenue from the manufacturing and sales of electrical equipment in the second quarter was affected by deferred orders, supply difficulties and material shortages. In the first six months, the revenue was 67.0 (6M 2020: 74.0) million euros, which is below the record result of the previous year but is comparable to the normal sales two years ago before the crisis. Despite the uncertainty in the economic environment, the volume of new orders and cooperation with important customers with framework agreements have persisted.

 EUR’000   Q2 Q2 +/- 6M 6M +/-
    2021 2020 Q2/Q2 2021 2020 6M/6M
Revenue 36,310 39,014 -6.9% 67,028 74,012 -9.4%
Gross profit 4,306 5,468 -21.3% 8,151 10,391 -21.6%
EBITDA 1,638 3,084 -46.9% 3,124 5,027 -37.9%
Operating profit (EBIT) 651 2,156 -69.8% 1,168 3,209 -63.6%
Profit for the period 488 1,971 -75.2% 785 2,674 -70.6%
 Incl. attributable to owners of the parent company 485 1,979 -75.5% 795 2,708 -70.6%
Earnings per share (euros) 0.03 0.11 -75.5% 0.04 0.15 -70.6%

The total operating expenses for the reporting quarter were 35.8 (Q2 2020: 37.1) million euros. Costs of sales decreased by 1.5 million euros to 32.0 million euros year-on-year, accounting for 89.5% of the operating expenses. Labour costs increased with quarterly and half-year comparison, amounting to 7.6 (Q2 2020: 6.7) and 14.9 (6M 2020: 13.4) million euros, respectively. The majority of the increase in labour costs was due to the increase in additional work, the constant readiness to continue the production cycle, and in terms of Lithuania, working in several shifts in production as a measure to prevent the spread of coronavirus. The increase in labour costs and average remuneration was affected most by the increase of the proportion of Swedish and Finnish employees in the Group, since wage levels are significantly higher in Scandinavian countries than they are in Estonia and Lithuania.

The gross profit for the reporting quarter was 4,306 (Q2 2020: 5,468) thousand euros and the gross profit margin was 11.9% (Q2 2020: 14.0%). Quarterly operating profit (EBIT) amounted to 651 (Q2 2020: 2,156) thousand euros. The operating margin for the second quarter was 1.8% (Q2 2020: 5.5%).

The net profit for the reporting quarter was 488 (Q2 2020: 1,971) thousand euros of which the share of the owners of the parent company was 485 (Q2 2020: 1,979) thousand euros. The earnings per share were 0.03 (Q2 2020: 0.11) euros. Compared to the previous year, the low profitability of the reporting period was mainly affected by lower-than-planned sales, the continuing global shortage of materials, and the increase in labour costs. The rapid rise in the price of production materials and the difficulty of accessing them caused inefficiencies in operations where the products could not be manufactured according to the planned time.

Core Business and Markets

The Group’s core business, Production, accounted for 88% of the Group’s six months revenue. Delays in beginning with new framework contract orders, the postponement of planned volumes and limited availability of raw materials reduced the revenue of the production segment by 1.5 million euros to 31.6 million euros on a quarterly comparison and by 4.4 million euros to 58.8 million euros on a six-month comparison.

Quarterly sales to the Estonian market increased by 1.1 million to 6.9 million euros in a year-on-year comparison and by 2.6 million euros to 12.0 million euros in six months comparison, accounting for 18% (6M 2020: 13%) of the six-month revenue. During the reporting quarter the Group continued the production and delivery of prefabricated substations that began in Q2 2020 under the Elektrilevi OÜ framework procurement.

Sales to the Finnish market are recovering. Compared to the second quarter of the previous year, the revenue decreased only by 0.6 million euros, amounting to 18.4 million euros. Compared to the first half of last year, the change is larger, revenue decreased by 5.5 million euros to 33.0 million euros. This was mostly affected by the decrease in orders caused by the snowy and cold winter, commencing with new long-term orders, but also some supply difficulties and shortage in materials. In the first half of the year, 49% (6M 2020: 52%) of the Group’s products and services were sold to the Group’s largest market, Finland.

The revenue earned from the Swedish market showed an upward trend in the reporting quarter and in the half year as compared to previous year, amounting 6.1 (Q2 2020: 5.9) and 11.5 (Q2 2020: 10.9) million euros, respectively. Sweden accounted for 17% (6M 2020: 15%) of revenue in the first half of the year, being the third largest market in the Group.

In the second quarter, the Group’s products, and services worth 2.0 (Q2 2020: 4.4) million euros were sold to the Norwegian market. In the first six months, 3.9 million euros were earned from the Norwegian market, which was 60.5% or 5.9 million euros less than in the same period of the previous year. The decrease in Norwegian revenue was due to record high orders in the reference period, as well as the slow pace of recovery in the maritime industry. The Norwegian market accounted for 6% (6M 2020: 13%) of the six-month revenue.

Investments

During the reporting period, the Group invested a total of 3.9 (6M 2020: 2.2) million euros in non-current assets, incl 0.2 (6M 2020: 1.3) million euros in investment properties, 3.5 (6M 2020: 0.8) million euros in property, plant, and equipment and 0.2 (6M 2020: 0.1) million euros in intangible assets. The majority of the investments during the reporting period, i.e. 2.5 million euros, was directed to the expansion of the fourth phase of the production and office building of the Lithuanian subsidiary. The total cost of the investment was 5.5 million euros. In addition, preparations for the construction of the production and storage complex in the Allika Industrial Park, Laohotell III, were launched and investments were made in production technology.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 8.18 euros. As at 30 June 2021, AS Harju Elekter had 7,983 shareholders. The number of shareholders increased during the reporting quarter by 596.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 30 June

2021

31 December 2020
ASSETS
Current assets
Cash and cash equivalents 1,576 2,843
Trade and ohter receivables 27,215 27,226
Prepayments 1,366 820
Inventories 24,623 18,856
Total current assets 54,780 49,745
Non-current assets
Deferred income tax assets 575 514
Non-current financial investments 21,259 11,918
Investment properties 23,328 23,605
Property. plant and equipment 24,879 22,494
Intangible assets 7,224 7,199
Total non-current assets 77,265 65,730
TOTAL ASSETS 132,045 115,475
LIABILITIES AND EQUITY
Liabilities
Borrowings 15,292 12,056
Prepayments from customers 1,919 4,182
Trade and other payables 22,208 15,837
Tax liabilities 2,946 2,871
Current provisions 73 34
Total current liabilities 42,438 34,980
Borrowings 9,469 7,032
Other non-current liabilities 65 66
Total non-current liabilities 9,534 7,098
TOTAL LIABILITIES 51,972 42,078
Equity
Share capital 11,176 11,176
Share premium 804 804
Reserves 15,173 6,709
Retained earnings 53,080 54,858
Total equity attributable to the owners of the parent company 80,233 73,547
Non-controlling interests -160 -150
Total equity 80,073 73,397
TOTAL LIABILITIES AND EQUITY 132,045 115,475

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Unaudited
EUR’000 Q2 Q2 6m 6m
2021 2020 2021 2020
Revenue 36,310 39,014 67,028 74,012
Cost of sales -32,004 -33,546 -58,877 -63,621
Gross profit 4,306 5,468 8,151 10,391
Distribution costs -1,315 -1,180 -2,529 -2,488
Administrative expenses -2,437 -2,333 -4,654 -4,895
Other income 188 275 360 327
Other expenses -91 -74 -160 -126
Operating profit 651 2,156 1,168 3,209
Finance income 51 71 68 108
Finance costs -60 -46 -158 -147
Profit before tax 642 2,181 1,078 3,170
Income tax -154 -210 -293 -496
Profit for the period 488 1,971 785 2,674
Profit attributable to:
    Owners of the parent company 485 1,979 795 2,708
    Non-controlling interests 3 -8 -10 -34
Earnings per share
   Basic earnings per share (EUR) 0.03 0.11 0.04 0.15
   Diluted earnings per share (EUR) 0.03 0.11 0.04 0.15

Interim Report Q2 2021

Tiit Atso
Chairman of the Board
+372 674 7400

Increase of Share Capital in Connection with Realization of the Employee Option Programme and Subscription Results

The Supervisory Board of AS Harju Elekter decided to increase the share capital of the company by EUR 175,565.25 by issuing new ordinary shares. The increase of the share capital was triggered by the need to issue new shares to the key persons of Harju Elekter Group, incl. the members of the governing bodies, leading specialists, and engineers, participating in the option program approved with the resolution of the general meeting on 3 May 2018.

A total of 96 current and former employees of Harju Elekter participated in the issue of AS Harju Elekter shares, subscribing a total of 278,675 shares for a total of EUR 972,575.75. The share issue was thus subscribed 100% by the option beneficiaries.

Decisions of the Supervisory Board of AS Harju Elekter:

1.Harju Elekter’s share capital will be increased by a maximum of EUR 175,565.25, i.e., from EUR 11,176,124.40 to EUR 11,351,689.65.

2. The share capital will be increased by way of issuing new shares (ISIN: EE3100004250). During the increase of the share capital to issue up to 278,675 new ordinary shares of Harju Elekter, with a book value of 0,63 euros per share. The increase of the share capital and payment for the new shares will be carried out fully by way of monetary contribution. The shares will be issued with a share premium. The issue price is EUR 3.49 per share, with a book value of the share amounting to EUR 0.63 and the share premium to EUR 2.86.

3. After the increase of the share capital, Harju Elekter has a total of 18,018,555 ordinary shares without nominal value. The increase of Harju Elekter’s share capital will not create any exceptions or special rights in connection with the Bank’s ordinary shares. The new shares to be issued during the increase of share capital shall grant the right to dividend for the financial year started on 1 January 2021.

4. Pursuant to the resolution of the general meeting of 3 May 2018, which approved Harju Elekter’s share option programme and its basic conditions, the 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 determined by Harju Elekter’s Supervisory Board and with whom Harju Elekter has concluded the relevant option agreements shall have the pre-emptive right to subscribe Harju Elekter’s new shares. Harju Elekter’s shareholders, who are not intended to benefit from share option programme approved with the resolution of the general meeting of 3 May 2018, shall not have any pre-emptive right to subscribe Harju Elekter’s shares within the framework of the increase of the share capital.

5. The due date for exercising the pre-emptive right of subscription and the due date for subscribing shares was 16 July 2021. All of the option beneficiaries submitted their subscription notes in a timely manner and made payments for the subscribed shares.

All new shares issued by AS Harju Elekter within the framework of the issue of shares will be listed on the Nasdaq Tallinn Stock Exchange on the day after the day when Harju Elekter has notified Nasdaq Tallinn about the registration of increase of share capital in commercial register.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for Q1 2021 was 30.7 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer

+372 674 7413

AS Harju Elekter to invest in Skeleton Technologies Group OÜ

AS Harju Elekter participated in the additional round of equity raising for Skeleton Technologies Group OÜ with an investment of 1.24 million euros. Already existing investors participated in the investment round. Following the increase in the share capital of Skeleton Technologies OÜ, the registered holding of AS Harju Elekter is 7.22%.

AS Harju Elekter continues to perceive the attractiveness of the given investment in terms of the growth of the value of Skeleton and in cooperation in the development, production, and use of modular systems of supercapacitors in electricity control and switching systems.

Skeleton Technologies Group OÜ is Europe’s leading manufacturer and developer of graphene-based supercapacitors and energy storage systems, with its customers being automotive companies, industrial equipment manufacturers, and leading tram manufacturers.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for Q1 2021 was 30.7 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com

 

Subsidiary of Harju Elekter to acquire a holding in Finnish charging software development company

Harju Elekter Oy, a subsidiary of AS Harju Elekter, signed on 28 June 2021 a contract for the acquisition of a 5.5% holding in the technology company IGL-Technologies Oy, engaged in the development of parking, and charging systems for electric vehicle charging stations. The transaction price is approximately 250,000 euros.

With the investment in the technology development company, Harju Elekter sees an opportunity to strengthen the Group’s activities in the field of e-mobility and, in cooperation with IGL-Technologies Oy, to offer in the near future complete electric vehicle charging system packages at the Nordic as well as Baltic markets even more widely.

The Finnish subsidiary of Harju Elekter Group, Harju Elekter Oy, has collaborated with IGL-Technologies successfully for more than ten years and installed over 20,000 electric vehicle charging stations in Finland alone. In addition, two charging stations have been established in Estonia: one in Ülemiste and one in Tallinn Science Park Tehnopol in Mustamäe. Pilot projects have also been carried out in Latvia and Lithuania. The role of Harju Elekter in the partnership has been the development, production, and sales of charging equipment hardware and the provision of technologically suitable software and operation of equipment at IGL.

IGL-Technologies is the Finnish leading development and arrangement company for charging and parking management systems in Finland. The company’s product range includes unique Finnish combined remotely-controlled charging and parking systems, eTolppa and eParking, with more than 125,000 users.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for Q1 2021 was 30.7 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

The transaction does not constitute an acquisition of a qualifying holding or a transaction with a related party within the meaning of the Rules of the Nasdaq OMX Tallinn Stock Exchange. The members of AS Harju Elekter Supervisory Board and Management Board have no other personal interest in the transaction.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com

Dividend payment ex-date of AS Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 18 May 2021 at the end of the working day of the Nasdaq CSD Estonian settlement system.

Proceeding from the above, the ex-date is 17 May 2021. From that date the new owner of the shares is not entitled to dividends for the year 2020.

AS Harju Elekter will pay dividend 0.16 euros per share on 25 May 2021.

 

Tiit Atso
Chairman of the Management Board /CEO
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Decisions of Annual General Meeting of AS Harju Elekter

The Annual General Meeting of Shareholders of AS Harju Elekter was held on 29 April 2020 starting at 10 a.m., at the LaSpa Conference center at Puhkekodu road 4, Laulasmaa. The AGM was attended by 36 shareholders and their authorised representatives who represented the total of 10 601 232 votes accounting for 59,76 % of the total votes.

The decisions of the General Meeting were as follows:

1. Approval to AS Harju Elekter annual report of 2020

To approve the annual report of AS Harju Elekter of 2020, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 115,475 thousand euros as of 31.12.2020, while the revenue of the financial year was 146,614 thousand euros and net profit 5,528 thousand euros.

The number of the votes given in favor of the resolution was 10,601,232 which accounted for 100.00% of the voted participants.

2. Approval to profit distribution

To approve the profit distribution proposal of AS Harju Elekter of 2020 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2020 49,295,046 euros
total net profit 2020, attributable to owners of the parent company 5,563,389 euros
total retained profit on 31.12.2020 54,858,435 euros
dividends (0,16 euros per share*)  2,838,381 euros
balance carried forward after profit distribution 52,020,054 euros

*The shareholders registered in the shareholders’ registry on 18 May 2021 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 17 May 2021. From that date the new owner of the shares is not entitled to dividends for the year 2020. The dividends will be paid to the shareholders on 25 May 2021 by a transfer to the bank account of the shareholder.

The number of the votes given in favor of the resolution was 10,221,744 which accounted for 96,42% of the voted participants.

3. Amendment of the Articles of Association

Amend the Articles of Association of AS Harju Elekter and approve the new wording of the Articles of Association in the form submitted to the General Meeting.

The number of the votes given in favor of the resolution was 10,549,240 which accounted for 99.51 % of the voted participants.

4. Appointment of the Auditor for the financial years 2021-2023

Appoint AS PricewaterhouseCoopers (registry code 10142876) as the auditor of AS Harju Elekter for the financial years 2021-2023, determine the procedure for remuneration of the Auditor in accordance with the contract to be entered into with the Auditor and grant the Management Board of AS Harju Elekter the right to enter into such a contract. The Auditor has provided consent.

The number of the votes given in favor of the resolution was 10,594,932 which accounted for 99.94 % of the voted participants.

5. Approval of the Stock Option Programme 2021-2022

Approve the Stock Option Programme in the form submitted to the General Meeting and consent to the Supervisory Board of AS Harju Elekter conducting the Stock Option Programme.

The number of the votes given in favor of the resolution was 10,107,919 which accounted for 95.35 % of the voted participants.

Annual Report 2020, Articles of Association and Basic terms and conditions of the AS Harju Elekter Option Programme is provided on www.harjuelekter.com on the General Meeting 2021 site.

The webinar recording of the annual general meeting is found at https://youtu.be/-eAd2fndZng .

Tiit Atso
Chairman of the Management Board
+372 6747 400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group financial results, 1-3/2021

The first quarter at Harju Elekter was a period of preparations for the year: developments were started to fulfil the new framework contracts in Finland and Sweden, the construction of the Lithuanian plant extension reached its final stages, and the full-time operation of the industrial robot was launched. Although revenue increased both in Estonia and Sweden, the decrease in revenue was affected by the postponements of the installation works in the Group’s largest market, Finland. Despite the health and raw materials crisis, the Group did not have to stop production for a single day. The increase in client queries and orders in all operating segments gives reason to believe that a challenging yet fascinating economic cycle awaits after the retreat of the crisis.

Revenue, Expenses, and Profit

The consolidated unaudited revenue for the first quarter of 2021 was 30.7 (Q1 2020: 35.0) million euros, which was 12.2% more modest than in the reference period. In addition to the usual seasonality, the profitability of the quarter was also affected by the postponed instalment works of our customers due to the snowy winter months, which did not have a similar effect in the reference period. The situation was amplified by supply difficulties caused by a shortage of materials.

 

 EUR’000   Q1 Q1 +/-
    2021 2020  
Revenue 30,717 34,998 -12.2%
Gross profit 3,844 4,923 -21.9%
EBITDA 1,485 1,943 -23.5%
Operating profit (EBIT) 516 1,053 -51.0%
Profit for the period 297 703 -57.8%
 Incl. attributable to owners of the parent company 310 728 -57.4%
Earnings per share (EPS) (euros) 0.02 0.04 -57.4%

 

The total operating expenses for the reporting quarter were 30.3 (Q1 2020: 33.9) million euros. The majority of the 10.7% decrease in expenses was due to a decrease in the cost of sales: 3.2 million euros year-on-year. Labour costs increased year-on-year, amounting to 7.3 (Q1 2020: 6.6) million euros. The increase in labour costs and average remuneration was affected most by the increase of the proportion of Swedish employees in the Group, since wage levels are significantly higher in Scandinavian countries than they are in Estonian and Lithuanian companies.

The consolidated gross profit for the reporting quarter was 3,844 (Q1 2020: 4,923) thousand euros and the gross profit margin was 12.5% (Q1 2020: 14.1%). Quarterly consolidated operating profit (EBIT) amounted to 516 (Q1 2020: 1,053) thousand euros. The operating margin for the first quarter was 1.7% (Q1 2020: 3.0%).

The consolidated net profit for the reporting quarter was 297 (Q1 2020: 703) thousand euros of which the share of the owners of the parent company was 310 (Q1 2020: 728) thousand euros. The earnings per share were 0.02 (Q1 2020: 0.04) euros. The lower profitability was a result of increased labour costs, setback on revenue and a sharp increase in the price of raw materials.

Core Business and Markets

The Group’s core business, Production, accounted for 89% of the Group’s consolidated revenue. Beginning with new orders, the usual seasonality and the low availability of raw materials decreased the revenue of the production segment by 4.1 million to 27.2 million euros on a year-on year.

The largest target markets of the Group are Estonia, Finland, Sweden, and Norway, which is why the sales volumes of the Group are strongly affected by the events happening in these markets. Quarterly sales to the Estonian market increased by 1.5 million to 5.1 million euros in a year-on-year comparison. During the reporting quarter the Group continued the production and delivery of prefabricated substations that began in Q2 2020 in the Elektrilevi OÜ framework procurement.

Sales to the Finnish market decreased by 4.9 million to 14.6 million euros in a quarterly comparison and were most affected by the decrease in orders caused by the snowy and cold winter, commencing with new long-term orders, but also some supply difficulties and shortage in materials. In the reporting quarter, 47.5% (Q1 2020: 55.6%) of the Group’s products and services were sold to the Group’s largest market, Finland.

In comparison with the reporting quarters, the revenue earned from the Swedish market increased by 0.4 million to 5.3 million euros. Sweden accounted for 17.4% (Q1 2020: 14.3%) of consolidated revenue in the reporting quarter, being the second largest market.

Norway ranks fourth in the Group’s markets, accounting for 6.1% of the Group’s first quarter revenue. In the first quarter, the Group’s products, and services worth 1.9 million euros were sold to the Norwegian market, which is 3.6 million less than in the same period of the previous year. The decrease in Norwegian revenue was caused by record high orders in the reference period.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 8.3 euros. As of 31 March 2021, AS Harju Elekter had 7,387 shareholders. The number of shareholders increased during the reporting quarter by 2,303.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000 31 March 2021 31 December 2020
ASSETS
Current assets
Cash and cash equivalents 2,614 2,843
Trade and other receivables 26,663 27,226
Prepayments 1,454 820
Inventories 21,104 18,856
Total current assets 51,835 49,745
Non-current assets
Deferred income tax assets 569 514
Non-current financial investments 12,373 11,918
Investment properties 23,375 23,605
Property. plant and equipment 24,068 22,494
Intangible assets 7,186 7,199
Total non-current assets 65,571 65,730
TOTAL ASSETS 119,406 115,475
LIABILITIES AND EQUITY
Liabilities
Borrowings 11,317 12,056
Prepayments from customers 2,760 4,182
Trade and other payables 20,703 15,837
Tax liabilities 2,454 2,871
Current provisions 35 34
Total current liabilities 37,269 34,980
Borrowings 7,921 7,032
Other non-current liabilities 65 66
Total non-current liabilities 7,986 7,098
TOTAL LIABILITIES 45,255 42,078
Equity
Share capital 11,176 11,176
Share premium 804 804
Reserves 7,123 6,709
Retained earnings 55,211 54,858
Total equity attributable to the owners of the parent company 74,314 73,547
Non-controlling interests -163 -150
Total equity 74,151 73,397
TOTAL LIABILITIES AND EQUITY 119,406 115,475
 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

Unaudited
EUR’000 Q1 Q1
2021 2020
Revenue 30,717 34,998
Cost of sales -26,873 -30,075
Gross profit 3,844 4,923
Distribution costs -1,214 -1,308
Administrative expenses -2,217 -2,561
Other income 172 52
Other expenses -69 -53
Operating profit 516 1 053
Finance income 17 37
Finance costs -98 -102
Profit before tax 435 988
Income tax -138 -285
Profit for the period 297 703
Profit attributable to:
    Owners of the parent company 310 728
    Non-controlling interests -13 -25
Earnings per share
   Basic earnings per share (EUR) 0.02 0.04
   Diluted earnings per share (EUR) 0.02 0.04

Interim Report Q1, 2021

Tiit Atso
Chairman of the Board
+372 674 7400

 

Harju Elekter entered into a contract with AS Ehitusfirma Rand ja Tuulberg for the construction of Laohotell 3

On 22 April, AS Harju Elekter entered into a construction contract with AS Ehitusfirma Rand ja Tuulberg for the construction of Laohotell 3 in the Allika Industrial Park. Pursuant to the contract, the cost of construction is 2.1 million euros.

Laohotell 3, the third complex of production and warehouse buildings in the Allika Industrial Park next to Paldiski mnt on the border of Tallinn will be completed by May 2022. Previously, the Laohotell projects have been successful for Harju Elekter. Laohotell 1 was completed in the beginning of 2018. Laohotell 2 was completed at the end of last year and was filled with tenants in full extent.

Development and management of industrial real estate is one of three main areas of activity of Harju Elekter and it is engaged in this in Estonia, Finland and Lithuania.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for 2020 was EUR 146.6 million. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

More information:
Aron Kuhi-Thalfeldt, Head of Real Estate and Energy Services Department, +372 5171448

 

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

Invitation to the Annual General Meeting of shareholders of AS Harju Elekter, its agenda and proposals

The Management Board of Aktsiaselts Harju Elekter convenes the Annual General Meeting of shareholders. The General Meeting will take place on 29 April 2021 at 10:00 in the LaSpa (formerly Hestia Hotel Laulasmaa Spaa) conference hall Nimbus at Puhkekodu tee 4 Laulasmaa, Lääne-Harju Rural Municipality.

Registration of meeting participants will start on 29 April 2021 at 09:15. Pursuant to subsection 297 (5) of the Commercial Code, the list of shareholders entitled to vote at the meeting is fixed seven days before the General Meeting, i.e. as of the end of the business day of the Nasdaq CSD Estonian settlement system on 22 April 2021.

The Management Board of AS Harju Elekter confirms that necessary measures are taken at the venue of the General Meeting to physically protect the participants in order to reduce the possibility of the spread of the COVID-19 virus, incl. the provision of disinfection and personal protective equipment at the venue of the meeting. If necessary, the measures to be taken will be supplemented according to the prevalent situation at the time of the meeting and any possible social restrictions in force at the time. Only a shareholder or their representative who is without pathognomonic signs is allowed to attend the General Meeting physically in person and it is mandatory to wear a protective mask. Up to two persons may stay and move together, keeping a distance of at least two metres with others, unless such conditions cannot reasonably be guaranteed.

In order to prevent the spread of the virus, the Management Board urges against physically participating in the General Meeting and to use the opportunity to vote on the items on the agenda before the General Meeting by e-mail or post and to follow the General Meeting as a webinar. A more detailed overview of how it is possible to vote before the General Meeting and to participate in the webinar is provided in the section “Organisational issues” of this notice and on the website of AS Harju Elekter at www.harjuelekter.com.

The Supervisory Board of Aktsiaselts Harju Elekter set the agenda of the following General Meeting and approved the following proposals:

1. Approval of the 2020 Annual Report of AS Harju Elekter

Approve the 2020 Annual Report prepared by the Management Board and approved by the Supervisory Board, according to which the total consolidated balance sheet as at 31 December 2020 is 115,475 thousand euros, revenue is 146,614 thousand euros and net profit for the financial year is 5,528 thousand euros.

2. Approval of profit distribution

Approve the 2020 profit distribution proposal of AS Harju Elekter submitted by the Management Board and approved by the Supervisory Board as follows:

Retained earnings 49,295,046 euros
Total net profit for 2020 attributable to owners of the parent company 5,563,389 euros
Total distributable profit as of 31.12.2020 54,858,438 euros

The Management Board proposes the distribution of profits as follows:

Dividends (EUR 0.16 per share*) 2,838,381 euros
Retained earnings after distribution of profit 52,020,054 euros

 

*Dividends will be paid to shareholders on 25 May 2021, by transfer to the shareholder’s bank account. The list of shareholders for the payment of dividends is established on 18 May 2021 as at the end of the business day in the accounting system. The date of the change in the rights related to the securities (ex-date) is 17 May 2021, from this date, the person who acquired the shares is not entitled to receive dividends for the financial year 2020.

3. Amendment of the Articles of Association

Amend the Articles of Association of AS Harju Elekter and approve the new wording of the Articles of Association in the form submitted to the General Meeting.

4. Appointment of the Auditor for the financial years 2021-2023

Appoint AS PricewaterhouseCoopers (registry code 10142876) as the auditor of AS Harju Elekter for the financial years 2021-2023, determine the procedure for remuneration of the Auditor in accordance with the contract to be entered into with the Auditor and grant the Management Board of AS Harju Elekter the right to enter into such a contract. The Auditor has provided consent.

 5. Approval of the Stock Option Programme 2021-2022

Approve the Stock Option Programme in the form submitted to the General Meeting and consent to the Supervisory Board of AS Harju Elekter conducting the Stock Option Programme.

—————————————————————————————-

ORGANISATIONAL ISSUES

Shareholders whose shares represent at least 1/20 of the share capital may request that additional items be included in the agenda of the General Meeting if the respective request is submitted in writing 15 days before the General Meeting, no later than on 14 April 2021.

Shareholders whose shares represent at least 1/20 of the share capital may submit a draft resolution on each item on the agenda no later than 3 days before the General Meeting, no later than on 26 April 2021. Further information on the procedure and terms for exercising the rights provided pursuant to section § 287 (right of shareholder to information), subsection 293 (2) (right to request inclusion of additional items on the agenda and subsection 2931 (3) (obligation to submit a draft resolution or a substantiation simultaneously with the demand on the modification of the agenda) and subsection 2931 (4) (right to submit a draft resolution in respect to each item on the agenda) has been disclosed on the website of AS Harju Elekter at www.harjuelekter.com. This is also where draft resolutions submitted by shareholders and the substantiations of the resolutions, if any, are also disclosed. After the agenda of the General Meeting, incl. the exhaustion of additional items on the agenda, shareholders can request information from the Management Board regarding the activities of the public limited company.

The Annual Report of AS Harju Elekter and the draft resolutions of the items on the agenda are available on the Nasdaq Tallinn website at http://www.nasdaqbaltic.com and on the company’s website at www.harjuelekter.com or in Keila, at Paldiski mnt 31. Questions regarding the items on the agenda can be submitted to the e-mail address yldkoosolek@harjuelekter.com. Questions, answers and positions of the meeting are published on the company’s Internet website.

Appointment of a representative. Prior to the General Meeting, a shareholder may announce the appointment of a representative and the revocation of the power of attorney granted to the representative by sending an e-mail to yldkoosolek@harjuelekter.com or by handing over the said document(s) on working days from 10:00 to 16:00 but no later than on 26 April 2021 at the AS Harju Elekter office at Paldiski mnt 31 (3rd floor) in Keila. A shareholder may use power of attorney forms to authorize a representative available on the website of AS Harju Elekter www.harjuelekter.com.

If voting prior to the General Meeting, shareholders are requested to fill in the ballot papers available on the website of AS Harju Elekter at www.harjuelekter.com and attached to the stock exchange announcement convening the General Meeting. When voting by e-mail, the completed ballot papers must be digitally signed and sent by e-mail to yldkoosolek@harjuelekter.com no later than by 28 April 2021 at 11:00.

When voting by mail, the completed ballot papers must be signed by hand and sent with a copy of the personal data of the signatory’s identity document by mail no later than by 28 April at 11:00 to the address of AS Harju Elekter, Paldiski mnt 31, Keila 76606.

Ballot papers received after the above deadline shall not be considered. If a shareholder submits several completed ballot papers, the ballot paper with the latest digital signature time stamp or time of mailing shall be deemed valid. All previously submitted ballot papers shall be deemed invalid.

If the shareholder who submitted a ballot paper before the General Meeting also physically participates in the General Meeting, all ballot papers sent by the shareholder before the General Meeting shall be deemed invalid. The exact procedure for voting prior to the General Meeting is provided in the shareholder information document available on the website of AS Harju Elekter at www.harjuelekter.com and in the stock exchange announcement convening the General Meeting.

To register participants physically attending the General Meeting the following is required: shareholder who is a natural person – identity document; representative of a shareholder who is a natural person – identity document and a power of attorney in written form; legal representative of a shareholder who is a legal person – an extract from the relevant (commercial) register where the legal person is registered and an identity document of the representative; contractual representative of a shareholder who is a legal person shall submit a power of attorney in written form in addition to the documents specified above. Please legalise or apostille the documents of a legal person registered abroad in advance, unless otherwise provided by an international agreement. AS Harju Elekter may register a shareholder who is a foreign legal person as a participant in a General Meeting even if all the required information about the legal person or its representative is contained in a notarised power of attorney issued to the representative abroad and that power of attorney is acceptable in Estonia. Please present a passport or ID Card as an identity document.

Participation in the webinar of the General Meeting. We ask a shareholder to register no later than on 28 April 2021 at 11:00 here: https://attendee.gotowebinar.com/register/1919203457728378381. After registration, a link to the webinar and instruction for using the environment will be sent. If you are attending a webinar for the first time, you will be asked to download the required application. If downloading the application fails, the web browser will open automatically. The webinar will be held in Estonian. It is possible to follow and listen to what is happening at the General Meeting by way of the webinar. It is not possible to participate in voting through the webinar. Chairman of the Management Board Tiit Atso and Chairman of the Supervisory Board Endel Palla will present the company’s results and answer questions at the webinar. As the time of the webinar is limited, please send questions by 11:00 on 28 April 2021 to the e-mail address yldkoosolek@harjuelekter.com.
The webinar will be recorded and published on the company’s website www.harjuelekter.com as well as on the youtube.com account of Nasdaq Baltic.

Questions regarding the general meeting, also about voting, can be submitted to the e-mail address yldkoosolek@harjuelekter.com or asked by calling 674 7413.

Please find the appendix to the Annual General Meeting and additional information on our AGM 2021 site.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

AS Harju Elekter Audited Annual Report 2020

AS Harju Elekter presents its consolidated audited Annual Report for 2020 prepared by the Management Board and approved by the Supervisory Board. Compared to the preliminary disclosure on 23rd of February 2021, the financial results remained unchanged.

The consolidated audited revenue for the year of 2020 was 146.6 million euros, the operating profit was 6.5 million euros and net profit 5.5 million euros.

The audited Annual Report 2020 of AS Harju Elekter is available on NASDAQ Tallinn website, as well as on AS Harju Elekter’s home page www.harjuelekter.com

Annual Report 2020

 

Tiit Atso

Chairman of the Management Board

+372 674 7400

Swedish subsidiary of Harju Elekter signed new contracts with Region Stockholm for the upgrading of metro stations

The Swedish subsidiary of Harju Elekter Group, Harju Elekter AB, signed electricity project contracts with Region Stockholm, the administrative body responsible for public transport. These contracts will serve as the basis for the upgrading of the electrical systems of the Albano and Rådhuset metro stations in Stockholm by April and September 2022, respectively. The approximate volume of the contracts is 3,1 million euros.

The new projects of Harju Elekter with Region Stockholm, which manages the Stockholm metro, represent the continuation of cooperation that already started with the modernisation of the Slussen metro last autumn.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. The customers of Harju Elekter are predominantly large distribution network, industrial, and maritime companies in the Nordic countries. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for 2020 was EUR 146.6 million. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Board
+372 674 7400

 

Additional information:
Mikael Schwartz Jonsson, Managing Director of Harju Elekter AB, +46 73 870 01 51

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
Email: marit.tack@harjuelekter.com

 

Subsidiary of Harju Elekter won the Enefit Connect OÜ tender

Energo Veritas OÜ, a subsidiary of Harju Elekter Group, was successful in the tender held by Enefit Connect OÜ for the supply of hermetic transformers. A framework contract with the total volume of EUR 12 million will be signed for a period of three years with the possibility of a two-year extension. The terms and conditions of the contract will be specified, and the framework contract signed during March.

Over the years, the group has contributed to activities on the Estonian market by participating in tenders, selling electrical equipment for retail and project sales, and offering industrial rental spaces for corporate customers. Sales to the Estonian market grew to EUR 23.5 million in the previous year (EUR 16.7 million in 2019), comprising 16% of the consolidated sales revenue.

Enefit Connect OÜ is a subsidiary of the Eesti Energia Group, managing power networks and an extensive part of Estonia’s street lighting network, building an Internet network, developing the charging network for electric vehicles, and offering customers new energy solutions based on modern technology.

Energo Veritas OÜ is a company trading in electrical materials and equipment, with offices in Tallinn and Tartu. The company’s largest customers are electricity and telecommunications companies, builders, electrical installers, and industrial companies. The main product areas are cables and installation materials, switchboards and low-voltage equipment, lighting fixtures and light sources, boilers and heat devices and chargers for electric vehicles.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. An increasingly significant portion of Harju Elekter’s technical solutions are aimed at the renewable energy sector, thus offering complete plans for solar power plants, electric vehicle charging stations and other related solutions. Its factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for 2020 was EUR 146.6 million. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

More information:
Kristo Reinhold, Manager of Energo Veritas OÜ, +372 518 7906

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

 

Harju Elekter employee Marko Paavel mentored youngsters in the Prototron Programme

Young people have ambitious ideas and the will to act, but they sometimes need extra know-how and a bit of encouragement. This is when an experienced and open-minded mentor can help. One such youth competition with a mentoring programme is Prototron. Marko Paavel, the Head of the Energy Business Unit at Harju Elekter Elektrotehnika AS, talks about his experience with the programme.

What does mentoring offer the young participants, how time-consuming is it and what are the thoughts of the members of the winning Ultralink team on Marko’s mentoring? We let the programme participants discuss this and share their thoughts. Hopefully, this post will inspire other enthusiasts to become mentors and share their advice with the youth as well.

What is Prototron Junior?

Prototron Junior is a technology and entrepreneurship competition for 13–19-year-olds. In this competition, young entrepreneurs pitch an idea and, if they are successful, get given the opportunity to implement it as well. Ultralink was the winning team of Prototron Junior this year. Their winning product is a self-disinfecting door handle that uses UV-radiation.

Marko says that the opportunity to give something back to society has always felt close to his heart. Since he previously supervised students at TalTech, he quickly agreed to do a similar thing in Prototron.

“Some call the new generation the snowflakes, but this is not what I see. I can say that most of the young people today are ready to build and create something with their own hands.”

The mentoring sessions took place once or twice a week for about an hour using Microsoft Teams. “I asked them questions and brought out the principles and actions required for the process of launching a new product. The team gave me an overview of their action plans and I gave them advice on how and what could be done better,” says Marko. The most challenging issue in the process, he adds, was the given time frame: “The time for building the prototype from scratch was quite limited.”

Are young people ready to listen to and use advice?  

Marko says that his mentees knew very well how to receive constructive criticism and learn from it: “They had to come out of their comfort zone many times.” The Ultralink team members commented: “Marko encouraged us to do things that seemed unpleasant – we gained more experience because of it and we probably would not have won had it not been for him. For example, he advised us to do market research by phone, not by e-mail. Otherwise, we probably would have taken the more comfortable route and sent out e-mails. It makes a high-school student go weak at the knees to make a phone call to the manager of a company, but all in all, we managed.”

What has this experience taught you?

Marko says that supervising the participants of Prototron is quite a challenge: “In a student company, you’re not dealing with top professionals, but people who are striving for that. This means you must choose the correct approach. Secondly, the mentor may not be familiar with the field of the product, therefore they must make an effort and think more broadly. The Ultralink team did not have an obligation to work with me – they could have simply ignored my advice and done things their way. It gives one a great feeling if you can share your ideas and they are listened to.

The members of the Ultralink team encourage all who are considering whether to become a mentor to take on this journey: “We believe this role can make a change to everyday work. You can see the development of a student company and feel proud. We feel that Marko being there made us feel secure and gave us the courage to keep going.”

Why did Ultralink win?

“If I look at the companies that made it to the top five, I think that the jury was impressed by the prototype made by Ultralink,” says Marko. “The product is relevant in today’s world and offers a necessary technical solution to help stop the spread of the virus,” he adds.

As the winner of Prototron Junior, Ultralink were awarded the initial funding required for the production process. They have an agreement with Marko that they can contact him again anytime, as the company needs to develop both technologically and in finding reference clients.

“We named our company Ultralink – it’s made of two words that characterise our product: ultraviolet radiation and a door handle. It is easy to say and remember,” comment the members of the student company. There is an inertial sensor in the door handle that detects if someone touches it. After that, the diode of ultraviolet radiation, which kills bacteria and viruses, is activated. What is the cost of the product? “Our product is not much more expensive than other high-quality door handles. Considering the technology inside, the price is about 150 euros,” explain the winners.

 

Author: Helen Külaots

Harju Elekter Group financial results, 1-12/2020

Revenue, Expenses, and Profit

Despite the challenges provided over the past year, Q4 and the year 2020 both were full of changes and successful for Harju Elekter. The Group’s large-scale investments in recent years and active sales work to increase its market share in the Scandinavian and in native market have come to bear fruits. Sales orders carried over from previous periods and additional orders in the reporting year resulted in record revenue and profit in the reporting quarter and in the reporting year.

 EUR’000  

Q4

Q4 +/- 12m 12m +/-
   

2020

2019

Q/Q

2020

2019

12m/12m

Revenue

35,243

31,246 12.8% 146,614 143,397

2.2%

Gross profit

5,585

3,995 39.8% 21,209 18,244

16.3%

EBITDA

2,400

1,112 115.8% 10,340 6,791

52.3%

Operating profit (EBIT)

1,335

210 535.7% 6,546 3,273

100.0%

Profit for the period

1,159

55 2007.3% 5,528 2,367

133.5%

Incl. attributable to owners of the parent

1,165

77 1413.0% 5,563 2,460

126.1%

Earnings per share (EPS) (euros)

0.07 0.00 1413.0% 0.31 0.14

126.1%

The total operating expenses for the reporting quarter were 34.0 (Q4 2019: 31.1) million euros. The majority of the increase in expenses was due to an increase in the cost of sales: 2.4 million euros year-on-year. The Group’s companies were actively seeking opportunities to increase business volumes for upcoming periods by participating in several procurements, as a result of which distribution costs have increased to 2.2 million euros, this being an 0.7 million increase from the comparable quarter. Compared to the comparable quarter and year, labor costs increased, amounting to 7.3 (Q4 2019: 7.2) and 27.3 (2019: 26.7) million euros, respectively. The reason for the increase in labour costs primarily lies in the good financial results of the Group’s companies. In 2020 while extraordinary production shifts have also been made during this difficult year, being accompanied by an increase in working hours and higher bonuses.
The consolidated unaudited revenue of the Group was 35.2 (Q4 2019: 31.2) million euros in the reporting quarter and a total of 146.6 (2019: 143.4) million euros in the reporting year.

The consolidated gross profit for the reporting quarter was 5,585 (Q4 2019: 3,995) thousand euros and the gross profit margin was 15.8% (Q4 2019: 12.8%). The consolidated gross profit for the reporting year was 21,209 (2019: 18,244) thousand euros and the gross profit margin was 14.5% (2019: 12.7%). Quarterly consolidated operating profit (EBIT) was six times higher than in the same period of last year and doubled on a yearly basis, amounting to 1,335 (Q4 2019: 210) and 6,546 (2019: 3,273) thousand euros, respectively. The operating margin increased by 3.1 percentage points to 3.8% in the reporting quarter and by 2.2 percentage points to 4.5% in twelve months.

The consolidated net profit for the reporting quarter was 1,159 (Q4 2019: 55) thousand euros, and earnings per share were 0.07 (Q4 2019: 0.00) euros. Net profit for the year 2020 increased by 133.5% compared to the comparable period, reaching 5,528 (2019: 2,367) thousand euros. Earnings per share for the reporting year were 0.31 (2019: 0.14) euros.

Core Business and Markets

The Group’s core business, Production, accounted for 86% of the Group’s consolidated revenue. The largest target markets of the Group are Estonia, Finland, Sweden, and Norway. Quarterly sales to the Estonian market increased by 2.9 million to 6.5 million euros in a year-on-year comparison and 6.7 million to 23.5 million euros within twelve-month comparison. Most of the deliveries of the prefabricated substations for Elektrilevi OÜ, whose tender was won in 2019, were postponed to the second half of the reporting year due to difficulties in the availability of individual materials and components.

Sales to the Finnish market decreased by 1.0 million euros to 13.8 million euros in a quarterly comparison, from Q2 onwards, mostly being affected by a decrease in orders in the industrial automation sector. The decrease in orders in the three quarters also affected the result of the financial year with the revenue from the Finnish market decreasing by 3.0 million euros to 68.7 million in a yearly comparison. The majority of the sales volume was generated by sales to Finnish electricity network companies, whose orders were declining due to the renewal of procurement contracts. Harju Elekter proved to be successful in most of the new procurements.

Sales to the Swedish market increased the most. The revenue earned on the Swedish market almost doubled in the comparison of the reporting quarters, totalling 9.1 million euros. In a year comparison, Sweden’s revenue increased by 7.0 million euros to 26.5 million euros, being the second largest market overall. The growth was supported by an increase in the sale of substations, manufactured in Estonia, to the Swedish market as well as the overall growth in orders in Sweden.

Norway ranks fourth in the Group’s markets, accounting for 7.8% of the Group’s fourth quarter revenue, being 2.8 million euros. During the reporting year, the Norwegian market earned 16.7 million euros, which is 4.9 million euros less than in the previous year. The decrease in the revenue in Norway was caused by record-high orders in Q3 and Q4 of the previous year.

Investments

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.18 euros. As of 31 December 2020, AS Harju Elekter had 5,084 shareholders. The number of shareholders increased during the reporting quarter by 253 persons.

Dividend Proposal

The Group’s dividend policy mandates that at least one third of the net profit from ordinary economic activities is paid out as dividends. Proposing the payment of dividends, the Management Board has considered the significantly improved financial results, as well as the making of increased investments and the betterment of the financial position. In coordination with the Supervisory Board, the Group’s Management Board will propose to pay dividends to the shareholders 0.16 euros per share, totalling 2.8 million euros and representing 51% of consolidated net profit in 2020.

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000

31 December 2020

31 December
2019
ASSETS
Current assets
Cash and cash equivalents 2,843 4,878
Trade and other receivables 27,226 22,958
Prepayments 820 1,166
Inventories 18,856 19,010
Total current assets 49,745 48,012
Non-current assets
Deferred income tax assets 514 472
Non-current financial investments 11,918 10,494
Investment properties 23,605 21,259
Property, plant, and equipment 22,494 20,402
Intangible assets 7,199 7,260
Total non-current assets 65,730 59,887
TOTAL ASSETS 115,475 107,899
LIABILITIES AND EQUITY
Liabilities
Borrowings 12,056 11,305
Prepayments from customers 4,182 2,212
Trade and other payables 15,837 16,448
Tax liabilities 2,871 2,959
Current provisions 34 34
Total current liabilities 34,980 32,958
Borrowings 7,032 7,901
Other non-current liabilities 66 64
Total non-current liabilities 7,098 7,965
TOTAL LIABILITIES 42,078 40,923
Equity
Share capital 11,176 11,176
Share premium 804 804
Reserves 6,709 3,412
Retained earnings 54,858 51,699
Total equity attributable to the owners of the parent company 73,547 67,091
Non-controlling interests -150 -115
Total equity 73,397 66,976
TOTAL LIABILITIES AND EQUITY 115,475 107,899
 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

Unaudited
EUR’000 Q4 Q4 12m 12m
2020 2019 2020 2019
Revenue 35,243 31,246 146,614 143,397
Cost of sales -29,658 -27,251 -125,405 -125,153
Gross profit 5,585 3,995 21,209 18,244
Distribution costs -2,208 -1,508 -5,847 -5,706
Administrative expenses -2,140 -2,300 -9,259 -9,229
Other income 213 85 707 255
Other expenses -115 -62 -264 -291
Operating profit 1,335 210 6,546 3,273
Finance income 21 4 137 139
Finance costs -110 -58 -379 -225
Profit before tax 1,246 156 6,304 3,187
Income tax -87 -101 -776 -820
Profit for the period 1,159 55 5,528 2,367
Profit attributable to:
    Owners of the parent company 1,165 77 5,563 2,460
    Non-controlling interests -6 -22 -35 -93
Earnings per share
   Basic earnings per share (EUR) 0.07 0 0.31 0.14
   Diluted earnings per share (EUR) 0.07 0 0.31 0.14

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Interim Report 1-12/2020

Harju Elekter to conclude an important agreement in Sweden

On 10 February 2021, Harju Elekter Group’s Swedish subsidiary Harju Elekter AB signed a framework agreement with E.ON Energidistribution AB, the largest distribution network company in Sweden. According to the agreement, approximately 1,500 substations will be supplied over the period of three years, and the total volume of the agreement is nearly 15 million euros.
The substations will be produced in the factory of AS Harju Elekter Elektrotehnika in Estonia. The manufacturing of substations by Harju Elekter Group’s factory in Estonia has increased significantly over the past few years, reaching an average of 2,000 substations per year today.

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

Harju Elekter is an international industrial group with more than 50 years of experience, and with its main activity being the development and production of electrical and automation solutions. The main activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. The customers of Harju Elekter are predominantly large distribution network, industrial, and maritime companies in the Nordic countries. The factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for the first nine months of 2020 was 111.4 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Board
+372 674 7400

Additional information:
Mikael Schwartz Jonsson, Managing Director of Harju Elekter AB, +46 73 870 01 51
Indrek Ulmas, Managing Director of AS Harju Elekter Elektrotehnika, +372 506 1208

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 671 2761
Email: marit.tack@harjuelekter.com

AS Harju Elekter comments on trading activity of its stock

AS Harju Elekter notes that the rapid growth of the company’s share price and trading activity on the Nasdaq Tallinn Stock Exchange may be related to recent press reports on the operating prospects of Skeleton Technologies Group OÜ.

AS Harju Elekter made this long-term strategic investment in Skeleton Technologies Group OÜ, a company engaged in the development and production of supercapacitors, already in 2015. Harju Elekter’s shareholding in the company is 7.64%.

Tiit Atso
Chairman of the Board
+372 674 7400

Prepared by:
Marit Tack
Corporate Communications and Investor Relations Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

Harju Elekter Group concluded an agreement with Finland’s largest distribution network company

On 19 January 2021 Harju Elekter Group concluded an agreement with Caruna Oy, Finland’s largest distribution network company. The contract is for the period 2021-2023 and its estimated total volume for next three years is 14 million euros.

According to the terms of the frame agreement Harju Elekter’s subsidiaries Harju Elekter Elektrotehnika AS and Harju Elekter Oy will manufacture and deliver for Caruna about 1000 prefabricated substations over a period of three years. For the contract there is an extension option of two years, which will be done after 2023 for each year separately.

Caruna Oy is the largest company in Finland dedicated to the distribution of electricity. It provides power to 700,000 private and corporate customers in South, Southwest, and West Finland, as well as in the city of Joensuu, the sub-region of Koillismaa, Lapland and the Satakunta region. Caruna employs approximately 300 employees and contracts directly over 1,000 additional workers all over Finland. Caruna is investing heavily in the construction of a weatherproof network and during the last years investment levels have been over 200 million euros.

Harju Elekter is an international industrial group with more than 50 years of experience, being engaged in the development and production of electricity and automation solutions. The customers of Harju Elekter are predominantly large distribution network-, industrial and maritime companies in the Nordic Countries. 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 800 specialists, and its nine-month revenue in 2020 was 111.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Additional information:
Jan Osa, Managing Director of Harju Elekter Oy, tel +358 40 561 6669

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444
E-mail: marit.tack@harjuelekter.com

 

Harju Elekter Group’s Finnish subsidiary’s name was changed

The new business name of Satmatic Oy, a 100% Finnish subsidiary of AS Harju Elekter, is Harju Elekter Oy as of 14 January 2021.

The name change of the Finnish subsidiary was carried out with the purpose of combining the business names with the brand used daily. Using a common logo of Harju Elekter contributes to strengthening the Group’s competitiveness and creates additional benefits and opportunities in marketing activities.

Harju Elekter Oy will continue with all existing business lines and offering solutions for the energy, industry, and construction sectors. As a result of the change, the details of the contact persons will not change, and the scope of the products and services offered by the Group will rather expand in Finland compared to the past.

Harju Elekter is an international industrial group with more than 50 years of experience, being engaged in the development and production of electricity and automation solutions. The customers of Harju Elekter are predominantly large distribution network-, industrial and maritime companies in the Nordic Countries. 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 800 specialists, and its nine-month revenue in 2020 was 111.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Tiit Atso
Chairman of the Board
+372 674 7400

 

Additional information:
Jan Osa, Managing Director of Harju Elekter Oy, tel +358 40 561 6669

 

Prepared by:
Marit Tack
Corporate Communications and Investor Relations Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

Merger and division of the Group’s Finnish subsidiaries

The Finnish subsidiary of Harju Elekter Group, Satmatic Oy (the acquiring company), merged its 100% subsidiaries Finnkumu Oy and Kiinteistö Oy Ulvila Sammontie 9 (the companies being acquired). As a result of the merger, the legal successor of Finnkumu Oy and Kiinteistöt Oy Ulvila Sammontie 9 is Satmatic Oy. Jan Osa will continue as the CEO of Satmatic Oy. In the Management Board, Simo Puustelli will continue as the Chairman, Tiit Atso as the Vice-Chairman, and Endel Palla and Andres Allikmäe as the Members.

After the merger, a partial division of Satmatic Oy was carried out, whereby Satmatic Oy transferred the real estate holdings in Ulvila and Kerava to Harju Elekter Kiinteistöt Oy. The main activity of Harju Elekter Kiinteistöt Oy is the management of industrial real estate belonging to the Group. The Management Board of the company includes chairman Aron Kuhi-Thalfeldt, members Tiit Atso, and Andres Allikmäe, and Simo Puustelli acts as the CEO.

The merger and division were carried out in accordance with the current legislation of Finland and entered in the Finnish Commercial Register on 31 December 2020. The transactions are intra-group and do not have a significant effect on the consolidated financial results of the Group.

The merger and division of the Finnish subsidiaries is related to the Group’s decision to simplify its structure and the coordination of sales and marketing, as well as to separate real estate management from production activities. As a result of the changes, the details of the contact persons will not change, and the scope of the products and services offered by the Group will rather expand in Finland compared to the past.

Harju Elekter is an international industrial group with more than 50 years of experience, with its main activity being the development and production of electrical and automation solutions. The main activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. The customers of Harju Elekter are predominantly large distribution network, industrial, and maritime companies in the Nordic countries. The factories in Estonia, Finland, Sweden, and Lithuania employ approximately 800 specialists, and the Group’s sales revenue for the first nine months of 2020 was 111.4 million euros. The shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
Phone +372 674 7400

Additional information:
Jan Osa, CEO of Satmatic Oy; phone +358 40 561 6669

 

Prepared by:
Marit Tack
Corporate Communications Manager
Phone +372 671 2761
Email: marit.tack@harjuelekter.com

Archive

Publication of Financial Reports in 2021

AS Harju Elekter wishes to the shareholders Happy Holiday Season and informs that in the year 2021, the consolidated financial results of AS Harju Elekter will be published as following:

2020 4Q results                      23.02.2021
2021 1Q results                      28.04.2021
AGM                                         29.04.2021
2021 2Q results                      28.07.2021
2021 3Q results                      27.10.2021

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.com.

 

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate communications and investor relations manager
+372 53408444
marit.tack@harjuelekter.com

Changes in the Swedish subsidiaries of Harju Elekter Group

Based on the decision of the Supervisory Board and the Management Board of AS Harju Elekter to bring the companies of the Group under the trademark Harju Elekter, the name of the Swedish subsidiary SEBAB AB was changed to Harju Elekter AB.

The Swedish subsidiary, which until now operated under the name of Harju Elekter AB, was renamed Harju Elekter Services AB. The name change of both subsidiaries was entered in the Swedish Commercial Register on 14 December 2020.

The name change of the Swedish subsidiaries was carried out with the purpose of combining the business names with the brand used on a daily basis. Using a common logo of Harju Elekter contributes to strengthening the Group’s competitiveness and creates additional benefits and opportunities in marketing activities.

Harju Elekter AB (with its former business name SEBAB AB) will continue to develop electrical solutions for energy production and distribution, and the production of technical buildings. Harju Elekter Services AB (with its former business name Harju Elekter AB) has been active in the Group for the last three years as a sales representative office for the Group’s medium voltage and substation products, but these tasks will be taken over by Harju Elekter AB. This marks the end of the final phase of the restructuring of the Swedish subsidiaries. The structural change will not affect the Group’s financial results.

Harju Elekter is an international industrial group with more than 50 years of experience, being engaged in the development and production of electricity and automation solutions. The customers of Harju Elekter are predominantly large distribution network-, industrial and maritime companies in the Nordic Countries. 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 800 specialists, and its nine-month revenue in 2020 was 111.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Tiit Atso
Chairman of the Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications and Investor Relations Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

 

The merger of Swedish subsidiaries of Harju Elekter Group was entered into the commercial register

On 29 October 2020, the merger of SEBAB AB and Grytek AB, Swedish subsidiaries wholly owned by Harju Elekter Group, was entered into the Swedish Companies Registration Office’s register. As a result of the merger of companies, SEBAB AB becomes the successor of Grytek AB.

The merger of the Swedish subsidiaries is related to the Group’s plan to transfer all subsidiaries under the name and brand of Harju Elekter, to simplify the coordination of sales and marketing.

Mikael Schwartz Jonsson will continue as the CEO of SEBAB AB. In the Management Board, Tiit Atso will continue as the Chairman, and Andres Allikmäe, Andres Toome and Thomas Andersson will continue as Members.

The merger of subsidiaries is an intra-group transaction and does not have an effect on the economic results of Harju Elekter Group.

Harju Elekter is an international industrial group with more than 50 years of experience, being engaged in the development and production of electricity and automation solutions. The customers of Harju Elekter are predominantly large distribution network-, industrial and maritime companies in the Nordic Countries. 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 800 specialists, and its nine-month revenue in 2020 was 111.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Marit Tack
Corporate Communications and Investor Relations Manager
+372 671 2761
E-mail: marit.tack@harjuelekter.com

Harju Elekter Group financial results, 1-9/2020

Revenue, Expenses, and Profit

Q3 and the nine-month period were still successful for Harju Elekter Group despite the prevailing global recession – the Group continued with the targeted improvement of its profitability. The measures taken helped to keep people healthy and maintain the normal level of production in all factories.

 EUR’000   Q3 Q3 +/- 9m 9m +/-
    2020 2019 Q/Q 2020 2019 9m/9m
Revenue 37,360 42,262 -11.6% 111,372 112,150 -0.7%
Gross profit 5,234 5,375 -2.6% 15,625 14,249 9.7%
EBITDA 2,913 2,446 19.1% 7,939 5,679 39.8%
Operating profit (EBIT) 2,002 1,561 28.3% 5,211 3,064 70.1%
Profit for the period 1,694 1,319 28.4% 4,369 2,313 88.9%
Incl. attributable to owners of the parent company 1,691 1,359 24.4% 4,398 2,384 84.5%
Earnings per share (EPS) (euros) 0.10 0.08 24.4% 0.25 0.13 84.5%

The consolidated revenue of the Group in Q3 of 2020 remained somewhat lower compared to the record volumes of the year before, while over the years still being a good result. The consolidated unaudited revenue for the reporting quarter was 37.4 (Q3 2019: 42.3) million euros and the consolidated revenue for the nine months was 111.4 (9m 2019: 112.2) million euros.

Operating expenses for the reporting quarter have decreased in all expense groups – a total of 5.2 million euros. Compared to Q3 2019, distribution costs decreased by 24.1%, by 0.4 million to 1.2 million euros, because the coronavirus (COVID-19) is spreading around the world, most sales work was done virtually. The largest change compared to Q3 of 2019 was in cost of sales – a decrease of 4.8 million euros. Administrative expenses decreased by 3.1% to 2.2 million euros, compared to Q3 of 2019. Labour costs remained at the same level, being 6.6 million euros in year-on-year comparison.

The consolidated gross profit for the reporting quarter and for the nine months was 5,234 (Q3 2019: 5,375) and 15,625 (9m 2019: 14,249) thousand euros, respectively, and the gross margin for both periods was 14.0% (Q3 and 9m 2019: 12.7%). Consolidated operating profit (EBIT) was 2,002 (Q3 2019: 1,561) thousand euros and in the nine months 5,211 (9m 2019: 3,064) thousand euros. The operating margin increased by 1.7 percentage points to 5.4% in the reporting quarter and by 2.0 percentage points to 4.7% in nine months.

The consolidated net profit for the reporting quarter was 1,694 (Q3 2019: 1,319) thousand euros, and earnings per share were 0.10 (Q3 2019: 0.08) euros. Net profit for the nine months increased by 88.9% compared to the comparable period, reaching 4,369 (9m 2019: 2,313) thousand euros. Nine-month earnings per share were 0.25 (9m 2019: 0.13) euros.

Core Business and Markets

Harju Elekter’s core business, production, accounted for 86% of the Group’s consolidated revenue both in the reporting quarter and in nine months. The Group’s three largest target markets are Estonia, Finland, and Sweden. Quarterly sales to the Estonian market increased by 3.0 million euros to 7.7 million euros in a year-on-year comparison and by 3.8 million euros to 17.0 million euros in a nine-month comparison. The main reason behind the sales growth was that deliveries under the framework procurement of Elektrilevi OÜ mostly remained in the third quarter.

Quarterly sales to the Finnish market decreased by 2.2 million euros to 16.5 million euros in a year-on-year comparison and it was mostly affected by the decrease in orders. The decline in orders in the last quarter also affected the 9-month result, where revenue to the Finnish market decreased by 2.1 million euros to 54.9 million euros.

Quarterly sales to the Swedish market increased by 1.2 million euros to 6.6 million euros in the year-on-year comparison. The Swedish market’s revenue increased by 2.7 million euros to 17.5 million euros in a nine-month comparison, being the second largest market overall. The growth in the Swedish market was secured by an increase in the sale of substations, manufactured in Estonia, to the Swedish market as well as the general increase in orders.

Investments

In the reporting period, the Group invested a total of 4.1 (9m 2019: 4.4) million euros in non-current assets, incl. 2.1 (9m 2019: 0.7) million euros in investment properties, 1.8 (9m 2019: 3.4) million euros in property, plant and equipment and 0.2 (9m 2019: 0.3) million euros in intangible assets.

The largest development project in Q3 was the start of the construction of the fourth stage of the expansion of the production and office building in Lithuania. Investments aimed at the expansion of the plant will enable Harju Elekter UAB to double the plant’s revenues. In addition, investments were made in the construction of a production facility in the Allika Industrial Park, and plots of land were purchased.

Share

The company’s shares closed at 4.44 euros on the last trading day of the reporting quarter on the Nasdaq Tallinn stock exchange. As at 30 September 2020, AS Harju Elekter has 4,831 shareholders. The number of shareholders has increased by 261 over the reporting quarter.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
EUR’000

                        30September2020

                               31December2019

ASSETS
Currents assets
Cash and cash equivalents 3,367 4,878
Trade and other receivables 26,464 22,958
Prepayments 1,048 1,166
Inventories 21,213 19,010
Total current assets 52,092 48,012
Non-current assets
Deferred income tax assets 513 472
Non-current financial investments 8,146 10,494
Investment properties 22,758 21,259
Property, plant, and equipment 20,330 20,402
Intangible assets 7,200 7,260
Total non-current assets 58,947 59,887
TOTAL ASSETS 111,039 107,899
LIABILITIES AND EQUITY
Liabilities
Borrowings 8,871 11,305
Prepayments from customers 3,947 2,212
Trade and other payables 19,264 16,448
Tax liabilities 2,555 2,959
Current provisions 35 34
Total current liabilities 34,672 32,958
Borrowings 7,901 7,901
Other non-current liabilities 95 64
Total non-current liabilities 7,996 7,965
TOTAL LIABILITIES 42,668 40,923
Equity
Share capital 11,176 11,176
Share premium 804 804
Reserves 2,842 3,412
Retained earnings 53,693 51,699
Total equity attributable to the owners of the

parent company

68,515 67,091
Non-controlling interests -144 -115
Total equity 68,371 66,976
TOTAL LIABILITIES AND EQUITY 111,039 107,899

 

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS
Unaudited
EUR’000 Q3 Q3 9m 9m
2020 2019 2020 2019
Revenue 37,360 42,262 111,372 112,150
Cost of sales -32,126 -36,887 -95,747 -97,901
Gross profit 5,234 5,375 15,625 14,249
Distribution costs -1,150 -1,516 -3,639 -4,198
Administrative expenses -2,225 -2,296 -7,119 -6,929
Other income 167 39 494 171
Other expenses -24 -41 -150 -229
Operating profit 2,002 1,561 5,211 3,064
Finance income 8 25 116 147
Finance costs -122 -77 -269 -179
Profit before tax 1,888 1,509 5,058 3,032
Income tax -194 -190 -689 -719
Profit for the period 1,694 1,319 4,369 2,313
Profit attributable to:
Owners of the parent company 1,691 1,359 4,398 2,384
Non-controlling interests 3 -40 -29 -71
Earnings per share
Basic earnings per share (EUR) 0.10 0.08 0.25 0.13
Diluted earnings per share (EUR) 0.10 0.08 0.25 0.13

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Interim Report 1-9/2020

Harju Elekter Group concluded an agreement with Finland’s second largest electricity distribution system operator

Harju Elekter Group concluded an eight-year framework agreement with Elenia OY, Finland’s second largest electricity distribution system operator. The first supply contract was signed by Harju Elekter and Elenia for the period 2021-2023.

According to the terms of the framework agreement, Elenia has the right to organise mini-tenders among the partners who have entered into the framework agreement, and a supply contract for the supplying of transformer substations will be concluded with the selected partner for a specified period of time. Based on the supply contract concluded on 22 September, Harju Elekter’s subsidiaries AS Harju Elekter Elektrotehnika and Satmatic OY will manufacture nearly 2000 transformer substations for Elenia over a period of three years. The volume of the contract is approximately EUR 20 million.

The manufacturing of substations by Harju Elekter Group’s factories in Estonia and Finland has increased significantly over the past few years, today reaching an average of 4000 substations per year.

The Elenia Group is the second largest electricity distribution system operator in Finland, providing services to 430,000 customers in Kanta-Häme and Päijät-Häme, Pirkanmaa, Central Finland, South Ostrobothnia and North Ostrobothnia. In addition to offering its electricity distribution service, the company also ensures the operation and modernisation of the electricity distribution system and the construction of electricity distribution system networks and connections with its partner companies.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sale of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter, with the Group’s six-month sales revenue amounting to EUR 74 million in 2020. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Jan Osa, CEO of Satmatic Oy and Finnkumu Oy, Tel.: +358 40 561 6669
Indrek Ulmas, CEO Harju Elekter Elektrotehnika AS, Tel.: +372 506 1208

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444

Harju Elekter’s Swedish subsidiary signed a contract related to the upgrading of the Slussen metro station’s electrical substation in Stockholm

A subsidiary of Harju Elekter Group, SEBAB AB, signed an electrical project contract with administrative body Region Stockholm, which is responsible for public transport; the contract will be the basis for the major refurbishment of the Slussen metro station’s substation. The year-long project will commence this September, and the approximate volume of the contract is EUR 3.5 million.

Region Stockholm is responsible for the development and administration of local public transport. Reconstruction of the metro station is part of the extensive reconstruction of the Slussen area of Stockholm, which includes the construction of new facilities and the transformation of transport by 2025.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sale of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter, with the Group’s six-month sales revenue amounting to EUR 74 million in 2020. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

Additional information:
Mikael Schwartz Jonsson, Managing Director of SEBAB AB, +46 73 870 01 51

 

Prepared by:
Marit Tack
Corporate Communications Manager
+372 5340 8444

Harju Elekter Group won an important tender in Finland

Finnkumu Oy, the Finnish manufacturing company of Harju Elekter Group, was awarded the joint procurement of Järvi-Suomen Energia Oy and Savon Voima Verkko Oy for the supply of prefabricated substations. The estimated volume of the contract is EUR 18 million. Deliveries will take place from 2021 to 2023 with an extension option of four years.

Järvi-Suomen Energia builds, maintains and develops the electricity network of Finland’s unique lake district. As the local distribution system operator, Järvi-Suomen Energia maintains an electricity grid of approximately 27 000 kilometers and ensures that the lights switch on in over 100 000 homes.

The Savon Voima Group is a wholly owned subsidiary of Savon Energiaholding Oy, which is owned by 20 municipalities. The company is one of the largest sellers of energy services in Finland. In addition to the parent company, the Savon Voima Group includes Savon Voima Verkko Oy, which provides network services. The Group’s business areas are electricity distribution, electricity generation and district heating.

The Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sale of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. Harju Elekter Group’s plants in Estonia, Finland, Sweden and Lithuania employ over 800 specialists, and 6 months 2020 sales revenue of the Group was 74 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Finnkumu Oy is a wholly owned subsidiary of Satmatic Oy.

Tiit Atso
Chairman of the Board/CEO
+372 674 7400

 

For more information: Jan Osa, Managing Director of Satmatic Oy and Finnkumu Oy
+358 40 561 6669

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

Harju Elekter Group financial results, 1-6/2020

Revenue and profit

The global and Estonian coronavirus (Covid-19) pandemic did not significantly affect the Group’s revenue in the reporting quarter. The consolidated unaudited revenue for the second quarter 2020 was 39.0 (Q2 2019: 40.6) million euros. Some decline in revenue was due to delays in the delivery of some materials and components, which delayed the completion of some orders to the next quarter. Consolidated revenue for the first half of the year increased by 5.9% and reached 74.0 (6m 2019: 69.9) million euros. All in all, the consolidated revenue of the Group in the first half of the year increased by a total of 4.1 million euros to 74.0 million euros in all business activities. Despite the uncertainty in the economic environment, the volume of new orders and cooperation with important customers with framework agreements have persisted. Many of the clients’ new potential projects are in the decision-making stage.

change

January – June

change

April – June

year

(EUR´000)

6m/6m

2020

2019

Q2/Q2

2020

2019

2019

Revenue

5.9%

74,012

69,889

-3.9%

39,014

40,606

143,397

Gross profit

17.1%

10,391

8,875

7.5%

5,468

5,087

18,244

EBITDA

55.5%

5,027

3,232

49.3%

3,084

2,065

6,791

Operating profit (EBIT)

113.6%

3,209

1,502

80.4%

2,156

1,195

3,273

Profit for the period

169.0%

2,674

994

137.8%

1,971

829

2,367

 Incl. attributed to Owners of the Company

164.1%

2,708

1,025

134.8%

1,979

843

2,460

Earnings per share (EPS)

164.1%

0.15

0.06

134.8%

0.11

0.05

0.14

The consolidated gross profit for the reporting quarter was 5,468 (Q2 2019: 5,087) thousand euros, the gross margin was 14.0% (Q2 2019: 12.5%). Consolidated operating profit (EBIT) was 2,156 (Q2 2019: 1,195). The operating margin for the second quarter was 5.5%. The consolidated net profit for the reporting quarter was 1,971 (Q2 2019: 829) thousand euros of which the share of the owners of the Parent company amounted to 1,979 (Q2 2019: 843) thousand euros. Earnings per share (EPS) was 0.11 (Q2 2019: 0.05) euros in the first quarter. While the low profitability in the Q2 of 2019 was affected by the increase in production input prices and wages, as well as the underload of production due to the lower than expected order volume of Finnish electricity networks, then in the reporting quarter the Group has taken a substantial step forward towards improving profitability, doubling operating profit.

The consolidated gross profit for the first half of the year was 10,391 (6m 2019: 8,875) thousand euros and the gross profit margin was 14.0% (6m 2019: 12.7%). In the first six months, the consolidated operating profit (EBIT) was 3,209 (6m 2019: 1,502) thousand euros. In total, the Group’s net profit for the first half of the year was 2,674 (6m 2019: 994) thousand euros. Net profit per share increased by 164.1% compared to the comparable period and reached 0.15 (6m 2019: 0.06) euros.

Markets

Sales to the Estonian market increased to 5.7 (Q2 2019: 5.0) million euros in year-on-year comparison, accounting for 14.7% (Q2 2019: 12.4%) of consolidated revenue for the reporting quarter. The servicing of the framework procurement for Elektrilevi OÜ’s new substations has started, but some supply difficulties of materials and components caused by the crisis situation have slowed down the growth of the expected revenue on the Estonian market. In total, sales to the Estonian market have increased by 0.8 million euros to 9.4 million euros in six months, accounting for 12.6% of the 6-month consolidated revenue.

Sales in the Group’s largest market, Finland, have been declining year-on-year. The revenue of the reporting quarter decreased by 3.2 million euros to 19.0 million euros and was mostly affected by the delay in the supply of equipment. There was no major change in the revenue compared to the first half of the previous year, the six-month revenue to the Finnish market was 38.5 million euros, accounting for 52.0% of the consolidated revenue. Production of the Finnish power grid companies comprised the greater part of the sales volume. The Group has reached the delivery of the first projects in Finland with the solutions of the HECON row cabinet system product line, that was developed within the Group,  and where customers have provided positive feedback.

The revenue earned from the Swedish market in the reporting quarter was 5.9 million euros, which is 0.3 million euros more than in the second quarter of 2019. The share of the Swedish market in consolidated sales increased by 1.3 percentage points to 15.2% in the reporting quarter. In the first half of the year, revenue in Sweden increased by 1.5 million euros to 10.9 million euros, remaining as the third market. The growth was primarily ensured by the increase in sale of substations in Sweden. As at the end of the quarter, 86.2% of the orders in the framework agreement entered into in 2018 with E.ON Energidistribution AB, the largest distribution company in Sweden, had been delivered. In addition, ten compact substations were delivered to the Ellevio AB network on the Swedish market during the reporting period.

Norway ranks fourth of the Group’s markets, accounting for 11.2% of the Group’s revenue in the second quarter. The revenue earned in the reporting quarter was 4.4 million euros, decreasing by 1.1 million euros compared to the second quarter of 2019. In contrast, the Norwegian market earned 9.8 million euros in the first half of the year, an increase of 0.3 million euros. The majority of the sales volume on the Norwegian market originated from the sale of products directed at the shipbuilding sector. In addition to the Lithuanian subsidiary, the Estonian manufacturing company also contributed to the growth of the Norwegian market, sending three HEKA1SB substations to Norway in the reporting quarter.

In a quarterly comparison, sales to the Netherlands market remained at the same level, amounting to 1.8 million euros. In a six-month comparison, sales to the Netherlands market have fallen by 0.4 million euros to 3.1 million euros.

Sales to other markets increased the most, by 1.7 million euros year-on-year and in six-month. The largest of the Group’s other markets were Denmark, Germany and Poland, which generated revenue of 1.3 million, 0.3 million and 0.6 million euros, respectively, in six months.

Business segments

As is tradition, the largest part of the revenue, 85.0% in the reporting quarter and 85.4% in the first half of the year, was generated by Production, which is the main business activity of the Group. Some supply difficulties due to the special situation reduced the revenue of the Production segment by 2.8 to 33.1 million euros on a quarterly basis Supported by the increase in sales volumes of the companies of the Group that manufacture electrical equipment, the sales volume of the production segment increased by 1.7 million euros to 63.2 million euros in six months.

The revenue of the Real estate segment has decreased compared to previous periods. This is due to the temporary rent reduction agreements to ensure the tenants’ coping with the difficult situation. In Q2, lease income from the rental premises of Keila, Allika and Haapsalu Industrial Parks was earned in the amount of 0.77 (6m 2019: 0.83) million euros and 1.61 (6m 2019: 1.70) million euros in six months.

The revenue of Other activities was 5.1 million euros in the Q1, which is 1.3 million more than in the second quarter of 2019. The six-month revenue has also increased significantly: 2.5 million euros. The revenue of the project sales of electrical goods mainly originated from customers in the power network and other infrastructure fields, construction companies and the public sector; revenue of electrical installation works originated from the shipbuilding sector.

Operating expenses

Operating expenses for the reporting quarter have decreased in all expense groups – a total of 2.4 million euros. The decrease in the cost of sales outpaced the decrease in revenue by 1.7 percentage points, increasing the gross profit margin by 1.5 percentage points compared to the second quarter of 2019. Distribution expenses have decreased the most compared to the comparable quarter, by 0.3 million to 1.2 million euros, accounting for 3.2% of the Group’s operating expenses in the second quarter. The share of distribution expenses in the Group’s revenue has decreased by 0.6 percentage points year-on-year to 3.0%. While the increase in distribution costs in the comparable period was caused by the focus on export growth, then due to the global coronavirus (Covid-19), most sales work has been done virtually in the period under review. To prevent the loss-making consequences, special attention is given to the availability of materials in production units and security of supply regarding purchase and procurement activities.

Overall, the increase in operating expenses compared to the first half of the year was 2.0 percentage points lower than the increase in revenue. Operating expenses for the first half of the year totalled 71.0 (6m 2019: 68.3) million euros, of which the largest increase – 2.6 million euros was the cost of sales. The gross profit margin increased by 1.3 percentage points to 14.0 compared to the comparable period. The share of administrative expenses in the Group’s revenue was 6.0% of the revenue of the reporting quarter and 6.6% in the first six months, remaining at the same level of the Group’s operating expenses compared to both periods of the previous year.

Compared to the second quarter of 2019, labour costs for the last quarter decreased by 0.1 million euros to 6.7 million euros and increased by 0.1 million euros compared to six months. The ratio of labour costs to the Group’s revenue decreased to 18.1% (6m 2019: 19.0%) in the first half of the year. In the first six months, the cost of share option programs in the amount of 120 (6m 2019: 89) thousand euros has been recognized as labour costs.

Depreciation of non-current assets totalled 0.9 million euros in the second quarter and 1.8 million euros in the first half of the year, increasing by 58 and 88 thousand euros, respectively, compared to the comparable period.

Personnel

In order to service the increased production volumes in the new production building, the number of employees of the Lithuanian subsidiary has increased by 18 people during the year. At the same time, Estonian companies have hired less seasonal labour in the reporting quarter than in the comparable period, partly due to the restructuring and postponement of holidays. At the end of the reporting period, the Group had 829 employees, which was 19 employees less than a year ago. During the reporting quarter, the Group employed an average of 789 people, which was an average of 10 employees more than in the comparable period. In the reporting quarter, 5.3 (Q2 2019: 5.5) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,195 (Q2 2019: 2,335) euros.

Investments

In the reporting period, the Group invested a total of 2.2 (6m 2019: 3.0) million euros in non-current assets, incl. 1.3 (6m 2019: 0.2) million euros in investment properties, 0.8 (6m 2019: 2.6) million euros in property, plant and equipment and 0.1 (6m 2019: 0.2) million euros in intangible assets. In Q1, preparations for the construction of the fourth stage of expansion of the production and office building in Lithuania were started. In addition, investments were made in the construction of a production facility in the Allika Industrial Park, and plots of land were purchased.

Changes in the management of Group companies

The Supervisory Board of AS Harju Elekter decided at its meeting held on March 16, 2020 to appoint the current member of the Management Board, Tiit Atso, as Chairman of the Management Board as of May 4, 2020. The former Chairman of the Management Board, Andres Allikmäe, took the position of Head of Business Development at AS Harju Elekter, following the expiration of his Management Board member contract at 3 May 2020. The Management Board of AS Harju Elekter will continue with two members – Tiit Atso (Chairman of the Board) and Aron Kuhi-Thalfeldt (Member of the Board).

As of 1 January 2020, a new CEO has been appointed for Swedish subsidiaries SEBAB AB and Grytek AB. Mikael Schwartz Jonsson started working with the Harju Elekter Group on 1 October 2019. The long-term CEO of SEBAB AB and Grytek AB, Thomas Andersson, took the position of Sales and Marketing Director in Sweden from 1 January 2020.

Main events in the second quarter

  • In order to simplify the coordination of sales and marketing work and the management of Swedish subsidiaries, Harju Elekter decided to merge its Swedish subsidiaries SEBAB AB and Grytek AB during 2020 into one company of Harju Elekter Group.
  • The Finnish business newspaper Kauppalehti awarded Finnkumu Oy with the “Achievers 2020” title. Such acknowledgement is given to companies with a well-established economic activity, stable growth, good results and profitability, strong financial structure, and liquidity to ensure sustainable activity.
  • On 22 May 2020, the cornerstone was laid for AS Harju Elekter’s Laohotell II in Saue Parish, Allika Industrial Park. The total area of the building, which will be completed this autumn, is 3,877 square metres. Laohotell II is the fifth real estate of AS Harju Elekter to be taken into use in the 30 ha with 18 land plots Allika Industrial Park in Harku near Paldiski Road.
  • Energo Veritas OÜ closed its unprofitable Keila store as of 31 May 2020, and customer service throughout North Estonia was transferred to the company’s new sales office in Tallinn, Tuisu 19.
  • On 30 June 2020, the AGM of shareholders of AS Harju Elekter was held; it approved the 2019 annual report and the proposal for distribution of the profit and decided to pay shareholders a dividend of 0.14 euro per share for 2019, totalling 2.5 million euros. Dividends were transferred to shareholders’ bank accounts on July 21, 2020.

Events after the reporting period

In July 2020, it was decided that in September, the Lithuanian subsidiary of AS Harju Elekter, Harju Elekter UAB, will commence Step 4 of expanding its factory in Panevėžys. The construction works will be performed by Kaminta UAB and the works are scheduled to be finished in March 2021. After the construction works have been completed, the office and manufacturing area of the Lithuanian subsidiary will increase from the current 8,765 m2 to 16,761 m2. The total cost of the investment is up to 6 million euros, of which 70% will be financed by bank loan and 30% from own resources.

Investments directed at expanding the factory enable Harju Elekter UAB to double the factory revenues. Following enlargement, the number of employees will increase from the current 241 to 350.

Harju Elekter UAB focuses on providing detailed engineering of products, services and solutions and production for export for the marine and industrial sector system integrators, with delivering client-specific solutions of frequency inverters and power distribution systems. Harju Elekter UAB has DNV GL and RINA certificates.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.39 euros.

AS HARJU ELEKTER
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30.06.2020
Unaudited
EUR’000
ASSETS              30.06.20               31.12.19
Cash and cash equivalents 3,906 4,878
Trade receivables and other receivables 26,788 22,958
Prepayments 1,879 1,166
Inventories 21,958 19,010
TOTAL CURRENT ASSETS 54,531 48,012
Deferred income tax asset 517 472
Non-current financial investments 8,047 10,494
Investment property 22,173 21,259
Property, plant and equipment 19,918 20,402
Intangible assets 7,199 7,260
TOTAL NON-CURRENT ASSETS 57,854 59,887
TOTAL ASSETS 112,385 107,899
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 6,772 11,305
Advances from customers 2,824 2,212
Trade payables and other payables 24,202 16,448
Tax liabilities 3,559 2,959
Short-term provision 160 34
TOTAL CURRENT LIABILITIES 37,517 32,958
Interest-bearing loans and borrowings 8,264 7,901
Other long-term liabilities 97 64
NON-CURRENT LIABILITIES 8,361 7,965
TOTAL LIABILITIES 45,878 40,923
Share capital 11,176 11,176
Share premium 804 804
Reserves 2,673 3,412
Retained earnings 52,003 51,699
TOTAL OWNERS’ EQUITY 66,656 67,091
Non-controlling interests -149 -115
TOTAL EQUITY 66,507 66,976
TOTAL LIABILITIES AND OWNERS’ EQUITY 112,385 107,899

 

CONSOLIDATED STATEMENT OF PROFIT AND LOSS

1-6/2020

Unaudited
EUR’000 Q2 2020 Q2 2019 6M 2020 6M 2019
Revenue 39,014 40,606 74,012 69,889
Cost of sales -33,546 -35,519 -63,621 -61,014
Gross profit 5,468 5,087 10,391 8,875
Distribution costs -1,180 -1,474 -2,488 -2,682
Administrative expenses -2,333 -2,450 -4,895 -4,634
Other income 275 83 327 131
Other expenses -74 -51 -126 -188
Operating profit 2,156 1,195 3,209 1,502
Finance income 71 24 108 125
Finance costs -46 -61 -147 -104
Profit before tax 2,181 1,158 3,170 1,523
Income tax expense -210 -329 -496 -529
Profit for the period, attributable to 1,971 829 2,674 994
owners of the Company 1,979 843 2,708 1,025
non-controlling interests -8 -14 -34 -31
Basic earnings per share  (EUR) 0.11 0.05 0.15 0.06
Diluted earnings per share  (EUR) 0.11 0.05 0.15 0.06

Interim report 1-6/2020

Tiit Atso
Chairman of the Management Board
+372 674 7400

Harju Elekter invests up to 6 million euros in factory expansion of the Lithuanian subsidiary

In September, the Lithuanian subsidiary of AS Harju Elekter, Harju Elekter UAB, will commence Step 4 of expanding its factory in Panevėžys. The construction works will be performed by Kaminta UAB and the works are scheduled to be finished in March 2021. After the construction works have been completed, the office and manufacturing area of the Lithuanian subsidiary will increase from the current 8,765 m2 to 16,761 m2. The total cost of the investment is up to 6 million euros, of which 70% will be financed by bankloan and 30% from own resources.

Investments directed at expanding the factory enable Harju Elekter UAB to double the factory revenues and increase the number of employees from 241 to 350.

Harju Elekter UAB provides detail engineering, contract manufacturing and full load testing services for marine and industrial system integrators. Harju Elekter UAB main competences are liquid cooled multidrive systems and switchgear, factory has DNV GL and RINA Manufacturing Survey Arrangements (MSA) for in house marine class society certification.

The Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sale of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal production factory in Estonia, as well as the development and leasing of industrial real estate. Over 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter, with the Group’s sales revenue amounting to EUR 143.4 million in 2019. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

Tiit Atso
Chairman of the Management Board
6 747 400

Prepared by:
Ursula Joon
Lawyer
6 747 413

 

Dividend payment ex-date of Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 14.07.2020 at the end of the working day of the settlement system.

Proceeding from the above, the ex-date is 13.07.2020. From that date the new owner of the shares is not entitled to dividends for the year 2019.

AS Harju Elekter will pay dividend 0.14 euros per share on 21.07.2020 by a transfer to the bank account of the shareholder.

 

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:
Ursula Joon
Lawyer
+372 674 7413

AGM decisions

Today, on 30 June 2020 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 52 shareholders and their authorised representatives who represented the total of 11,478,288 votes accounting for 64.70 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2019;
2. Approval to profit distribution

1. Approval to AS Harju Elekter annual report of the year 2019

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2019, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 107,899 thousand euros as of 31.12.2019, while the sales revenue of the financial year was 143,397 thousand euros and net profit 2,367 thousand euros.

The number of the votes given in favor of the resolution was 11,450,687 which accounted for 99.76% of the voted participants.

2. Approval to profit distribution

The general meeting resolved:
To approve the profit distribution proposal of AS Harju Elekter of 2019 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2019

49,238,503 euros

total net profit 2019, attributable to owners of the parent company

2,460,606 euros

total retained profit on 31.12.2019

51,699,109 euros

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

dividends (0,14 euros per share*)

 2,483,583 euros

balance carried forward after profit distribution

49,215,526 euros

*The shareholders registered in the shareholders’ registry on 14 July 2020 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 13 July 2020. From that date the new owner of the shares is not entitled to dividends for the year 2019. The dividends will be paid to the shareholders on 21 July 2020 by a transfer to the bank account of the shareholder.

The number of the votes given in favor of the resolution was 11,461,073 which accounted for 99.85 % of the voted participants.

Tiit Atso
Chairman of the Management Board
+372 674 7400

 

Prepared by:

Ursula Joon
Lawyer
+372 674 7413

Harju Elekter notice of the AGM

AS HARJU ELEKTER NOTICE OF THE ANNUAL GENERAL MEETING

Annual general meeting of Harju Elekter shareholders will be held on Tuesday, 30 June 2020, 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 and proposals to the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2019.

To approve the annual report of AS Harju Elekter of 2019, prepared by the Management Board and approved by the Supervisory Board, according to which the consolidated balance sheet total of AS Harju Elekter was 107,899 thousand euros as of 31.12.2019, while the revenue of the financial year was 143,397 thousand euros and net profit 2,367 thousand euros.

2. Approval to profit distribution.

Due to the past emergency situation, and uncertainty about the future economic outlook due to the spread of the coronavirus, the Management Board decided to change the previously published dividend proposal and reduced it from the initial 0,18 euros per share to 0,14 euros per share.

To approve the profit distribution proposal of AS Harju Elekter of 2019 as presented by the Management Board and as approved by the Supervisory Board as follows:

Retained profit from previous periods on 31.12.2019                                                             49,238,503 euros

Total net profit 2019, attributable to owners of the parent company                                         2,460,606 euros

Total retained profit on 31.12.2019                                                                                        51,699,109 euros

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

Dividends (0,14 euros per share*)                                                                                             2,483,583 euros

Balance carried forward after profit distribution                                                                       49,215,526 euros

*The shareholders registered in the shareholders’ registry on 14 July 2020 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 13 July 2020. From that date the new owner of the shares is not entitled to dividends for the year 2019. The dividends will be paid to the shareholders on 21 July 2020 by a transfer to the bank account of the shareholder.

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 15 June 2020.

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 27 June 2020. 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.com 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 2019, 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@harjuelekter.com. 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 22 June 2020 as of the end of the business day in the accounting system. Registration of the participants starts on 30 June 2020 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@harjuelekter.com or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 28 June 2020 to the secretariat of AS Harju Elekter at Paldiski Road 31 (3rd floor) in Keila.

With the intent to maintain the health of the shareholders and to limit the number of participants at the general meeting, the Management Board of AS Harju Elekter offers an opportunity to designate the Company lawyer Ursula Joon as your representative, providing her with specific guidelines for voting for each item under a power of attorney. You can find the form of the power of attorney on the Company website www.harjuelekter.com

Tiit Atso
Chairman of the board
+372 674 7400

Year Book 2019

Harju Elekter will merge its Swedish subsidiaries

In order to simplify the coordination of sales and marketing work and the management of Swedish subsidiaries, Harju Elekter decided to merge its Swedish subsidiaries SEBAB AB and Grytek AB during 2020 into one company of Harju Elekter Group.

Harju Elekter Group is 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 800 specialists, and 2019 sales revenue of the Group was 143.4 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Tiit Atso
Member of the Management Board
+372 674 7400

 

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

 

Harju Elekter Group financial results, 1-3/2020

Commentary from the Management

Harju Elekter began the year with ambitious plans and goals. Market information and customer estimates were optimistic, in addition, extensive procurement contracts carried over from previous periods. Business activity was already active in all fields at the beginning of the year, key personnel within the Group were actively communicating with customers and partners, and development teams were utilised to the maximum. As with all businesses around the world, a new reality also hit our companies in four countries at the end of the quarter. The explosive spread of the coronavirus (Covid-19) around the world brought along the implementation of an emergency situation both in Estonia and in all of our markets. It is important to note that both we and our partners were able to quickly adapt our activity plans to the crisis that had developed, and we proceeded with what were essentially our original plans and budgets. Different measures were implemented to ensure the sustainability of business activities, and communication methods with partners were significantly changed; factories received strict rules of control and virus protection. Remote working, constant monitoring of the situation and operative information exchange became important.

All in all, Q1 economic results for the Group were good, and the coronavirus pandemic did not have a direct impact on the results. Production resources were operating under load, supply chains were operational, customers continued with orders, and we managed to avoid our employees falling ill with the virus. The consolidated unaudited revenue of Q1 2020 increased by 19.5% compared to the comparable period and was 35.0 (Q1 2019: 29.3) million euros. Consolidated operating profit (EBIT) was 1,053 thousand euros, surpassing the y-o-y figure threefold, and the net profit was 703 (Q1 2019: 165) thousand euros, and earnings per share (EPS) was 0.04 (Q1 2019: 0.01) euros.

Key indicators

Change y-o-y January – March Year
(thousand euros) 2020 2019 2019
Revenue 19.5% 34,998 29,283 143,397
Gross profit 30.0% 4,923 3,788 18,244
EBITDA 66.5% 1,943 1,167 6,791
EBIT 243.1% 1,053 307 3,273
Profit for the period 326.3% 703 165 2,367
incl attributed to Owners of the Company 300.2% 728 182 2,460

Revenue and profit

The consolidated revenue of the Group was 35.0 million euros in Q1 2020. Despite the low point in the economy, revenue increased in all of the Group’s production companies. In the comparison of the reporting quarter, consolidated revenue increased by 19.5%, including the sale of electrical equipment increased the most: 4.7 million euros. The revenue earned from the sale of electrical equipment comprised 96.7% of the sales volume of the Production segment and 86.4% of the consolidated revenue. The remaining 13.6% of the revenue of the Group was earned from the sale of metal products, project and retail sale of electrical goods, leasing out industrial real estate, and electrical works in the shipbuilding sector. The Group is yet to observe any increased uncertainty in the revenue trends of the following quarters caused by the coronavirus pandemic, but potential surprises certainly cannot be ruled out in this regard. Despite the overall difficult situation, the Group’s customers under framework agreements have started the year with estimated volumes, and orders have been received for the major part of volumes planned for the first half of the year.

The consolidated gross profit for the reporting quarter was 4,923 (Q1 2019: 3,788) thousand euros, the gross margin was 14.1% (Q1 2019: 12.9%). Consolidated operating profit (EBIT) for the first quarter was 1,053 (Q1 2019: 307), three times higher than in the same period last year. The operating margin for the first quarter was 3.0%. The consolidated net profit for the reporting quarter was 703 (Q1 2019: 165) thousand euros of which the share of the owners of the Parent company amounted to 728 (Q1 2019: 182) thousand euros. Earnings per share (EPS) was 0.04 (Q1 2019: 0.01) euros in the first quarter. While the low profitability of the comparable period was affected by the increase in production input prices and wages, as well as the underload of production due to the lower than expected order volume of Finnish electricity networks, then in the reporting quarter the Group has taken a significant step forward towards improving profitability.

Markets

The Group’s Estonian companies continue to contribute to the home market activities by participating in procurements, selling electrical equipment for retail and project sales, and offering different industrial rental spaces for corporate customers. Sales to the Estonian market increased 80 thousand euros to 3.6 (Q1 2019: 3.5) million euros in the quarterly comparison, accounting for 10.3% (Q1 2019: 12.0%) of the consolidated revenue for the reporting quarter. Servicing the new framework procurement of Elektrilevi OÜ has energetically begun, and the first substations have been delivered to the customer. The sale of HETR-series power distribution and metering cabinets has also increased.

The Finnish market contributed the most to the increase in consolidated revenue in this reporting period; in the comparison of quarters, sales increased by 3.3 million euros to 19.5 million euros. A total of 55.6% (Q1 2019: 55.1%) of Harju Elekter’s products and services were sold to the Group’s largest market in Q1. Production of the Finnish power grid companies comprised the greater part of the sales volume. In Q1, 350 substations were realised on the Finnish market, which is 4% more than in the previous year. The Group has reached the delivery of the first projects in Finland with the solutions of the HECON product line, that was developed within the Group, and where customers have provided positive feedback.

Norway is the second largest Group market, accounting for 15.5% of the Group’s revenue. The revenue earned in the reporting quarter was 5.4 million euros, increasing by 1.4 million euros compared to the first quarter of 2019. The majority of the sales volume on the Norwegian market originated from the sale of products directed at the shipbuilding sector.

The share of the Swedish market in the consolidated revenue grew in the reporting period by 1.6 percentage points to 14.3%, remaining a close third after Norway among markets.  In the reporting quarter, the revenue earned from the Swedish market was 5.0 million euros, which is 1.3 million euros more than in the comparable period. The growth was primarily ensured by the increase in sale of substations in Sweden. As at the end of the quarter, 85% of the orders in the framework agreement entered into in 2018 with E.ON Energidistribution AB, the largest distribution company in Sweden, had been delivered. In addition, ten compact substations were delivered to the Ellevio AB network on the Swedish market in the reporting period, which is a record result for the Estonian production company.

In a quarterly comparison, sales to the Netherlands market decreased by 0.3 million euros to 1.2 million euros, accounting for 3.6% (Q1 2019: 5.4%) of the consolidated revenue for the reporting quarter.

Business segments

The Group’s operations are divided into three segments – Production, Real estate and Other activities. The activities in the Production segment are design, sale, production and after-sale service of electricity distribution, switching and transformation equipment as well as automatics, process management and engine control equipment. The Real estate segment covers development, project management, leasing and other related services of industrial real estate property to leasing partners and Group companies. Other activities encompass all other non-segmented operating areas where each area is not large enough to form a separate segment. Such activities are, for example, management of financial investments, retail and project sale of electrical goods and electricity installation works for shipbuilding.

Traditionally, the largest part of the revenue, 89.4% (Q1 2019: 87.3%), was generated by Production, which is the main business activity of the Group. Supported by the increase in sales volumes of the companies of the Group that manufacture electrical equipment, the sales volume of the production segment increased by 22.3% to 31.3 million euros in three months.

The revenue of the Real estate segment has been stable and has mostly been affected by changes in rental premises, and changes in rent prices to some extent. In Q1, rental income from the rental premises of Keila, Allika and Haapsalu Industrial Parks was earned in the amount of 0.83 million euros, making up 2.4% (Q1 2019: 3.0%) of the total revenue of the Group. We estimate a slight decline in rental income for subsequent quarters, to ensure the tenants’ coping with the difficult situation.

The revenue of Other activities was 2.9 million euros in the Q1 and significant change has not occurred compared to the reference period. The revenue of the project sales of electrical goods mainly originated from customers in the power network and other infrastructure fields, construction companies and the public sector; revenue of electrical installation works originated from the shipbuilding sector.

Operating expenses

The total operating expenses for the reporting quarter were 33.9 (Q1 2019: 28.9) million euros. The principal part of the cost increase is attributable to the higher amount of cost of sales: 4.6 million euros in the quarterly comparison. The increase in the cost of sale provided was surpassed by sales growth by 1.5 percentage points, increasing the gross profit margin by 1.2 percentage points, compared to the Q1 2019 figures. Other operating expenses increased by 0.5 million euros compared to the comparable period. The largest growth – 17.3% – was in administrative expenses. The share of administrative expenses in the Group’s revenue comprised 7.3% (Q1 2019: 7.5%) of the revenue in the reporting period, remaining at the same level in the Group’s business expenses compared to Q1 of the previous year, i.e., at 7.5%. Distribution costs have decreased by 0.1 million to 1.3 million euros compared to the comparable quarter, accounting for 3.9% of the Group’s total operating expenses. The share of distribution expenses in the Group’s revenue has decreased by 0.4 percentage points to 3.7% year-on-year comparison. In summary, the increase of business expenses in Q1 was 2.0 percentage points smaller than the increase in revenue.

The increase in sales volumes and the expansion of production in the Lithuanian subsidiary has brought along the requirement for additional workforce and utilisation of overtime, as well. In addition, the costs of the share option program were reflected as labour costs in the amount of 59 (Q1 2019: 44) thousand euros in the reporting quarter. Labour costs increased by 0.3 to 6.6 million euros year-on-year comparison. The ration of labour costs to the Group’s revenue continued to decrease year-on-year comparison, being 19.0% (Q1 2019: 21.8%).

Depreciation of non-current assets was included in expenses in the first quarter in the total amount of 0.9 million euros, which is not significantly higher than in the first quarter of 2019.

Personal

As of the end of the reporting period, the Group had 797 employees, being 53 employees more than a year ago. The change was caused by a significant increase in production volume in the Lithuanian subsidiary. During the reporting year, the Group employed an average of 776 people, which was an average of 43 employees more than in the comparable period. In the reporting quarter, 5.0 (Q1 2019: 5.1) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,130 (Q1 2019: 2,303) euros.

Investments

In the reporting period, the Group invested a total of 1.1 (Q1 2019: 1.9) million euros in non-current assets, incl. 0.7 (Q1 2019: 0.2) million euros in investment properties, 0.4 (Q1 2019: 1.6) million euros in property, plant and equipment and 0.03 (Q1 2019: 0.1) million euros in intangible assets. In Q1, preparations began for the fourth stage of construction for the production and office building in Lithuania. In addition, investments were made in the construction of a production facility in the Allika Industrial Park, and plots of land were purchased. Major investments are knowingly directed into the upcoming quarters, observing the general state of the world. Investments are made in unavoidable areas, which are directly necessary to organise production and perform contracts.

Main events in the first quarter

  • The Supervisory Board of AS Harju Elekter decided at its meeting held on March 16, 2020 to appoint the current member of the Management Board, Tiit Atso, as Chairman of the Management Board as of May 4, 2020. The current Chairman of the Management Board Andres Allikmäe will take the position of Head of Business Development at AS Harju Elekter, following the expiration of his Management Board member contract at 3 May 2020. The Management Board of AS Harju Elekter will continue with two members – Tiit Atso (Chairman of the Board) and Aron Kuhi-Thalfeldt (Member of the Board).
  • In order to simplify the coordination of sales and marketing activities and the management of Finnish subsidiaries, Harju Elekter decided to merge its subsidiaries Finnkumu Oy and Kiinteistö Oy Ulvilan Sammontie 9 with Satmatic Oy in 2020. The next step is to transfer all real estate properties located in Finland to Harju Elekter Kiinteistö Oy.
  • In the first quarter, the Swedish subsidiary of Harju Elekter, SEBAB AB, won three significant procurement wins for the supply of its products to the Swedish energy distribution sector. The total volume of the projects is 5.7 million euros, and deliveries will take place this year, mainly in the first half of the year.
  • AS Harju Elekter Elektrotehnika received a follow-up order for the delivery of data warehouse substations, which were delivered in 2019 to Singapore.
  • In Saue municipality, near Allika Industrial Park, two plots of land with a total area of 14.6 ha were purchased. The properties were acquired for the purpose of building solar power plants as well as possible real estate developments.
  • At the beginning of February, Harju Elekter Group participated in the largest electrical trade fair of the year Sähkö, Tele, Valo & AV, in Jyväskylä, Finland. The Group’s companies converged on a common stand where they showcased a wide variety of the Group’s products and services, including the HECON line system of the MCC, developed in the Group for 2500–4000 A solutions, and substation models designed to be suitable for Nordic requirements.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 3.61 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-3/2020

AS HARJU ELEKTER
CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31.03.2020
Unaudited
EUR’000
ASSETS           31.03.20           31.12.19
Cash and cash equivalents       3,978    4,878
Trade receivables and other receivables    24,035   22,958
Prepayments       1,421      1,166
Inventories 22,620 19,010
TOTAL CURRENT ASSETS 52,054 48,012
Deferred income tax asset 494 472
Non-current financial investments 8,631 10,494
Investment property 21,743 21,259
Property, plant and equipment 20,180 20,402
Intangible assets 7,205 7,260
TOTAL NON-CURRENT ASSETS 58,253 59,887
TOTAL ASSETS 110,307 107,899
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 8,320 11,305
Advances from customers 2,479 2,212
Trade payables and other payables 21,527 16,448
Tax liabilities 3,412 2,959
Short-term provision 217 34
TOTAL CURRENT LIABILITIES 35,955 32,958
Interest-bearing loans and borrowings 7,900 7,901
Other long-term liabilities 63 64
NON-CURRENT LIABILITIES 7,963 7,965
TOTAL LIABILITIES 43,918 40,923
Share capital 11,176 11,176
Share premium 804 804
Reserves 2,088 3,412
Retained earnings 52,461 51,699
TOTAL OWNERS’ EQUITY 66,529 67,091
Non-controlling interests -140 -115
TOTAL EQUITY 66,389 66,976
TOTAL LIABILITIES AND OWNERS’ EQUITY 110,307 107,899
CONSOLIDATED STATEMENT OF PROFIT AND LOSS 1-3/2020
Unaudited
EUR’000 Q1 2020 Q1 2019
Revenue 34,998 29,283
Cost of sales -30,075 -25,495
Gross profit 4,923 3,788
Distribution costs -1,308 -1,208
Administrative expenses -2,561 -2,183
Other income 52 48
Other expenses -53 -138
Operating profit 1,053 307
Finance income 37 101
Finance costs -102 -43
Profit before tax 988 365
Income tax expense -285 -200
Profit for the period, attributable to 703 165
owners of the Company 728 182
non-controlling interests -25 -17
Basic earnings per share  (EUR) 0.04 0.01
Diluted earnings per share  (EUR) 0.04 0.01

Interim report 1-3/2020

Tiit Atso
CFO
+372 674 7400

Audited annual report 2019

AS Harju Elekter presents its consolidated audited Annual Report for 2019 together with Independent Auditors’ Report, approved by the Supervisory Board on 27th of March 2020. The same report is available on NASDAQ Tallinn website, as well as on issuer’s home page www.harjuelekter.com

Consolidated sales revenue for the reporting year reached 143.4 million euros, the consolidated operating profit was 3.3 million euros and consolidated net profit 2.5 million euros. The financial results remained unchanged, compared to the preliminary disclosure on 21st of February 2020.

Audited financial results for the year 2019  have been included as an attachment to this announcement.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

 

Annual Report 2019

Year Book 2019

 

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

Appointment of the Chairman of the Management Board

The Supervisory Board of AS Harju Elekter decided at its meeting held on March 16, 2020 to appoint the current member of the Management Board, Tiit Atso, as Chairman of the Management Board as of May 4, 2020.

Tiit Atso (born 1982) has extensive experience in financial management, holding the position of Chief Financial Officer of Harju Elekter Group since 2014 and member of the Management Board since 2016. Prior to that, Tiit Atso has worked in several financial positions, previously as Financial Manager for development projects (2012-2014) and Financial Controller (2010-2012) at Viru Keemia Grupp AS and as Audit Project Leader at Deloitte Audit Eesti AS (2007-2010). Tiit Atso holds a bachelor’s degree in Financial and Management Accounting and a master’s degree in Environmental Economics from Tallinn University of Technology. Tiit Atso does not own shares of AS Harju Elekter.

Starting from May 4, 2020 the Management Board of AS Harju Elekter will continue with two members – Tiit Atso (Chairman of the Board) and Aron Kuhi-Thalfeldt (Member of the Board).

Harju Elekter Group is 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 800 specialists, and 2019 sales revenue of the Group was 143 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Endel Palla
Chairman of the Supervisory Board
+372 5047785

Harju Elekter Group financial results, 1-12/2019

Commentary from the Management

The activities of Harju Elekter Group in 2019 could be aptly described using the keywords “changes” and “reorganisation”. Changing environment and future-orientated challenges in incorporating and reorganising the business structure of the Group did not make achievement of the results easy. Nevertheless, we successfully managed to increase our revenue to 143.4 (+ 18.7%) million euros and our operating profit (EBIT) to 3.3 (+35.6%) million euros. Expectations for higher profitability were not met due to delays in complex major projects and higher-than-expected costs in Sweden, but also due to the underutilization of Estonian companies as a result of significant changes in the Finnish substation market. At the same time, we are proud of the group’s Lithuanian and Finnish production companies for achieving their best results ever.

In coordination with the Supervisory Board, the Group’s Management Board will propose to pay dividends to the shareholders 0.18 euros per share, totaling 3.2 million euros.

Key indicators

January – December

October – December

(thousand euros)

2019

2018

Change %

2019

2018

Change %

Sales revenue

143,397

120,804

18.7%

31,246

31,669

-1.3%

Gross profit

18,244

15,976

14.2%

3,995

4,867

-17.9%

EBITDA

6,791

5,001

35.8%

1,112

1,701

-34.6%

EBIT

3,273

2,413

35.6%

210

1,007

-79.1%

Profit for the period

2,367

1,514

56.3%

55

736

-92.5%

incl attributed to Owners of the Company

2,460

1,546

59.1%

77

735

-89.5%

Revenue and profit

The Group develops and manufactures electrical equipment, control and power automation devices and various metal products, totaling approximately 95% of the Group’s revenue. In addition, revenue is also earnt from the rental of industrial real estate and electricity works in the shipbuilding sector. Revenue in the reporting quarter was as expected, considering the seasonality, and remained at the similar level, 31.2 (Q4 2018: 31.7) million euros, as in the comparison period. During the reporting year the Group’s revenue continued the increase being 18.7% higher than in the comparable period, reaching 143.4 (2018: 120.8) million euros. The major part of the increase in the Group’s revenue came from sales of electrical equipment: 0.8 million euros for the quarterly comparison and 28.0 million euros for the 12 months comparison. Primarily, the volumes of electrical equipment, produced in Lithuania and sold to the shipping and industrial sectors, have increased.

The consolidated gross profit for the reporting quarter was 3,995 (Q4 2018: 4,867) thousand euros, the gross margin was 12.8% (Q4 2018: 15.4%). Consolidated operating profit (EBIT) for the fourth quarter was 210 (Q4 2018: 1,007) thousand euros and the consolidated net profit was 55 (Q4 2018: 736) thousand euros. Low profitability was mostly influenced by an increase in sales of lower margin products on the Swedish market, postponement of deadlines of several large projects by clients, changes in the Swedish krona exchange rate, underutilization of the production capacity of Estonian companies in relation to a decreasing volume of orders from the Finnish power grid networks, and allowances for several receivables and inventories.

The consolidated gross profit for the reporting year was 18,244 (2018: 15,976) thousand euros and the gross margin was 12.7% (2018: 13.2%). Consolidated operating profit (EBIT) was earned in the reporting year 3,273 (2018: 2,413) thousand euros. Overall, the consolidated net profit of the reporting year was 2,367 (2018: 1,514) thousand euros and earnings per share (EPS) was 0.14 (2018: 0.09) euros.

Markets

The Group’s Estonian companies continue to contribute to the home market activities by participating in procurements, selling electrical products for retail and project sales, and offering different industrial rental premises for corporate customers. Sales to the Estonian market decreased 1.2 million euros to 3.5 (Q4 2018: 4.7) million euros in the quarterly comparison. In 12 months, sales to Estonia increased by 1.3 million euros compared to 2018, reaching 16.7 (2018: 15.4) million euros. Nevertheless, the share of the Estonian market in consolidated revenue is declining due to the growth of the foreign market, making up 11.3% and 11.7% respectively (Q4 2018: 15.1% and 2018: 12.8%).

The quarterly and 12 months revenue for the Finnish market has decreased to 14.8 and 71.8 (Q4 2018: 16.2 and 12 months: 75.5) million euros respectively. The decrease in revenue was most affected by the adjustment of the renovation plan of Finnish power grid construction projects to a smaller volume than originally planned. However, the sales in the other electrical equipment increased. In the reporting quarter, Finland market accounted for 47.4% (Q4 2018: 51.2%) and in the 12 months, 50.1% (2018: 62.5%) of the Group’s consolidated revenue. Although its share is 12.4 percentage points less than in the previous period, it continues to be the largest market in the Group. The decrease in the Finnish market share of the Group’s revenue was affected by the growth of revenue in Sweden, Norway and Netherland.

In the reporting quarter, revenue from the Swedish market was 4.8 (Q4 2018: 5.1) million euros, which is 0.3 million euros less than in the comparable period. At the same time, revenue for the reporting year increased by 44.5% or 6.0 million euros to 19.5 million euros. The growth was ensured by an increase in the sales of substations in Sweden and adding bigger projects to the Swedish subsidiary. The share of the Swedish market in the consolidated revenue rose, reaching 13.6% (2018: 11.2%) in the reporting quarter year.

As a result of the Group’s Lithuanian subsidiary’s successful sales, sales to the Norwegian market have increased the most. Revenue for the quarter was 3.8 (Q4 2018: 3.0) million euros and for the twelve months totalled 21.6 (2018: 8.7) million euros, increasing by 23.5% and 148.1%, respectively. Multiplied sales to the Norwegian market have increased their market share to 15.0% (2018:7.2%) of the Group’s sales in 12 months and raised the Norwegian market to second position in the Group’s markets.

From the second half of 2018, the Group started deliveries and supplies to the Netherlands, where we have managed to achieve a stable revenue growth. In quarterly comparison, sales to the Netherland market increased by 1.5 million euros and in the 12 months by 7.3 million euros. The Netherlands made up 8.6% (Q4 2018: 3.9%) of the consolidated revenue in the reporting quarter and 7.2% (2018: 2.4%) in the reporting year.

Business segments

In the reporting quarter, revenue of the Production segment was 26.7 million euros. Revenue for the 12 months has increased compared to the previous year by 25.0 euros, to 124.8 million euros accounting for 87.1% (2018: 82.6%) of the Group’s revenue. The Lithuanian company, whose production capacity has increased significantly thanks to the opening of a new production building, has contributed the most to the increase in the revenue of the Production segment, which revenues have tripled.

Revenue in the Real Estate segment remained at 0.8 million euros in the quarterly comparison, since new production and warehousing premises at Allika Industrial Park were already leased out during the last quarter of 2018. The revenue has increased by 24.8% to 3.3 (2018: 2.6) million euros for the 12 months, accounting for 2.3% (2018: 2.2%) of the Group’s reporting year revenue. Rental income is earnt from rental premises in the Allika, Keila and Haapsalu industrial parks.

The revenue of Other activities in the quarter has decreased by 0.5 million euros, to 3.8 million euros year-on-year and for the yearly comparison decreased by 3.1 million euros to 15.3 million euros. Compared with the comparable period, the reduction is caused by large-volume electrical works projects in the shipbuilding sector in the first half of 2018.

Operating expenses

Operating expenses in the reporting quarter were 31.1 (Q4 2018: 30.6) million euros and of the reporting year were 140.1 (2018: 118.3) million euros in total. The main reason for the reporting year expenses growth was the unexpectedly higher project implementation costs in Sweden that was partly affected by the change in the Swedish krona. The principal part of the cost increase is attributable to the higher amount of cost of sales: 0.5 million euros in the quarterly and 20.3 million euros in the yearly comparison. The increase in the cost of sales overtook sales growth by 0.7 percentage points, reducing the gross margin by 2.6 and 0.5 percentage points compared to the comparison periods. Distribution costs have decreased by 0.1 million compared to the comparable quarter and increased by 0.4 million euros compared to the 12 months. The ratio of marketing expenses to Group revenue has decreased, quarterly and for the 12 months, accounting for 4.8% and 4.0% respectively (Q4 2018: 5.2% and 2018: 4.4%). The Group’s companies have participated in several professional fairs and they actively search for possibilities to increase business volumes.

The addition of new employees to expand operations in the Lithuanian subsidiary and the wage pressure resulting from the demand for local skilled labour, have increased labour costs in the reporting period. In addition, the costs of the share option programmes in the amount of 189 (2018: 97) thousand euros were reflected as labour costs in the reporting year. Labour costs increased by 6.9%, to 7.2 million euros year-on-year and by 7.9% to 26.7 million euros in the 12 months comparison. The ration of labor costs to revenue increased to 23% (Q4 2018: 21.2%) in the quarter and decreased to 18.6% (2018: 20.5%) compared to previous year.

The innovative production line and buildings that were taken into use increased the depreciation of non-current assets by 0.2 million euros, to 0.9 million euros year-on-year and by 0.9 million euros to 3.5 million euros in the 12 months comparison.

Personnel

As of the end of the reporting period, the Group had 791 employees, being 55 employees more than a year ago. The change was caused by a significant increase in production volume in the Lithuanian subsidiary. During the reporting year, the Group employed an average of 778 people, which was an average of 65 employees more than in the comparable period. In the reporting quarter, 5.8 (Q4 2018: 4.5) and during the 12 months 21.4 (2018: 18.5) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,296 euros, an increase of 6% to the comparable period. The decision of the Republic of Lithuania to calculate part of the social tax as the gross salary of the employee had an impact on the Group’s salary costs but this did not have a significant impact on the labour costs of the Group.

Investments

In the reporting period, the Group invested a total of 5.5 million euros in non-current assets, incl. 0.9 million euros in investment properties, 4.2 million euros in property, plant and equipment and 0.4 million euros in intangible assets. Most of the investment, 3.2 million euros, was directed to the extension of the Lithuanian subsidiary’s production facility, construction of the infrastructure needed to service it, and purchasing new production equipment. The rest of the investments were placed into integration of the new sale office and the central warehouse of the Estonian subsidiary, and into the development projects of the Group’s companies and industrial parks. In the comparable period, a total of 10.6 million euros were invested into non-current assets, of which 1.0 million euros was through business combinations. The remaining amount was used for the subsidiary’s Prima Power production line, construction of the Allika industrial park and Haapsalu solar power plant.

Main events in the fourth quarter

  • AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, won a tender from Elektrilevi OÜ for the supply of 630 kVa and 1000 kVa prefabricated substations and these components. Totally 27.8 million euros amounted in the 62-months contract period.
  • Telesilta Oy, a subsidiary of AS Harju Elekter, and Uudenkaupungin Työvene Oy have signed a contract for electrical turnkey delivery for workboat series to Finnish Coast Guard. The contract price is around 4 million euros and work will be carried out on years 2020 to 2023.

Events after the reporting period

  • In order to simplify the coordination of sales and marketing activities and the management of Finnish subsidiaries, Harju Elekter decided to merge its subsidiaries Finnkumu Oy and Kiinteistöyhtiö Oy Ulvilan Sammontie 9 with Satmatic Oy in 2020. The next step is to transfer all the Harju Elekter’s real estate in Finland to Harju Elekter Kiinteistöyhtiö Oy and then rename Satmatic Oy to Harju Elekter Oy.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.21 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2019

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,31.12.2019
Unaudited
EUR’000
ASSETS           30.09.19         31.12.18
Cash and cash equivalents 4,878 3,142
Trade receivables and other receivables 22,958 22,218
Prepayments 1,166 1,173
Inventories 19,010 17,468
TOTAL CURRENT ASSETS 48,012 44,001
Deferred income tax asset 472 98
Other long-term financial investments 10,494 9,587
Investment property 21,259 19,804
Property, plant and equipment 20,402 17,403
Intangible assets 7,260 7,260
TOTAL NON-CURRENT ASSETS 59,887 54,152
TOTAL ASSETS 107,899 98,153
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 11,305 6,656
Advances from customers 2,212 1,740
Trade payables and other payables 16,448 14,911
Tax liabilities 2,959 2,409
Short-term provision 34 14
TOTAL CURRENT LIABILITIES 32,958 25,730
Interest-bearing loans and borrowings 7,901 5,449
Other long-term liabilities 64 35
NON-CURRENT LIABILITIES 7,965 5,484
TOTAL LIABILITIES 40,923 31,214
Share capital 11,176 11,176
Share premium 804 804
Reserves 3,412 2,665
Retained earnings 51,699 52,316
TOTAL OWNERS’ EQUITY 67,091 66,961
Non-controlling interests -115 -22
TOTAL EQUITY 66,976 66,939
TOTAL LIABILITIES AND OWNERS’ EQUITY 107,899 98,153
CONSOLIDATED INCOME STATEMENT,  1-12/2019
Unaudited
EUR’000 Q4 2019 Q4 2018   12m 2019   12m 2018
Revenue 31,246 31,669 143,397 120,804
Cost of sales -27,251 -26,802 -125,153 -104,828
Gross profit 3,995 4,867 18,244 15,976
Distribution costs -1,508 -1,623 -5,706 -5,267
Administrative expenses -2,300 -2,224 -9,229 -8,223
Other income 85 64 255 124
Other expenses -62 -77 -291 -197
Operating profit 210 1,007 3,273 2,413
Finance income 4 16 139 157
Finance costs -58 -27 -225 -63
Profit before tax 156 996 3,187 2,507
Income tax expense -101 -260 -820 -993
Profit for the period, attributable to 55 736 2,367 1,514
owners of the Company 77 735 2,460 1,546
non-controlling interests -22 1 -93 -32
Basic earnings per share  (EUR) 0.00 0.04 0.14 0.09
Diluted earnings per share  (EUR) 0.00 0.04 0.14 0.09

Interim report 1-12/2019

Tiit Atso
CFO
+372 674 7400

 

Harju Elekter merges Finnish subsidiaries

In order to simplify the coordination of sales and marketing work and the management of Finnish subsidiaries, Harju Elekter decided to merge its subsidiaries Finnkumu Oy and Kiinteistöyhtiö Ulvilan Sammontie 9 with Satmatic Oy in 2020. The next step is to transfer all the Harju Elekter’s real estate in Finland to Harju Elekter Kiinteistöyhtiö Oy and then rename Satmatic Oy to Harju Elekter Oy.

Harju Elekter Group is 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 800 specialists, and 9 months 2019 sales revenue of the Group was 112.2 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 IR manager
+372 671 2761

Publication of financial reports in 2020

AS Harju Elekter wishes to the shareholders Happy Holiday Season and informs you that in the year 2020, the consolidated financial results of AS Harju Elekter will be published as following:

2019 4Q results                      21.02. 2020
2020 1Q results                      29.04. 2020
AGM                                         30.04. 2020
2020 2Q results                      29.07. 2020
2020 3Q results                      28.10. 2020

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.com

 

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

 

 

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

Regarding changes in the management of Harju Elekter

The Supervisory Board of AS Harju Elekter hereby announces that Chairman of the Management Board Andres Allikmäe will be taking on the position of Head of Business Development at AS Harju Elekter, following the expiration of his Management Board Member Contract on 3 May 2020.

Andres Allikmäe joined the company in 1982 and was named Chairman of the Management Board in 1999. In recent years the Group has expanded aggressively in Finland, Sweden and Lithuania, and the integration of companies and better use of the opportunities offered by synergistic cooperation within the Group requires the creation of the position of Head of Business Development at the Harju Elekter Group, where long-term managerial experience will be of great benefit.

The Management Board of AS Harju Elekter has three members and any subsequent changes in the composition of the Management Board will be announced when they occur.

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 799 specialists, and 9 months 2019 sales revenue of the Group was 112.2 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

Endel Palla
Chairman of the Supervisory Board
+372 674 7400

 

 

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

Harju Elekter won Elektrilevi tender

AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, won a tender for the supply of 630 kVa and 1000 kVa prefabricated substations and these components. Elektrilevi OÜ, the largest grid company in Estonia, made an announcement on the winner of the tender, based on which totally 27.8 million euros amounted in the 62-months contract period. According to plans, the terms and conditions of the contract will be specified, and the framework contract will be concluded during this year.

Throughout the years, the Group has contributed to the activities in Estonian market by participating in procurements, selling electrical products for retail and project sales, and offering different industrial rental premises for corporate customers. Sales to the Estonian market grew to 13.2 (9m 2018: 10.7) million euros in the 9 months and accounting for 12% of the consolidated revenue.

This year, 3,000 substations were produced in the Harju Elekter Group’s factories, incl. 2,000 substations in AS Harju Elekter Elektrotehnika. The subsidiary’s production capacities were expanded significantly in 2017, directing the operations of the subsidiary to the new production halls at Keila Industrial Park.

Elektrilevi is the largest network operator in Estonia, managing approximately 60,000 kilometers of power lines and 24,000 substations and building a fast Internet network covering the whole Estonia. In addition, Elektrilevi operates a street lighting network in Tallinn and Tartu and is developing a modern electric car charging network.

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 799 specialists, and 9 months 2019 sales revenue of the Group was 112.2 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 IR manager
+372 671 2761

Large order received by Harju Elekter’s subsidiary

Telesilta Oy, a subsidiary of AS Harju Elekter, and Uudenkaupungin Työvene Oy have signed a contract for electrical turnkey delivery for workboat series to Finnish Coast Guard. The contract price is around 4 million euros and work will be carried out on years 2020 to 2023.

Uusikaupungin Työvene Oy has signed an agreement with the Finnish Coast Guard, in the framework of which, as the main contractor, will manufacture and supply seven coastguard vessels suitable for all year-round sea duties during the years 2020 to 2023. Telesilta Oy is responsible for the electrical work part.

Uudenkaupungin Työvene (Uki Workboat), established in 1987, has extensive experience in designing and building boats and vessels for professional use. The company delivers tailor-made turnkey projects on time and to cost.

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 799 specialists, and 9 months 2019 sales revenue of the Group was 112.2 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, 1-9/2019

Commentary from the Management

The Group’s indicators for the reporting period are as expected and the Group’s goal to continue increasing the market share in the Nordic countries has shown a positive result. The Lithuanian and Swedish subsidiaries increased their sales turnovers and Finnish subsidiaries that focus on production managed to compensate for some decline in the sale of energy network products with a growth in industrial sector and renewable energy projects. The factory expansion that supports the growth of the Lithuanian subsidiary has multiplied their sales volume. The third quarter and nine months consolidated sales revenue of AS Harju Elekter have reached a record level when compared to the previous periods and are 42.3 million euros and 112.1 million euros, respectively.

In recent years, investments have been made into the development of existing companies and into acquiring new companies but increasing the profitability of the investments still takes time. The profitability was influenced by adapting the administrative capacity of the subsidiaries to the Group’s needs and was also affected by the client’s decisions to spread their investment over a longer period than before. The Groups’ operating profit in the third quarter was 1.6 (Q3 2018:0) million euros and for the nine months 3.1 (9m 2018: 1.4) million euros.

This year, the management of subsidiaries has been strengthened. In the nearest quarters, the subsidiaries shall participate in several procurements and projects, the success of which allows us to reinforce our market positions and move on to providing new innovative products and services in the future.

January – September July – September Year
(thousand euros) Change% 2019 2018 Change% 2019 2018 2018
Sales revenue 26% 112,150 89,134 44% 42,262 29,298 120,804
Gross profit 28% 14,249 11,108 81% 5,375 2,963 15,976
EBITDA 72% 5,679 3,300 275% 2,446 654 5,001
EBIT 118% 3,064 1,406 19,498% 1,561 9 2,413
Profit for the period 100% 2,313 1,158 12,699% 1,319 18 1,514
incl attributed to Owners of the Company 100% 2,384 1,190 12,699%  1,359 11 1,546

Revenue and profit

The Group manufactures and sells electrical, control and power automation devices and various metal products. In addition, sales revenue is also earnt from the rental of industrial property and electricity works in the shipbuilding sector. The consolidated unaudited revenue for the third quarter of 2019 was 42.3 (Q3 2018: 29.3) million euros, an increase of 44.2% over the comparable period. Consolidated revenue for the nine months increased by 25.8%, reaching 112.2 (9m 2018: 89.1) million euros. This is mainly due to the increase in the sale of electrical equipment, which increased by 11.7 million euros in the reporting quarter and by 25.4 million euros in 9 months compared to the reference periods. Primarily, the volumes of electrical equipment sold to the shipping and industrial sectors, i.e.  produced in Lithuania, have increased.

The consolidated gross profit for the reporting quarter was 5,375 (Q3 2018: 2,963) thousand euros, the gross margin was 12.7% (Q3 2018: 10.1%). Consolidated operating profit (EBIT) for the third quarter was 1,561 (Q3 2018: 9) thousand euros and the consolidated net profit was 1,319 (Q3 2018: 18) thousand euros. Earnings per share (EPS) was 0.08 (Q3 2018: 0.00) in the reporting quarter. The consolidated gross profit for the nine months was 14,249 (9m 2018: 11,108) thousand euros and the gross margin was 12.7% (9m 2018: 12.5%). Consolidated operating profit (EBIT) was earned in 9 months 3,064 (9m 2018: 1,406) thousand euros. The consolidated net profit of the nine months was 2,313 (9m 2018: 1,158) thousand euros, and earnings per share (EPS) was 0.13 (9m 2018: 0.07).

Markets

The Group’s Estonian companies continue to contribute to the home market activities by participating in procurements, selling electrical products for retail and project sales, and offering different industrial rental premises for corporate customers. Sales to the Estonian market grew to 4.7 (Q3 2018: 4.3) million euros in Q3 and to 13.2 (9m 2018: 10.7) million euros in the 9 months and accounting for 11.0% and 11.8% (Q3 2018: 14.7% and 9m 2018: 12.0%) of the consolidated revenue, respectively.

Revenue in Finnish market increased by 1.1 million euros up to 18.6 million euros in the reporting quarter but decreased by 2.3 million euros to 57.0 million euros in 9 months and was mainly affected by the adjustment of the renovation plan of Finnish power and network construction projects to a smaller volume than originally planned. However, the sales in the other electrical equipment increased. In the reporting quarter, Finnish market accounted for 44.1% (Q3 2018: 60.0%) and in the 9 months, 50.8% (9m 2018: 66.5%) of the Group’s consolidated revenue. Although its share is 15.7 percentage points less than in the previous period, it continues to be the largest market in the Group. The decrease in the Finnish market share of the Group’s sales revenue was affected by the growth of revenue in both Sweden and Norway.

The share of the Swedish market in the consolidated sales revenue continues rose, reaching 12.7% (Q3 2018: 11.7%) in the reporting quarter and 13.1% (9m 2018: 9.4%) in the 9 months. In the reporting quarter, sales in Sweden were 5.4 million euros and in the 9 months 14.7 million euros, increasing by 2.0 million euros and 6.4 million euros, respectively. The growth was ensured by an increase in the sales of substations in Sweden and adding the bigger projects to the Swedish subsidiary, acquired in 2018.

As a result of the successful sales and marketing of the Lithuanian subsidiary, sales to the Norwegian market have increased the most, reaching the second position among the Group’s markets. Sales to the Norwegian market accounted for 19.7% (Q3 2018: 7.9%) of the consolidated revenue in the reporting quarter and for 15.9% (9m 2018: 6.3%) in the 9 months. In quarterly comparisons, sales to the Norwegian market increased by 6.0 million euros to 8.3 million euros and in the first nine months by 12.1 million euros to 17.8 million euros.

From the second half of 2018, the Group started deliveries and supplies to the Netherlands, where we have managed to retain a stable revenue growth. In quarterly comparison, sales to the Netherland market increased by 2.9 million euros and in the first nine months by 7.0 million euros. The Netherlands made up 9.7% (Q3 2018: 4.0%) of the consolidated revenue in the reporting quarter and 6.7% (9m 2018: 0.6%) in the 9 months and was 4.1 and 7.6 million euros, respectively.

Business segments

The sales revenue in the Production segment increased by 11.7 million euros, to 36.6 million euros in the reporting quarter and by 25.0 to 98.2 million euros in the nine months. The revenue increase of the Production segment is caused by an increase in the sales of electrical equipment, which contributes to the main part (99%) of the total revenue of the Production segment. The Lithuanian company has mostly contributed to the increase in the revenue of the Production segment, the production capacity of which has increased significantly thanks to the opening of a new production building while the revenues have tripled. The growth pace of the sales revenue from the Real estate segment is similar to the growth of revenue in previous quarters. With year-on-year comparison, the revenue has increased from 0.2 million euros to 0.8 million euros. During the nine months, Real Estate segment sales totalled 2.5 million euros, accounting for 1.8% (9m 2018: 2.0%) of the Group’s nine-month revenue. Rental income is earnt on new rental premises in the Allika industrial park and from the tenants in the territory of Keila and Haapsalu industrial parks.  The revenue of Other activities has increased by 1.1 million euros, to 4.9 million euros year-on-year and has declined by 2.7 million euros to 11.5 million euros for the nine-month comparison. Comparing with the comparable period, the reduction is caused by large-volume electrical works projects in the shipbuilding sector in the first half of 2018.

Operating expenses

Operating expenses of the reporting quarter were 40.7 (Q3 2018: 29.3) million euros and of the 9 months were 109.0 (9m 2018: 87.8) million euros in total. The principal part of the cost increase is attributable to the higher expenses on cost of sales: 10.5 million euros in the quarterly and 19.9 million euros in the yearly comparison, out-pacing the growth rate of sales revenue and increasing the gross profit margin in relation to the comparable period by 2.6 and 0.2 percentage points. Focusing on increasing export has also increased the marketing costs. The Group’s companies have participated in several professional fairs and they actively search for possibilities to increase business volumes. Distribution costs have increased by 0.5 million compared to the comparable quarter and 0.6 million euros in the 9 months. The rate of distribution cost to revenue has remained at the same level (3.6%) quarter on quarter comparison but decreased to 3.7% (9m 2018: 4.1%) in the 9 months comparison.

The addition of new employees to expand operations in the Lithuanian subsidiary, the wage pressure resulting from the demand for local skilled labour, as well as the increased number of employees in Finland and Sweden where salary levels are significantly higher than in the other Group companies, have increased labour costs in the reporting period. Labour costs increased by 6.4%, to 6.2 million euros year-on-year and by 7.9% to 19.4 million euros in the 9 months. Labor costs rate decreased in both, quarterly and 9 months comparisons, accounting for 14.6% (Q3 2018: 19.9%) and 17.3% (Q9 2018: 20.2%), respectively.

The innovative production line and buildings that were taken into use increased the depreciation of non-current assets by 0.2 million euros, to 0.9 million euros year-on-year and by 0.7 million euros to 2.6 million euros in the 9-month comparison.

Employees and remuneration

As of the end of the reporting period, the Group had 799 employees, being 71 employees more than a year ago. Largest change of the employees (109 people) was due to the significantly increased production volumes in the Lithuanian subsidiary. During the nine months, the Group employed an average of 779 people, which was an average of 70 employees more than in the comparable period. In the reporting quarter, 5.0 (Q3 2018: 4.8) and during the 9 months 15.6 (9m 2018: 14.0) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,230 euros, an increase of 1.2% to the comparable period. The cost of wages was affected by the hiring of new workers in Sweden, but also by the decision of the Republic of Lithuania to calculate part of the social tax as the gross salary of the employee. The last amendment did not have a significant impact on the labour costs of the Group.

Investments

In the reporting period, the Group invested a total of 4.4 million euros in non-current assets, incl. 0.7 million euros in investment properties, 3.4 million euros in property, plant and equipment and 0.3 million euros in intangible assets. The vast majority of the investments was aimed at the expansion of the production facilities of the Lithuanian subsidiary. The rest of the investments were placed into integration of the new sale office and the central warehouse of the Estonian subsidiary, and into the development projects of the Group’s companies and industrial parks. In the comparable period, a total of 7.5 million euros were invested into non-current assets, of which 1.0 million euros was acquired through business combinations. The remaining amount was used for the subsidiary’s Finn-Power production line, construction of the Allika industrial park and Haapsalu solar power plant.

Main events in the third quarter

  • In September, Lithuanian subsidiary opened festively a new production hall in Panevežys. During nearly a year expansion works, the subsidiary’s office and production spaces increased from 2,500 sq.m. to 9,000 sq.m. In addition, 1.9 hectares of land adjacent to the already existing properties were purchased in Lithuania this year to ensure the possibility of future expansion. The total volume of investments was 3.5 million euros. Investments in the expansion of the production facility and upgrade of technology add notable production capacity to secure supplies for the customers of the subsidiary in the segments of ship-building and industry.
  • In Q3, Telesilta Oy completed several big projects. In August, the working vessel Hydrograf-17 was completed, built for the Poland Gdynia Maritime Administration at the UTV Uusikaupunki shipyard, where Telesilta Oy was the main contractor for the electric works. In September, the UTV shipyard delivered to their client the first hybrid ferry Elvy, manufactured in Finland, the electrical and navigation system turnkey solution of which was completed at Telesilta Oy. The ferry will start operating on the River Göta in Sweden.
  • On 30.08.2019,  a purchase-sale agreement was signed in which Satmatic Oy, a subsidiary of Harju Elekter AS, bought the real estate company Kinnteistö Oy Ulvila Sammontie 9, owned by the Municipality of Ulvila. Transaction price was 2.0 million euros. In the course of the transaction, Satmatic Oy acquired an immovable of 0.86 ha with production surfaces on the property of 4,330 sq.m. The transaction was the conclusion of the contract signed on 17.11.2008 by Satmatic Oy, a subsidiary of Harju Elekter AS, and the Municipality of Ulvila, according to which Satmatic Oy was entitled to acquire Sammontie 9, Ulvila’s property with a production building built there after a 10-year lease. The activity follows the principle according to which the production areas used by the Group companies belong to the Group’s ownership
  • The daily business activities and production organisation of the group’s company are based on an international standard of the relevant quality and environment policy. The valid ISO 9001 quality standard has been implemented in most of the group’s production companies. Telesilta Oy started the preparation for the implementation of ISO 9001 in 2018. In September this year, Bureau Veritas acknowledged the company’s business and production management compliant with the international quality standard ISO 9001 and issued a relevant certificate.
  • Finland’s economic newspaper Kauppalehti awarded Finnkumu Oy the Menestyjät 2019 title based on their economic results from June 2018 to May 2019. Such acknowledgement is given to companies with a well-established economic activity, stable growth, good results and profitability, strong financial structure, and liquidity to ensure sustainable activity.
  • Through co-operation of the Group’s subsidiaries – electrical goods project and retail seller Energo Veritas OÜ and metal factory AS Harju Elekter Teletehnika – four external fibre optic cabinet models were developed for Elektrilevi’s fast internet network project (Last Mile). Cabinet deliveries started in September. In the next 5 years, Elektrilevi plans to invest about 100 million euros into the project, of which the materials form about a fifth.
  • The Supervisory Board and Management Board of AS Harju Elekter have decided to bring all companies of the Group under the single Harju Elekter trademark. Using a common logo helps to strengthen the Group’s competitiveness and creates additional benefits and opportunities for marketing, providing a clear image of the capabilities of Harju Elekter Group. Based on the above, the Lithuanian subsidiary RIFAS UAB was renamed HARJU ELEKTER UAB. The entry was made into the Lithuanian Register of Legal Entities on 2 July 2019.
  • In connection with the restructuring of the activities of Harju Elekter Group in Finland and consolidation of Satmatic Oy and Finnkumu Oy under one common management, the Group appointed Jan Osa, the former manager of AS Harju Elekter Elektrotehnika, as the new CEO of Satmatic Oy and Finnkumu Oy, who started in this position at Satmatic Oy from 1 April 2019 and at Finnkumu Oy from 1 July 2019. The former head of the sales department Indrek Ulmas was appointed as the managing director of AS Harju Elekter Elektrotehnika starting from 1 April 2019. There was also a change in the management of Telesilta Oy, where the current member of the board and project manager Joonas Puustelli was appointed as the CEO as of 1 October 2019.  The long-time Managing Director of Telesilta Oy, Kari Laulajainen, will continue at least to the end of the year 2020, supporting company operations in project management and sales. As of 1.1.2020, a new CEO has also been appointed for Swedish subsidiaries SEBAB AB and Grytek AB. Mikael Schwartz Jonsson will start working with the Harju Elekter Group on 1 October 2019, and will work in close cooperation with the current CEO during the three-month transition period. The long-term CEO of SEBAB AB and Grytek AB, Thomas Andersson, will take the position of Sales and Marketing Director in Sweden from 1st of January 2020.
  • In Q3, subsidiaries of the Group participated the Alihankinta fair in Tampere, where the cost-efficient contractual production model, vehicle charging solutions, and the sales of strongly growing components were introduced by Satmatic Oy as well as the high-quality data network products by AS Harju Elekter Teletehnika.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.10 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-9/2019

CONSOLIDATED BALANCE SHEET,30.09.2019
Unaudited
EUR’000
ASSETS         30.09.19         31.12.18
Cash and cash equivalents 3,883 3,142
Trade receivables and other receivables 29,974 22,218
Prepayments 1,942 1,173
Inventories 19,059 17,468
TOTAL CURRENT ASSETS 54,858 44,001
Deferred income tax asset 96 98
Other long-term financial investments 9,828 9,587
Investment property 19,912 19,804
Property, plant and equipment 21,148 17,403
Intangible assets 7,181 7,260
TOTAL NON-CURRENT ASSETS 58,165 54,152
TOTAL ASSETS 113,023 98,153
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 10,824 6,656
Advances from customers 3,254 1,740
Trade payables and other payables 20,075 14,911
Tax liabilities 2,975 2,409
Short-term provision 25 14
TOTAL CURRENT LIABILITIES 37,153 25,730
Interest-bearing loans and borrowings 9,016 5,449
Other long-term liabilities 64 35
NON-CURRENT LIABILITIES 9,080 5,484
TOTAL LIABILITIES 46,233 31,214
Share capital 11,176 11,176
Share premium 804 804
Reserves 3,396 2,665
Retained earnings 51,507 52,316
TOTAL OWNERS’ EQUITY 66,883 66,961
Non-controlling interests -93 -22
TOTAL EQUITY 66,790 66,939
TOTAL LIABILITIES AND OWNERS’ EQUITY 113,023 98,153
CONSOLIDATED INCOME STATEMENT,  1-9/2019
Unaudited
EUR’000 Q3 2019 Q3 2018    9m 2019     9m 2018
Revenue 42,262 29,298 112,150 89,134
Cost of sales -36,887 -26,335 -97,901 -78,026
Gross profit 5,375 2,963 14,249 11,108
Distribution costs -1,516 -1,052 -4,198 -3,644
Administrative expenses -2,296 -1,882 -6,929 -5,998
Other income 39 17 171 60
Other expenses -41 -37 -229 -120
Operating profit 1,561 9 3,064 1,406
Finance income 25 171 147 523
Finance costs -77 -15 -179 -38
Profit before tax 1,509 165 3,032 1,891
Income tax expense -190 -147 -719 -734
Profit for the period, attributable to 1 18 2,313 1,157
owners of the Company 1,359 11 2,384 1,190
non-controlling interests -40 7 -71 -33
Basic earnings per share  (EUR) 0.08 0.00 0.13 0.07
Diluted earnings per share  (EUR) 0.08 0.00 0.13 0.07

Interim report 1-9/2019

Tiit Atso
CFO
+372 674 7400

Extension of the powers of Members of the Management Board of Harju Elekter

At its meeting on 29 October 2019, the Supervisory Board of AS Harju Elekter decided to extend the powers of Members of the Management Board of the company, Mr. Tiit Atso (CFO) and Mr. Aron Kuhi-Thalfeldt (Real-Estate and Energetics Department Manager), starting from 1 November 2019 for the next three years.

The Management Board of AS Harju Elekter will continue with three members: Mr. Andres Allikmäe (Chairman), Mr. Tiit Atso and Mr. Aron Kuhi-Thalfeldt.

 

Endel Palla
Chairman of the Supervisory Board
+372 6747 400

 

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

Harju Elekter Lithuanian subsidiary opened new production facilities

Today, on 19 September, AS Harju Elekter’s Lithuanian subsidiary HARJU ELEKTER UAB opened festively a new production hall in Panevežys. During nearly a year of expansion works, the subsidiary’s office and production spaces increased from 3,500 sq.m to 9,000 sq.m. In addition, 1.9 hectares of land adjacent to the already existing properties were purchased in Lithuania in Q2 to ensure the possibility of future expansion. The total volume of investments is 3.5 million euros.

Investments in the expansion of the production facility and upgrade of technology enable on to add notable production capacity to secure supplies for the customers of the subsidiary in the segments of ship-building and industry.

Sales revenue of HARJU ELEKTER UAB increased y-o-y by 85% in 2018 to 14.7 million euros. In addition, the introduction of new premises let to increase the number of employees in the subsidiary, which as of 30.06.2019 was 213, i.e. 75 more than at the beginning of the year.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sales of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter Group, with the Group’s sales revenue amounting to EUR 120.8 million in 2018. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

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

 

 

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

Changes to the governing bodies of Swedish subsidiaries of Harju Elekter

Regarding the restructuring plan for activities of Harju Elekter in Sweden, we hereby give notice of changes to the management of wholly owned subsidiaries of Harju Elekter in Sweden: SEBAB AB and Grytek AB. Mikael Schwartz Jonsson will be appointed to the position of CEO of Harju Elekter’s enterprises in Sweden, as of 1 January 2020; he will start working with the Harju Elekter Group on 1 October 2019, and will work in close cooperation with the current CEO during the three-month transition and acclimation period.

The long-term CEO of SEBAB AB and Grytek AB, Thomas Andersson, will take the position of Sales and Marketing Director from 1st of January 2020.

Mikael Schwartz Jonsson (born 1978) has graduated Mälardalens Högskola with a bachelor’s degree in engineering (2002). Since 2016, he worked for Eldon AB as its sales manager, being responsible for the company’s sales in Sweden, Norway and Finland. Earlier he worked for Rittal Scandinavian AB and Eldon AB. Mikael Schwartz Jonsson does not own shares of Harju Elekter.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sales of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter Group, with the Group’s sales revenue amounting to EUR 120.8 million in 2018. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

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

Additional information: Andres Allikmäe, Chairman of the Management Board of AS Harju Elekter, phone: +372 674 7400, and Thomas Andersson, CEO of SEBAB AB, phone: +46 704 130502

 

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

Changes to the governing body of Harju Elekter’s Finnish subsidiary

As of 1 October 2019, Joonas Puustelli, the current member of executive board and project manager, will be appointed the Managing Director of Harju Elekter’s Finnish subsidiary Telesilta Oy. The long-time Managing Director of Telesilta Oy, Kari Laulajainen, will continue at least to the end of the year 2020, supporting company operations in project management and sales.

Joonas Puustelli (born 5.06.1985) is a graduate of Aalto University, in mechanics and mechatronics (2012); and is started Master of Engineering studies in Turku University of Applied Science (2018). He has been employed at Telesilta Oys since 2017, before that as project engineer/quality controller in Beacon Finland Ltd (2011-2017). Joonas Puustelli does not own Harju Elekter shares.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sales of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter Group, with the Group’s sales revenue amounting to EUR 120.8 million in 2018. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

 

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

 

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

The subsidiary of Harju Elekter bought a real estate company in Finland

On 30.08.2019, a purchase-sale agreement was signed in which Satmatic Oy, a subsidiary of Harju Elekter AS, bought the real estate company Kinnteistö Oy Ulvila Sammontie 9, owned by the Municipality of Ulvila. Transaction price was 2.0 million euros. In the course of the transaction, Satmatic Oy acquired an immovable of 0.86 ha with production surfaces on the property of 4,330 sq.m. The activity follows the principle according to which the production areas used by the Group companies belong to the Group’s ownership.

The transaction was the conclusion of the contract signed on 17.11.2008 by Satmatic Oy, a subsidiary of Harju Elekter AS, and the Municipality of Ulvila, according to which Satmatic Oy was entitled to acquire Sammontie 9, Ulvila’s property with a production building built there after a 10-year lease. Lease period started at 01.09.2009.

Harju Elekter Group is the leading manufacturer of medium and low-voltage electricity and automation equipment in the Baltics, and a well-known and recognised manufacturer in Scandinavia. The main business activity of Harju Elekter is the development, production and sales of equipment required for the distribution and transmission of electricity. The main business activity is supported by the sheet metal factory in Estonia, as well as the development and leasing of industrial real estate. A total of 800 specialists are employed in the Estonian, Finnish, Swedish and Lithuanian factories of Harju Elekter Group, with the Group’s sales revenue amounting to 120.8 million euros in 2018. Shares of Harju Elekter are listed on the Nasdaq Tallinn Stock Exchange.

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, 1-6/2019

Commentary from Management

The first half of the year has been successful for the Group’s Lithuanian, Finnish and Swedish companies that have experienced strong sales growth. At the same time, the year has been much more modest for the Estonian companies, mainly due to the slowing down of the Finnish electricity network renovation plan which has kept orders from the Finnish distribution network substations lower than originally planned. The consolidated sales revenue of AS Harju Elekter in Q2 was 40.6 million euros and its 6 month sales revenue amounted to 69.9 million euros. The operating profit in Q2 was 1.2 million euros and in the first half of the year, 1.5 million euros. Profitability was significantly affected by two legal disputes that were reflected in the reporting quarter, totalling 0.4 million euros; actual gains/losses will become apparent at the end of the process.

Change

January – June

Change

April – June

Year

(thousand euros)

H1/H1

2019

2018

Q2/Q2

2019

2018

2018

Sales revenue

16.8%

69,889

59,837

20.0%

40,606

33,851

120,804

Gross profit

8.9%

8,875

8,146

5.9%

5,087

4,802

15,976

EBITDA

22.1%

3,232

2,647

14.9%

2,065

1,797

5,001

EBIT

7.4%

1,502

1,398

2.5%

1,195

1,166

2,413

Profit for the period

-12.8%

994

1,140

-20.1%

829

1,038

1,514

incl attributed to Owners of the Company

-13.1%

1,025

1,180

-19.5%

843

1,047

1,546

Revenue and profit

The Group manufactures and sells electrical, control and power automation devices and various metal products. In addition, sales revenue is also earnt from the rental of industrial property and electricity works in the shipbuilding sector. The consolidated unaudited revenue for the second quarter of 2019 was 40.6 (Q2 2018: 33.9) million euros, an increase of 20.0% over the comparable period. This is mainly due to the increase in the sale of electrical equipment, which increased by 7.9 million euros in the reporting quarter and by 13.7 million euros in 6 months and accounted the sale of electrical equipment for 88.0 % of the Group’s sales revenue. Consolidated revenue for the first half-year increased by 16.8%, reaching 69.9 (6m 2018: 59.8) million euros.

The consolidated gross profit for the reporting quarter was 5,087 (Q2 2018: 4,802) thousand euros, the gross margin was 12.5% (Q2 2018: 14.2%). Consolidated operating profit (EBIT) for the second quarter was 1,195 (Q2 2018: 1,166) thousand euros and the consolidated net profit was 829 (Q2 2018: 1,038) thousand euros. Earnings per share (EPS) was 0.05 (Q2 2018: 0.06) in the reporting quarter. The consolidated gross profit for the first half-year was 8,875 (6m 2018: 8,146) thousand euros and the gross margin was 12.7% (6m 2018: 13.6%). Consolidated operating profit (EBIT) was earned in 6 months 1,502 (6m 2018: 1,398) thousand euros. The consolidated net profit of the first half-year 2019 was 994 (6m 2018: 1,140) thousand euros. And earnings per share (EPS) was 0.06 (6m 2018: 0.07).

Markets

Sales to the Estonian market grew up to 5.0 (Q2 2018: 3.5) million euros in Q2 and to 8.6 (6m 2018: 6.4) million euros in 6 months and accounting for 12.3% (Q2 and 6m 2018: 10.5%) of the consolidated sales revenue of both reporting period. The Group’s Estonian companies make a significant contribution to increasing our market share in the Estonian market, both in potential procurements and in offering rental premises to corporate customers.

Sales on the Group’s largest market, Finland, have decreased insignificantly compared to the reference period. Revenue in the reporting quarter decreased by 1.5 million euros to 22.2 million euros and by 3.3 million euros to 38.3 million euros in 6 months and was mainly affected by the adjustment of the renovation plan of Finnish power and network construction projects  to a smaller volume than originally planned. In the reporting quarter, Finland accounted for 54.7% (Q2 2018: 70.0%) and in the first half of the year, 54.8% (6m 2018:  69.6 %) of the Group’s products and services. The decrease in the Finnish market share of the Group’s sales revenue was affected by the growth of sales revenue in both Sweden and Norway.

In the reporting quarter, sales in Sweden were 5.6 million euros and in the first half of the year 9.4 million euros, increasing by 2.7 million euros and 4.4 million euros, respectively. The share of the Swedish market in the consolidated sales revenue continues rose, reaching 13.9% (Q2 2018: 8.8%) in the reporting quarter and 13.4% (6m 2018: 8.3%) in the 6 months. The growth was due to the added sales revenue of the Swedish subsidiaries as well as the goal-orientated work of other subsidiaries towards Sweden. We expect Swedish sales volumes to increase further in the coming quarters, as indicated by the continued growth of orders from Sweden’s largest distribution network company E.ON Energidistribution AB, as well as several new major projects with orders starting from the second quarter.

Sales to the Norwegian market increased the most, having quadrupled to 5.5 (Q2 2018: 1.2) million euros compared to the same period last year and accounting for 13.5% (Q2 2018: 3.7%) of the consolidated revenue in the reporting quarter. Within 6 months, 9.5 million euros has been sold to the Norwegian market.

The Group continued deliveries and supplies to the Netherlands, where we have managed to retain a stable sales revenue for the fourth quarter in a row. The Netherlands made up 4.6% (2018 Q2: 1.2%) of the consolidated sales revenue in the reporting quarter and 4.9% (2018 6m: 0.9%) in the first half of the year and sales revenue earned there were 1.9 million euros and 3.5 million euros respectively.

Business segments

The sales revenue in the Production segment increased by 8.4 million euros, to 35.9 million euros in the reporting quarter and by 13.3 to 61.5 million euros in the first half of the year. Main share of the sales revenue (99%) in the Production segment comes from the sale of electrical equipment. Sales growth in the Real Estate segment is similar to the first quarter, with quarterly sales increasing from 0.2 million euros to 0.8 million euros. In the first half of the year, Real Estate segment sales totalled 1.7 million euros, accounting for 2.4% of the Group’s six-month sales revenue. Rental income is earnt on new rental premises in the Allika industrial park and from the tenants in the territory of Keila and Haapsalu industrial parks. The sales revenue of Unallocated activities has declined by 1.8 million euros, to 3.8 million year-on year and by 3.8 million euros to 6.7 million euros for the first half of the year. The decline is mainly related to decreased volumes of electrical works in the ship-building sector.

Operating expenses

Operating expenses of the reporting quarter were 39.4 (Q2 2018: 32.8) million euros and of the 6-months period were 68,3 (6m 2018: 58.4) million euros in total. The principal part of the cost increase is attributable to the higher ex-penses on cost of sales: 6.5 million euros in the quarterly and 9.3 million euros in the yearly comparison, out-pacing the growth rate of sales revenues and reducing the gross profit margin in relation to the comparable period by 1.7 and 0.9 percentage points. The Group’s distribution costs comprised 1.5 million euros in the reporting quarter, increasing only marginally (3%). At the same time, both the share of distribution cost and administrative cost decreased by 0.6 percentage points to 3.6 % and by 0.5 percentage points to 6.0% year-on-year and by 0.5 percentage points to 3.8 % and 0.3 percentage points to 6.6% half-year comparison, respectively.

The addition of new employees to expand operations in the Lithuanian subsidiary, the wage pressure resulting from the demand for local skilled labour, as well as the increased number of employees in Finland and Sweden where salary levels are significantly higher than in the other Group companies, have increased labour costs in the reporting period. Labour costs increased by 5.0%, to 6.9 million euros year-on-year and by 8.6% to 13.2 million euros in the 6 months. The labour cost rate accounted for 16.9% (Q2 2018: 19.3%) of the sales revenue in the reporting quarter and 19.0% (Q2 2018: 20.4%) of the first 6-months period sales revenue.

The innovative production line and buildings that were taken into use increased the depreciation of non-current assets by 0.2 million euros, to 0.9 million euros year-on-year and by 0.5 million euros to 1.7 million euros in the 6 months.

Employees and remuneration

As at the end of the reporting period, the Group had 848 employees, being 96 employees more than a year ago. Most of the employees (75 people) were hired to handle the significantly increased production volumes in the Lithuanian subsidiary. In the second quarter, the Group employed an average of 779 people, which was an average of 66 employees more than in the comparable period. In the reporting quarter, 5.5 (Q2 2018: 4.9) and during the 6 months 10.6 (6m 2018: 9.3) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,335 euros, an increase of 5.1% to the comparable period. The cost of wages was affected by the hiring of new workers in Sweden, but also by the decision of the Republic of Lithuania to calculate part of the social tax as the gross salary of the employee. The last amendment did not have a significant impact on the labour costs of the Group.

Investments

In the reporting period, the Group invested a total of 3.0 million euros in non-current assets, incl. 0.2 million euros in investment properties, 2.6 million euros in property, plant and equipment and 0.2 million euros in intangible assets. The vast majority of the investments, i.e. 1.8 million euros, was aimed at the expansion of the production facilities of the Lithuanian subsidiary. The rest of the investments were placed into integration of the new flagship store of the Estonian subsidiary and the central warehouse, and into the development projects of the Group’s companies and industrial parks. In the comparable period, a total of 4.6 million euros were invested in non-current assets, of which 1.0 million was acquired through business combinations.

Main events in the second quarter

  • The Supervisory Board and Management Board of AS Harju Elekter have decided to bring all companies of the Group under the single Harju Elekter trademark. Using a common logo helps to strengthen the Group’s competitiveness and creates additional benefits and opportunities for marketing, providing a clear image of the capabilities of Harju Elekter Group. Based on the above, the Lithuanian subsidiary RIFAS UAB was renamed HARJU ELEKTER UAB. The entry was made into the Lithuanian Register of Legal Entities on 2 July 2019.
  • In May, subsidiaries of the Group participated the largest Nordic electricity fair Elfack in Gothenburg and showcased the HECON line system of the MCC, developed for 2500A-4000A solutions, and the HEKA 1VM SS2 prefabricated substation dedicated to the needs of the Swedish market. In the trade fair for electricity and distribution networks, the Verkosto in Tampere, introduced products directed to the energy distribution sector; and in April, the construction fair Eesti Ehitab in Tallinn displayed the product range of the Group’s stores.
  • The expansion works of the production facility of the Lithuanian subsidiary in Panevežys are nearing the end. For today, the new production hall is complete and production in part 1 is already in going. The expanded factory will be open in September, whereupon the subsidiary will have 9,000 sq.m of office and production space, instead of the former 3,500 sq.m. The total volume of investments is 3.5 million euros. Investments in the expansion of the production facility and upgrade of technology enable on to add notable production capacity to secure supplies for the customers of the subsidiary in the segments of ship-building and industry. In addition, 1.9 hectares of land adjacent to the already existing properties were purchased in Lithuanian to ensure the possibility of future expansion.
  • On 2 May 2019, the AGM of shareholders of AS Harju Elekter was held; it approved the 2018 annual report and distribution of profit and decided to pay shareholders a dividend of 0.18 euro per share for 2018, totaling 3.2 million euros. The shareholders registered in the shareholders’ registry on 16 May 2019 as of the end of the business day in the accounting system, entitled to dividend. The dividends paid to the shareholders on 24 May 2019 by a transfer to the bank account of the shareholder.
  • On 1 April, the subsidiary Energo Veritas OÜ opened a new sales office and central warehouse at 19 Tuisu Street, Tallinn. The assortment of products in the area of electricity and low voltage materials, construction of telecom and power grid expand notably, and the sales capability of products in Estonia increase.The atractive location and larger premises create better possibilities for customer service and quicker issuing of goods.
  • Energo Veritas OÜ, a project and retailer of electrical installation goods, won the procurement of transformers for the distribution network Elektrilevi worth 1.3 million euros.
  • In connection with the restructuring of the activities of Harju Elekter Group in Finland and consolidation of Satmatic Oy and Finnkumu Oy under one common management, the Group appointed Jan Osa, the former manager of AS Harju Elekter Elektrotehnika, as the new CEO of Satmatic Oy and Finnkumu Oy, who started in this position at Satmatic Oy from 1 April 2019 and at Finnkumu Oy from 1 July 2019. The former head of the sales department Indrek Ulmas was appointed as the managing director of AS Harju Elekter Elektrotehnika starting from 1 April 2019.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.12 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-6/2019

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,30.06.2019
Unaudited
EUR’000
ASSETS 30.06.19 31.12.18
Cash and cash equivalents 1,978 3,142
Trade receivables and other receivables 29,894 22,218
Prepayments 1,728 1,173
Inventories 23,113 17,468
TOTAL CURRENT ASSETS 56,713 44,001
Deferred income tax asset 97 98
Other long-term financial investments 10,245 9,587
Investment property 19,61 19,804
Property, plant and equipment 20,916 17,403
Intangible assets 7,214 7,260
TOTAL NON-CURRENT ASSETS 58,082 54,152
TOTAL ASSETS 114,795 98,153
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 12,299 6,470
Advances from customers 2,536 1,740
Trade payables and other payables 22,738 14,911
Tax liabilities 3,259 2,409
Short-term provision 32 14
TOTAL CURRENT LIABILITIES 40,864 25,544
Interest-bearing loans and borrowings 8,577 5,635
Other long-term liabilities 66 35
NON-CURRENT LIABILITIES 8,643 5,670
TOTAL LIABILITIES 49,507 31,214
Share capital 11,176 11,176
Share premium 804 804
Reserves 3,213 2,665
Retained earnings 50,148 52,316
TOTAL OWNERS’ EQUITY 65,341 66,961
Non-controlling interests -53 -22
TOTAL EQUITY 65,288 66,939
TOTAL LIABILITIES AND OWNERS’ EQUITY 114,795 98,153
CONSOLIDATED INCOME STATEMENT,  1-6/2019
Unaudited
EUR’000 Q2 2019 Q2 2018 6m 2019 6m 2018
Revenue 40,606 33,851 69,889 59,837
Cost of sales -35,519 -29,049 -61,014 -51,691
Gross profit 5,087 4,802 8,875 8,146
Distribution costs -1,474 -1,431 -2,682 -2,592
Administrative expenses -2,450 -2,187 -4,634 -4,116
Other income 83 29 131 43
Other expenses -51 -47 -188 -83
Operating profit 1,195 1,166 1,502 1,398
Finance income 24 342 125 353
Finance costs -61 -11 -104 -25
Profit before tax 1,158 1,497 1,523 1,726
Income tax expense -329 -459 -529 -586
Profit for the period, attributable to 829 1,038 994 1,140
   owners of the Company 843 1,047 1,025 1,180
   non-controlling interests -14 -9 -31 -40
Basic earnings per share  (EUR) 0.05 0.06 0.06 0.07
Diluted earnings per share  (EUR) 0.05 0.06 0.06 0.07

Tiit Atso
CFO
+372 674 7400

Download report

Harju Elekter brings subsidiaries under a joint trademark

The Supervisory board and Management board of AS Harju Elekter decided to consolidate all of the Group’s companies under the trademark Harju Elekter. The use of a joint logo helps increase the competitiveness of the Group and creates additional benefits and possibilities in marketing activities. Based on this, AS Harju Elekter, as the sole shareholder of the Lithuanian subsidiary RIFAS UAB approved HARJU ELEKTER UAB as the new name of the company. A respective entry on the new name was made in the Lithuanian Register of Legal Entities on 2nd of July 2019.

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, Sweden and Lithuania employ 750 specialists, and the consolidated sales revenue of 2018 was 120.8 million euros. Shares of Harju Elekter are listed on Nasdaq Tallinn.

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

 

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

Dividend payment ex-date of Harju Elekter

AS Harju Elekter (HAE1T, ISIN EE3100004250) will close the list of shareholders for dividend payment on 16.05.2019 at the end of the working day of the settlement system.

Proceeding from the above, the ex-date is 15.05.2019. From that date the new owner of the shares is not entitled to dividends for the year 2018.

AS Harju Elekter will pay dividend 0.18 euros per share on 24.05.2019 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

Harju Elekter Group financial results, 1-3/2019

Commentary from Management

AS Harju Elekter finished the first quarter with 29.3 million euros of sales revenue and 0.3 million euros of operating profit. The low profitability was influenced by an increase in production input prices and wages and a lower than expected order volume of Finnish electricity networks. Usually, seasonality has a certain effect in the first quarter.

Change %

   January – March

Year

(thousand euros)

2019

2018

2018

Sales revenue

12.7%

29,283

25,986

120,804

Gross profit

13.3%

3,788

3,344

15,976

EBITDA

37.5%

1,167

849

5,001

EBIT

33.0%

307

231

2,413

Profit for the period

61.7%

165

102

1,514

incl attributed to Owners of the Company

37.2%

182

133

1,546

Revenue and profit

The Group manufactures and sells electrical, control and power automation devices and various metal products. In addition, sales revenue is also earnt on the rental of investment property and electricity works in the shipbuilding sector. The sales revenue of the Group in the reporting quarter was 29.3 (2018 Q1: 26.0) million euros, having increased by 12.7% in relation to the comparable period. The sale of electrical equipment grew by 5.7 million euros, to 25.6 million euros in the first quarter, which was also the main reason for the increased sales revenue of the reporting quarter.

The consolidated gross profit for the reporting quarter was 3.8 (Q1 2018: 3.3) million euros, the gross profit margin remained at the same level of the comparable period, i.e 12.9%. Consolidated operating profit (EBIT) for the first quarter was 0.3 (Q1 2018: 0.2) million euros. The consolidated net profit for the reporting quarter was 0.2 (Q1 2018: 0.1) million euros, of which the share of the owners of the Company was 0.2 (2018 Q1: 0.1) million euros. EPS was 0.01 (2018 Q1: 0.01) in the first quarter.

Markets

Sales to the Estonian market grew by 24.7%, to 3.5 million euros and made up 12.0% (Q1 2018: 10.9%) of the consolidated sales revenue of the reporting quarter. Competition on the home market is tight and winning a procurement is difficult. The Group’s Estonian companies make a significant contribution to increasing our market share in the Estonian market, both in potential procurements and in offering rental premises to corporate customers.

The share of the Group’s products and services sold to the Group’s largest market, Finland, comprised 55.1% in the reporting quarter (Q1 2018: 69.1%). The year-on-year decrease to the Finnish market was by 1.8 million euros, to 16.1 million euros. The decrease in sales revenue was influenced most by the postponed electricity and grid projects in Finland to the second half of the year, shifting the works planned for the beginning of the year to the second and third quarter.

Sales to the Swedish market increased the most, growing by 1.7 million euros, to 3.7 million euros in the first quarter, in relation to the comparable period. The share of the Swedish market in the consolidated sales revenue rose to 12.7% in the reporting quarter (Q1 2018: 7.7%). The growth was due to the added sales revenue of the Swedish subsidiaries, acquired in 2018, as well as the goal-orientated work of other subsidiaries towards Sweden. We expect Swedish sales volumes to increase further in the coming quarters, as indicated by the continued growth of orders from Sweden’s largest grid company E.ON Energidistribution AB, as well as several new major projects with orders starting from the second quarter. In early May, the Group’s subsidiaries will participate in the Scandinavian largest electricity fair Elfack, in Gothenburg.

The sales to Norwegian market doubled to 4 million euros in comparison to the reporting quarters, making up 13.7% (Q1 2018: 8.0%) of the consolidated sales revenue of the reporting quarter. Also continued deliveries and supplies to the Netherlands, where the Group has managed to retain a stable sales revenue for the third quarter in a row. The Netherlands made up 5.4% of the consolidated sales revenue in the reporting quarter.

Business segments

The sales revenue in the Production segment increased by 5.0 million euros, to 25.6 million euros, comprising 87.3% of the consolidated sales revenue in the reporting quarter (Q1 2018: 79.2%). Main share of the sales revenue (99%) in the Production segment comes from the sale of electrical equipment. The sales revenue of Real Estate segment grew by 0.2 million euros, to 0.9 million euros, remaining at the same level compared to the last quarter of the previous year. Rental income is earnt on new rental premises in the Allika Industrial Park and from the tenants in the territory of Keila and Haapsalu industrial parks. The sales revenue of Unallocated activities has declined by 1.9 million euros, to 2.8 million euros year-on-year and is mainly related to decreased volumes of electrical works in the Finnish shipbuilding sector.

Operating expenses

Operating expenses of the reporting quarter were 28.9 (Q1 2018: 25.7) million euros in total. The operating expenses grew by 12.3%, i.e 3.2 million euros, year-on-year, the principal part of which comprised the increase in the cost of sales in the amount of 2.9 million euros. The cost of sales increased at the same pace as sales revenue, leaving the gross margin at the same level as the comparable period (12.9%). The Group’s distribution costs comprised 1.2 million euros in the reporting quarter and the distribution cost rate decreased by 0.4 percentage points, to 4.1% year-on-year. The share of administrative expenses in the sales revenues of the reporting quarter comprised 7.5% (Q1 2018: 7.4%).

Demand for local labour and the relating salary pressure, but also the increased share of employees in Finland and Sweden where the salary level is notably higher than in other Group companies, has raised the labour costs of the reporting period. Labour costs increased by 12.9%, to 6.4 million euros year-on-year. The labour cost rate accounted for 21.8% of the sales revenue in the reporting quarter (Q1 2018: 21.7%).

Employees and remuneration

As at the end of the reporting period, the Group had 744 employees, being 45 employees more than a year ago. In the first quarter of 2019, the Group employed an average of 733 people, which is an average of 54 employees more than in the comparable period. In the reporting quarter, 5.1 (Q1 2018: 4.4) million euros were paid to the employees in salaries and remuneration. Average wages per Group employee was 2,368 euros, an increase of 10.3% to the comparable period. The cost of wages was affected by the hiring of new workers in Sweden, but also by the decision of the Republic of Lithuania to calculate part of the social tax as the gross salary of the employee. The last amendment did not have a significant impact on the labour costs of the Group.

Investments

In the accounting quarter, several important developments of the Group were completed, incl. the completion of the expansion of the production facility of the Lithuanian subsidiary RIFAS UAB and start of production in new premises, and the opening of a new sales office and the central warehouse of the Estonian subsidiary Energo Veritas OÜ at 19 Tuisu Str, Tallinn. In Q1, the Group invested a total of 1.9 million euros in non-current assets, incl. 0.1 million euros in investment properties, 1.7 million euros in property, plant and equipment and 0.1 million euros in intangible assets. The vast majority of the investments, i.e 1.4 million euros, was aimed at the expansion of the production facilities of the Lithuanian subsidiary. In the comparable period, a total of 2.3 million euros were invested in non-current assets, of which 1.0 million was acquired through business combinations.

Main events

  • The expansion works of the production facility of the Lithuanian subsidiary, RIFAS UAB, in Panevežys are nearing the end and new production premises are being taken into use phase by phase. The expansion work will end in the second quarter, whereupon the subsidiary will have 9,000 sq.m of office and production space, instead of the former 3,500 sq.m. Investments in the expansion of the production facility and upgrade of technology enable to add notable production capacity to secure supplies for the customers of the subsidiary in the segments of ship-building and industry. The total volume of investments is 3.5 million euros. In addition, 1.9 ha of land adjacent to existing properties was acquired in the first quarter to ensure the possibility of new extensions in the future.
  • The subsidiary AS Harju Elekter Elektrotehnika received an order for 54 special-purpose prefabricated substations to be supplied to Konecranes during a period of one year. Supplies are sent to the United Arab Emirates.
  • On 1 April, the subsidiary Energo Veritas OÜ opened a new sales office and central warehouse at 19 Tuisu Str, Tallinn. The good location and larger premises create better possibilities for customer service and quicker issuing of goods. Also, the assortment of products in the area of electricity and weak current materials, construction of telecom and power grid will expand notably, and the sales capability of products in Estonia will increase.
  • In connection with the restructuring of the activities of Harju Elekter Group in Finland and consolidation of Satmatic Oy and Finnkumu Oy under one common management, the Group appointed Jan Osa, the former manager of AS Harju Elekter Elektrotehnika, as the new CEO of Satmatic Oy and Finnkumu Oy, who started in this position at Satmatic Oy from 1 April 2019 and at Finnkumu Oy from 1 July 2019. The former head of the sales department Indrek Ulmas was appointed as the managing director of AS Harju Elekter Elektrotehnika starting from 1 April 2019.

The share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.90 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-3/2019

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,31.03.2019
Unaudited
EUR’000
ASSETS 31.03.19 31.12.18
Cash and cash equivalents 4,168 3,142
Short-term financial investments 0 0
Trade receivables and other receivables 24,355 22,218
Prepayments 1,654 1,173
Inventories 21,752 17,468
TOTAL CURRENT ASSETS 51,929 44,001
Deferred income tax asset 97 98
Other long-term financial investments 10,026 9,587
Investment property 19,762 19,804
Property, plant and equipment 20,620 17,403
Intangible assets 7,245 7,260
TOTAL NON-CURRENT ASSETS 57,750 54,152
TOTAL ASSETS 109,679 98,153
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 9,022 6,470
Advances from customers 1,324 1,740
Trade payables and other payables 21,416 14,911
Tax liabilities 2,551 2,409
Short-term provision 17 14
TOTAL CURRENT LIABILITIES 34,330 25,544
Interest-bearing loans and borrowings 7,762 5,635
Other long-term liabilities 34 35
NON-CURRENT LIABILITIES 7,796 5,670
TOTAL LIABILITIES 42,126 31,214
Share capital 11,176 11,176
Share premium 804 804
Reserves 3,114 2,568
Retained earnings 52,498 52,412
TOTAL OWNERS’ EQUITY 67,592 66,960
Non-controlling interests -39 -21
TOTAL EQUITY 67,553 66,939
TOTAL LIABILITIES AND OWNERS’ EQUITY 109,679 98,153
CONSOLIDATED INCOME STATEMENT,  1-3/2019
Unaudited
EUR’000 Q1 2019 Q1 2018
Revenue 29,283 25,986
Cost of sales -25,495 -22,642
Gross profit 3,788 3,344
Distribution costs -1,208 -1,161
Administrative expenses -2,183 -1,930
Other income 48 14
Other expenses -138 -36
Operating profit 307 231
Finance income 101 102
Finance costs -43 -104
Profit before tax 365 229
Income tax expense -200 -127
Profit for the period, attributable to 165 102
   owners of the Company 182 133
   non-controlling interests -17 -31
Basic earnings per share  (EUR) 0.01 0.01
Diluted earnings per share  (EUR) 0.01 0.01

Tiit Atso
CFO
+372 674 7400

AGM decisions

Today, on 2 May 2019 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 83 shareholders and their authorised representatives who represented the total of 12,173,587 votes accounting for 68.62 % of the total votes.

The agenda of the general meeting was as follows:
1. Approval to AS Harju Elekter annual report of 2018;
2. Approval to profit distribution

1. Approval to AS Harju Elekter annual report of the year 2018

The general meeting resolved:
To approve the annual report of AS Harju Elekter of 2018, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 98,153 thousand euros as of 31.12.2018, while the sales revenue of the financial year was 120,804 thousand euros and net profit 1,514 thousand euros.

The number of the votes given in favor of the resolution was 12,173,087 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 2018 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2018

50,769,939 euros

total net profit 2018, attributable to owners of the parent company

1,545,940 euros

total retained profit on 31.12.2018

52,315,879 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

49,122,701 euros

*The shareholders registered in the shareholders’ registry on 16 May 2019 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 15 May 2019. From that date the new owner of the shares is not entitled to dividends for the year 2018. The dividends will be paid to the shareholders on 24 May 2019 by a transfer to the bank account of the shareholder. As a result of the amendment to the Income Tax Act, which entered into force at the beginning of 2018, dividends are paid in two portions.

The number of the votes given in favor of the resolution was 11,600,077 which accounted for 95.29 % 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

Change in AS Harju Elekter subsidiary’s Management Board

The mandate of Andre Koit, member of the Management Board of AS Harju Elekter Teletehnika, an Estonian subsidiary of AS Harju Elekter, expires on 4 April 2019. The Management Board of AS Harju Elekter Teletehnika will continue with one member. The contract of employment of Alvar Sass, the Managing Director of AS Harju Elekter Teletehnika, began on 13.11.2017.

AS Harju Elekter and AS Harju Elekter Teletehnika are grateful for the contribution that Andre Koit, as member of the Management Board of AS Harju Elekter Teletehnika, has made to the development of the company.

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, Sweden and Lithuania employ more than 700 specialists, and the consolidated sales revenue of 2018 was 120.8 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 notice of the AGM

Annual general meeting of Harju Elekter shareholders will be held on Thursday, 2 May 2019, 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 and proposals to the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2018

To approve the annual report of AS Harju Elekter of 2018, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 98,153 thousand euros as of 31.12.2018, while the sales revenue of the financial year was 120,804 thousand euros and net profit 1,514 thousand euros.

2. Approval to profit distribution

To approve the profit distribution proposal of AS Harju Elekter of 2018 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2018

50,769,939 euros

total net profit 2018, attributable to owners of the parent company

1,545,940 euros

total retained profit on 31.12.2018

52,315,879 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

49,122,701 euros

*The shareholders registered in the shareholders’ registry on 16 May 2019 as of the end of the business day in the accounting system, shall be entitled to dividend. The dividend payment ex-date is 15 May 2019. From that date the new owner of the shares is not entitled to dividends for the year 2018. The dividends will be paid to the shareholders on 24 May 2019 by a transfer to the bank account of the shareholder. As a result of the amendment to the Income Tax Act, which entered into force at the beginning of 2018, dividends are paid in two portions.

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 17 April 2019. 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 29 April 2019. 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.com. 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 2018, 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@harjuelekter.com. 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 25 April 2019 as of the end of the business day in the accounting system. Registration of the participants starts on 2 May 2019 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@harjuelekter.com or by submitting the mentioned document(s) on business days from 8.30 AM to 4 PM no later than by 30 April 2019 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 2018

AS Harju Elekter presents its consolidated audited Annual Report for 2018 together with Independent Auditors’ Report. The same is available on Nasdaq Tallinn web site, as well on issuer’s home page www.harjuelekter.com

Consolidated sales revenue for the reporting year reached 120.8 million euros, the consolidated operating profit was 2.4 million euros and consolidated net profit 1.5 million euros.

Audited financial results for the year 2018 and yearbook have been included as attachments to this announcement.

 

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

Annual Report 2018

Yearbook 2018

 

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

 

Harju Elekter Group financial results, 1-12/2018

The sales revenue of AS Harju Elekter for the fourth quarter of 2018 was 31.7 million euros, growing by 10.9% in comparison with the reference period. The consolidated sales revenue for the financial year increased by 18% to 120.8 million euros over the year. In Q4 2018, the Group’s consolidated net profit was 736 thousand euros and for 12 months 1,514 thousand euros. In coordination with the Supervisory Board, the Group’s Management Board proposes to distribute 0.18 euros per share to shareholders in the form of dividends, totalling 3.2 million euros, which is almost twice the net profit for the financial year.

In recent years, AS Harju Elekter has made large-scale investments and active sales work to increase its market share in Scandinavia. From the beginning of 2018, two Swedish companies were merged with the Group. As a result, the Group’s sales have doubled in the last two years but integrating new subsidiaries into the Group is a long-term process and reaching the desired profitability requires extra time and expenses. The profitability of the financial year was significantly affected by the potential loss of 1.9 million euros related to the shipbuilding electrical work taken into account in the second half of the financial year. The actual amount of the loss will be determined at the end of the negotiations and legal disputes.

Change

January – December

Change

October-December

(thousand euros)

%

2018

2017

%

2018

2017

Sales revenue

18.0

120,804

102,402

10.9

31,669

28,552

Gross profit

4.0

15,976

15,359

13.1

4,867

4,304

EBITDA

-34.1

5,001

7,587

-27.5

1,701

2,345

EBIT

-55.7

2,413

5,442

-28.3

1,007

1,404

Profit for the period

-94.8

1,514

29,132

-22.2

736

946

incl attributed to Owners of the Company

-94.7

1,546

29,129

-24.7

735

976

Net profit for the period without extraordinary income

-64.7

1,514

4,293

-22,2

736

946

 

During the reporting quarter 84.2% (Q4 2017: 75.9%) of the Group’s sales revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 15.8% (Q4 2017: 24.1%) of the consolidated sales revenue. The sales revenue of the Real Estate segment increased by 0.3 million euros to 0.8 million euros in the reporting quarter, and by 0.6 million euros to 2.6 million euros in the comparison of years, mainly due to the increase in rental income as the result of the completion and lease of new production and warehouse facilities in Allika Industrial Park. In total, 82.6% (2017: 83.2%) of the Group’s yearly sales revenue was generated from the Manufacturing segment.

The Group’s sales revenue earned outside Estonia accounted for 84.9% in Q4 (Q4 2017: 85.7%), increasing by 2.4 million to 26.9 million euros and in 12 months 87.2% (2017: 84.0%), increasing by 19.4 million to 105.4 million euros.

The Group’s largest market was Finland, where 51.2% in Q4 and 62.5% in 12-months period of the Group’s products and services were sold (75.4% and 73.0%, respectively in 2017). In the quarterly comparison, sale to the Finnish market has decreased by 5.3 million euros to 16.2 million, which was caused of the decline in the orders of Finnish grid companies. Compared to the previous year, Finnish sales remained almost at the same level, i.e. 75.5 (2017: 74.7) million euros.

Sales to Sweden increased the most, with a nearly 10-fold rise to 5.1 million euros in the fourth quarter in comparison with the reference period, and a 5-fold increase to 13.5 million euros in the comparison of years. The Swedish market accounted for 16.2% of the Group’s total sales revenue in the reporting quarter (Q4 2017: 1.8%) and 11.2% in the financial year (2017: 2.7%). Growth was driven by the acquisition of Swedish subsidiaries as well as targeted sales by other companies in the Group, which resulted in contractual deliveries to Sweden’s largest grid company E. ON Energidistribution AB.

Of the most important markets, sales to the Norwegian market also continued to grow, reaching 3.0 million euros in the reporting quarter and 8.7 million euros during the year, forming 9.6% (Q4 2017: 8.2%) of the consolidated sales revenue for the reporting quarter and 7.2% of the consolidated sales revenue for the year (2017: 5.7%). As the Lithuanian subsidiary earned 98.2% (2017: 87.7%) of the sales revenue of the financial year outside the home market, the share of the Lithuanian market in the Group’s sales revenue was minimal, being 0.1% in the reporting quarter and 0.3% in the year. Although sales to the Estonian market in the fourth quarter increased by 16.4% to 4.8 million euros, accounting for 15.1% (Q4 2017: 14.3%) of the consolidated sales revenue for the reporting quarter, it fell by 5.8% to 15.4 million euros over the year. The main reason for the decline was the continued low level of investment in the energy distribution sector, as well as intense competition. The largest of the Group’s other markets was the Netherlands, which generated 1.3 million euros of sales revenue in the reporting quarter and 3.0 million euros of sales revenue in the accounting year. The Austrian and Danish markets earned an annual revenue of 1.7 million euros and 0.9 million euros respectively.

In Q4 2018, an average of 727 employees worked in the Group, which was 107 people more than in the comparable period. In the 12-months period, an average of 713 employees worked in the Group, which was 146 people more than in the reference period. At the end of the reporting period, there were 736 people working in the Group, which was 106 persons more than a year earlier. With the acquisition of Swedish subsidiaries, 45 employees were added to the Group. In the reporting quarter, 4,493 (Q4 2017: 4,127) thousand euros and 18,539 (2017: 14,073) thousand euros during the year were paid to the employees as salaries and fees. In 2018, the average monthly salary per employee of the Group was 2,166 euros, an average increase by 5% compared to the reference period.

In Q4, the Group’s operating profit was 1,007 (Q4 2017: 1,404) thousand euros and EBITDA 1,701 (Q4 2017: 2,345) thousand euros. Return of sales for the reporting quarter was 3.2% (Q4 2017: 4.9%) and return of sales before depreciation 5.4% (Q4 2017: 8.2%).

In 2018, the Group’s operating profit was 2,413 (2017: 5,442) thousand euros and EBITDA 5,001 (2017: 7,587) thousand euros. Return of sales for the reporting year was 2.0% (2017: 5.3%) and return of sales before depreciation 4.1% (2017: 7.4%). Integrating newly acquired businesses and preparations for new and already won procurements continue, leading to higher development and distribution 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.

The net profit before taxes for the reporting quarter was 996 (Q4 2017: 1,234) thousand euros. The calculated income tax expense for the last three months was 260 (Q4 2017: 288) thousand euros. The 12-month consolidated profit before tax was 2,507 (2017: 30,215) thousand euros and the calculated income tax was 993 (2017: 1,083) thousand euros.

In Q4, the consolidated net profit was 736 (Q4 2017: 946) thousand euros, of which the share of the owners of the Company was 735 (Q4 2017:976) thousand euros. All in all, the consolidated net profit in the reporting year was 1,514 (2017: 29,132) thousand euros, of which the share of the owners of the Company was 1,546 (2017: 29,129) thousand euros. In 2018, EPS was 0.09 euros (2017: 1.64 euros). In 2017, a one-time gain of 24,839 thousand euros was received from the sale of PKC Group Oyj shares. The consolidated net profit for the comparable period without extraordinary income was 4,293 thousand euros and EPS was 0.24 euros.

In 2018, the Group has made a total of 10.6 (2017: 9.1) million euros worth of investments to fixed assets. The ongoing developments in Allika Industrial Park and in the construction of the Haapsalu solar plant in amount of 2.5 million euros.

In the end of the year, the share of Harju Elekter in Nasdaq Tallinn 4.12 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2018

AS HARJU ELEKTER
CONSOLIDATED BALANCE SHEET,31.12.2018
Unaudited
EUR’000
ASSETS 31.12.18 31.12.17
Cash and cash equivalents 3,142 10,992
Short-term financial investments 0 9,935
Trade receivables and other receivables 22,218 13,575
Prepayments 1,173 1,174
Inventories 17,468 13,037
TOTAL CURRENT ASSETS 44,001 48,713
Deferred income tax asset 98 56
Other long-term financial investments 9,587 4,684
Investment property 19,804 17,881
Property, plant and equipment 17,403 11,983
Intangible assets 7,260 6,660
TOTAL NON-CURRENT ASSETS 54,152 41,264
TOTAL ASSETS 98,153 89,977
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 6,470 625
Advances from customers 1,740 1,088
Trade payables and other payables 14,911 12,802
Tax liabilities 2,409 2,376
Short-term provision 14 245
TOTAL CURRENT LIABILITIES 25,544 17,136
Interest-bearing loans and borrowings 5,635 2,910
Other long-term liabilities 35 0
NON-CURRENT LIABILITIES 5,670 2,910
TOTAL LIABILITIES 31,214 20,046
Share capital 11,176 11,176
Share premium 804 804
Reserves 2,568 2,844
Retained earnings 52,412 55,048
TOTAL OWNERS’ EQUITY 66,960 69,872
Non-controlling interests -21 59
TOTAL EQUITY 66,939 69,931
TOTAL LIABILITIES AND OWNERS’ EQUITY 98,153 89,977
CONSOLIDATED INCOME STATEMENT,  1-12/2018
Unaudited
EUR’000 Q4 2018 Q4 2017 12m 2018 12m 2017
Revenue 31,669 28,552 120,804 102,402
Cost of sales -26,802 -24,248 -104,828 -87,043
Gross profit 4,867 4,304 15,976 15,359
Distribution costs -1,623 -1,059 -5,267 -3,866
Administrative expenses -2,224 -1,820 -8,223 -5,981
Other income 64 10 124 50
Other expenses -77 -31 -197 -120
Operating profit 1,007 1,404 2,413 5,442
Gain on sale of financial assets 0 0 0 24,839
Finance income 16 20 157 30
Finance costs -27 -190 -63 -96
Profit before tax 996 1,234 2,507 30,215
Income tax expense -260 -288 -993 -1,083
Profit for the period, attributable to 736 946 1,514 29,132
   owners of the Company 735 976 1,546 29,129
   non-controlling interests 1 -30 -32 3
Basic earnings per share  (EUR) 0.04 0.06 0.09 1.64
Diluted earnings per share  (EUR) 0.04 0.06 0.09 1.64

Tiit Atso
CFO
+372 674 7400

Download report

Changes to the management boards of Harju Elekter’s subsidiaries

Due to the restructuring plan of the operations of Harju Elekter in Finland, we hereby announce the changes made in the managements of Satmatic Oy and Finnkumu Oy, fully-owned subsidiaries of AS Harju Elekter. On 31.03.2019, Rainer Timo Nurkkala will resign from the position of CEO of Satmatic Oy and on 30.06.2019, Maire Korpi, will resign from the position of CEO of Finnkumu Oy.

The two above mentioned Finnish subsidiaries of Harju Elekter will be consolidated under common management. The Group appoints Jan Osa, former head of AS Harju Elekter Elektrotehnika, as the new CEO of Satmatic Oy and Finnkumu Oy, who will start working in Satmatic Oy from 1.04.2019 and in Finnkumu Oy from 1.07.2019.

Mr Osa (born 05.11.1969) is a graduate of the Tallinn University of Technology, with a speciality in industrial automation and robotics (1994), and in EBS (Estonian Business School), with an Executive Master of Business Administration, in 2017.  He has worked in the Harju Elekter Group since 1994; as the managing director of AS Harju Elekter Elektrotehnika starting from 2015. Jan Osa owns 19,000 of Harju Elekter shares. He has direct participation 0.11%. He doesn’t have indirect holdings.

In connection with Jan Osa’s new employment as CEO of the Finnish subsidiaries, the former sales director, Indrek Ulmas, was appointed as the managing director of AS Harju Elekter Elektrotehnika, to start performing the duties of the managing director from 1.04.2019.

Mr Ulmas (born 07.08.1972) is a graduate of the Pori School of Technology in the field of electrical equipment and systems (1992). He has worked in the Harju Elekter Group since 2015; as the sales director of AS Harju Elekter Elektrotehnika starting from 2018. Indrek Ulmas doesn’t 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 700 specialists, and 9 months 2018 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

For more information: Andres Allikmäe, Chairman of the Management Board of AS Harju Elekter or Simo Puustelli, Chairman of the Management Board of Satmatic Oy and Finnkumu Oy, tel +358 50 086 5180

 

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

 

Large order received by Harju Elekter’s subsidiary

AS Harju Elekter Elektrotehnika, a subsidiary of AS Harju Elekter, received the order for supplying total of 54 units of specialised pre-fabricated substations to Konecranes within a one-year period. Supplies are directed to the UAE. The parties have agreed to not disclose the value of the transaction. Herein we confirm, that the value of the transaction is not relevant for the purpose of the Stock Exchange.

Over the past years, the production of substations in the Estonian and Finnish plants of the Group have increased to a significant degree reaching an average of 4,000 substations a year today.

Konecranes is the world’s leading group providing lifting 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 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 2018 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

For more 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

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

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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 r