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

27.10.2021 Reports Market Announcements

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

Revenue, Expenses, and Profit

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


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

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

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

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

Core Business and Markets

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

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

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

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

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


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


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

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



EUR’000 30 September


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



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


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

Interim Report Q3 2021

Tiit Atso
Chairman of the Board
+372 674 7400