2014 was an eventful and successful year for the Harju Elekter Group. Despite the fact that the economic environment and the markets were unstable and volatile, we were able to reach the goals we set for ourselves and increasing Group’s sales revenue and profit.
In July 2014, Group’s subsidiary Satmatic Oy purchased all shares of Finland’s largest pre-fabricated substation producer Finnkumu Oy, whose financial statements of the second half of the year comprises Group’s Q4 and 1-12/2014 interim report since 1 July 2014. In July 2014, Group sold its 34% holding in AS Draka Keila Cables to the core investor Prysmian Group. Affiliated company’s profit is consolidated by the equity method till 30.6.2014. Both of these events had an impact on both the Group’s accounting quarter as well as 12-months consolidated financial results.
The Group’s revenue increased in the reporting quarter by 15.3%, compared to the Q4 2013 and amounted to 14.2 million euros. Consolidated sales revenue for the reporting year reached 50.6 million euros, having increased 4.8% in relation to the comparable period. 70% of the Group’s products and services were sold outside Estonia.
90.5% of sales revenue was earned from the Production segment, and Real Estate together with Unallocated Activities contributed 9.5% of the consolidated sales volume. The Manufacturing segment is engaged in the manufacturing and sales of electricity distribution and control equipment and in related activities. The revenue from the sales of electrical equipment comprised 93.6% of the sales volume for Manufacturing and 84.7% of the consolidated revenue. The sale of electrical equipment grew by 21.8% to 12.4 million euros in Q4, and 7.3% to 42.9 million euros in the 12 month period.
As at the balance date on 31 December, there were 483 people working in the Group, which were 32 employees more than a year before. With the purchase of Finnkumu Oy, the Group gained 18 employees. In Q4 2014, the average 465 people worked in the Group – on the average by 29 persons more than in the reference period. During 12 months, the average number of employees decreased by 4 to 459.
Labour costs increased in Q4 by 9.6% to 3.2 million euros and in 12-months period by 6.0% to 12.0 million euros. The rate of labour costs to revenue formed 23.8% (2013: 23.5%). In the Q4, employee wages and salaries totalled 2,503 (Q4 2013: 2,247) thousand euros and during the 12-months period 9,194 (2013: 8,645) thousand euros. The average wages per employee per month amounted to 1,669 (2013: 1,584) euros.
Cost of sales increased 17.6% in the reporting quarter and 4.3% in 12-months period, at a rate slightly higher the sales revenue by 2.2 percentage points in reporting quarter and below by 0.5 percentage points in 12-months. Overall, the growth rate of operating expenses lagged behind that of sales revenue, having increased in the reporting quarter by 15.1%, to 14.9 million euros, in the 12-month period by 3.8%, to 48.3 million euros.
Accordingly, the Group’s operating profit in the reporting quarter was 0.3 (Q4 2013: 0.2) million euros and EBITDA 0.7 (Q4 2013: 0.6) million euros. Return of sales for the accounting quarter was 2.0% (Q4 2013: 1.7%) and return of sales before depreciation 4.6% being 0.5 per cent point lower compering to the same period a year before. During 12-months period, EBITDA as well EBIT increased both by 0.5 million euros to 3.7 million and to 2.2 million euros, respectively. Return of sales before depreciation for the accounting year improved by 0.6 per cent point and was 7.4% and return of sales by 0.8 per cent point being 4.4%.
PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 907 (2013: 948) thousand euros. In the second quarter, also 200,000 shares of PKC Group Oyj were sold and the financial income from selling the shares was 4.6 (2013: 1.7) million euros. The profit from financial investment totalled 5.6 million euros in the 12-months period (2013: 2.6 million euros). During the 12 months, finance income amounted to 5.7 (2013: 2.6) million euros.
In the Q3 2014, the Group sold their 34% holding in AS Draka Keila Cables and the financial income from selling the shares was 1.8 million euros. In the accounting period, the Group consolidated from the associated company a profit of 0.8 (2013: 1.3) million euros.
The consolidated net profit of the reporting year was 9.8 million euros, increasing approximately 4.6 million euros compared to the previous period. The share of the owners of the Company was 9.7 million euros. EPS in 12 months was 0.56 (2013: 0.30) euros.
For more information: Internal report 1-12/2014