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.

2. 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:

The Management Board proposes the distribution of profits as follows:

*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.

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.

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

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)

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.

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.”

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.

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.

Interim Report Q4 2023 

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

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/

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/

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’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.

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.

HEG Interim Report Q3 2023

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

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/

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

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/

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 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.

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.

HEG Interim Report Q2 2023

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

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

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

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

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

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

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

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

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

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:

*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

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.

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.

The Interim Report of Harju Elekter Q1 2023

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

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.

2. 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:

The Management Board proposes the distribution of profits as follows:

*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.

3. 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

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

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

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.

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.

Tiit Atso
Chairman of the Board
+372 674 7400

Interim Report of Harju Elekter Q4 2022

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

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

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

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

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

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

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

“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.”

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

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, 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.

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 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’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.

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.

The Interim Report of Harju Elekter Group for Q3 2022

Tiit Atso
Chairman of the Board
+372 674 7400

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.” 

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.

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

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

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

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/

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.

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.

Interim Report of Harju Elekter Group Q2 2022

Tiit Atso
Chairman of the Board
+372 674 7400

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

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.

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!

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/

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

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

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

The Supervisory Board of AS Harju Elekter decided on May 20^th, 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

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

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

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

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

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

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.

2. 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:

*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

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.

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.