The sales revenue of AS Harju Elekter for the fourth quarter of 2018 was 31.7 million euros, growing by 10.9% in comparison with the reference period. The consolidated sales revenue for the financial year increased by 18% to 120.8 million euros over the year. In Q4 2018, the Group’s consolidated net profit was 736 thousand euros and for 12 months 1,514 thousand euros. In coordination with the Supervisory Board, the Group’s Management Board proposes to distribute 0.18 euros per share to shareholders in the form of dividends, totalling 3.2 million euros, which is almost twice the net profit for the financial year.
In recent years, AS Harju Elekter has made large-scale investments and active sales work to increase its market share in Scandinavia. From the beginning of 2018, two Swedish companies were merged with the Group. As a result, the Group’s sales have doubled in the last two years but integrating new subsidiaries into the Group is a long-term process and reaching the desired profitability requires extra time and expenses. The profitability of the financial year was significantly affected by the potential loss of 1.9 million euros related to the shipbuilding electrical work taken into account in the second half of the financial year. The actual amount of the loss will be determined at the end of the negotiations and legal disputes.
|
Change |
January – December |
Change |
October-December |
|||
| (thousand euros) |
% |
2018 |
2017 |
% |
2018 |
2017 |
| Sales revenue |
18.0 |
120,804 |
102,402 |
10.9 |
31,669 |
28,552 |
| Gross profit |
4.0 |
15,976 |
15,359 |
13.1 |
4,867 |
4,304 |
| EBITDA |
-34.1 |
5,001 |
7,587 |
-27.5 |
1,701 |
2,345 |
| EBIT |
-55.7 |
2,413 |
5,442 |
-28.3 |
1,007 |
1,404 |
| Profit for the period |
-94.8 |
1,514 |
29,132 |
-22.2 |
736 |
946 |
| incl attributed to Owners of the Company |
-94.7 |
1,546 |
29,129 |
-24.7 |
735 |
976 |
| Net profit for the period without extraordinary income |
-64.7 |
1,514 |
4,293 |
-22,2 |
736 |
946 |
During the reporting quarter 84.2% (Q4 2017: 75.9%) of the Group’s sales revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 15.8% (Q4 2017: 24.1%) of the consolidated sales revenue. The sales revenue of the Real Estate segment increased by 0.3 million euros to 0.8 million euros in the reporting quarter, and by 0.6 million euros to 2.6 million euros in the comparison of years, mainly due to the increase in rental income as the result of the completion and lease of new production and warehouse facilities in Allika Industrial Park. In total, 82.6% (2017: 83.2%) of the Group’s yearly sales revenue was generated from the Manufacturing segment.
The Group’s sales revenue earned outside Estonia accounted for 84.9% in Q4 (Q4 2017: 85.7%), increasing by 2.4 million to 26.9 million euros and in 12 months 87.2% (2017: 84.0%), increasing by 19.4 million to 105.4 million euros.
The Group’s largest market was Finland, where 51.2% in Q4 and 62.5% in 12-months period of the Group’s products and services were sold (75.4% and 73.0%, respectively in 2017). In the quarterly comparison, sale to the Finnish market has decreased by 5.3 million euros to 16.2 million, which was caused of the decline in the orders of Finnish grid companies. Compared to the previous year, Finnish sales remained almost at the same level, i.e. 75.5 (2017: 74.7) million euros.
Sales to Sweden increased the most, with a nearly 10-fold rise to 5.1 million euros in the fourth quarter in comparison with the reference period, and a 5-fold increase to 13.5 million euros in the comparison of years. The Swedish market accounted for 16.2% of the Group’s total sales revenue in the reporting quarter (Q4 2017: 1.8%) and 11.2% in the financial year (2017: 2.7%). Growth was driven by the acquisition of Swedish subsidiaries as well as targeted sales by other companies in the Group, which resulted in contractual deliveries to Sweden’s largest grid company E. ON Energidistribution AB.
Of the most important markets, sales to the Norwegian market also continued to grow, reaching 3.0 million euros in the reporting quarter and 8.7 million euros during the year, forming 9.6% (Q4 2017: 8.2%) of the consolidated sales revenue for the reporting quarter and 7.2% of the consolidated sales revenue for the year (2017: 5.7%). As the Lithuanian subsidiary earned 98.2% (2017: 87.7%) of the sales revenue of the financial year outside the home market, the share of the Lithuanian market in the Group’s sales revenue was minimal, being 0.1% in the reporting quarter and 0.3% in the year. Although sales to the Estonian market in the fourth quarter increased by 16.4% to 4.8 million euros, accounting for 15.1% (Q4 2017: 14.3%) of the consolidated sales revenue for the reporting quarter, it fell by 5.8% to 15.4 million euros over the year. The main reason for the decline was the continued low level of investment in the energy distribution sector, as well as intense competition. The largest of the Group’s other markets was the Netherlands, which generated 1.3 million euros of sales revenue in the reporting quarter and 3.0 million euros of sales revenue in the accounting year. The Austrian and Danish markets earned an annual revenue of 1.7 million euros and 0.9 million euros respectively.
In Q4 2018, an average of 727 employees worked in the Group, which was 107 people more than in the comparable period. In the 12-months period, an average of 713 employees worked in the Group, which was 146 people more than in the reference period. At the end of the reporting period, there were 736 people working in the Group, which was 106 persons more than a year earlier. With the acquisition of Swedish subsidiaries, 45 employees were added to the Group. In the reporting quarter, 4,493 (Q4 2017: 4,127) thousand euros and 18,539 (2017: 14,073) thousand euros during the year were paid to the employees as salaries and fees. In 2018, the average monthly salary per employee of the Group was 2,166 euros, an average increase by 5% compared to the reference period.
In Q4, the Group’s operating profit was 1,007 (Q4 2017: 1,404) thousand euros and EBITDA 1,701 (Q4 2017: 2,345) thousand euros. Return of sales for the reporting quarter was 3.2% (Q4 2017: 4.9%) and return of sales before depreciation 5.4% (Q4 2017: 8.2%).
In 2018, the Group’s operating profit was 2,413 (2017: 5,442) thousand euros and EBITDA 5,001 (2017: 7,587) thousand euros. Return of sales for the reporting year was 2.0% (2017: 5.3%) and return of sales before depreciation 4.1% (2017: 7.4%). Integrating newly acquired businesses and preparations for new and already won procurements continue, leading to higher development and distribution costs, and due to hiring new specialists, increase labour costs. The profitability was also affected by one-off expenses due to the move of AS Harju Elekter Teletehnika into new premises and re-certification of subsidiaries’ quality and environmental management systems.
The net profit before taxes for the reporting quarter was 996 (Q4 2017: 1,234) thousand euros. The calculated income tax expense for the last three months was 260 (Q4 2017: 288) thousand euros. The 12-month consolidated profit before tax was 2,507 (2017: 30,215) thousand euros and the calculated income tax was 993 (2017: 1,083) thousand euros.
In Q4, the consolidated net profit was 736 (Q4 2017: 946) thousand euros, of which the share of the owners of the Company was 735 (Q4 2017:976) thousand euros. All in all, the consolidated net profit in the reporting year was 1,514 (2017: 29,132) thousand euros, of which the share of the owners of the Company was 1,546 (2017: 29,129) thousand euros. In 2018, EPS was 0.09 euros (2017: 1.64 euros). In 2017, a one-time gain of 24,839 thousand euros was received from the sale of PKC Group Oyj shares. The consolidated net profit for the comparable period without extraordinary income was 4,293 thousand euros and EPS was 0.24 euros.
In 2018, the Group has made a total of 10.6 (2017: 9.1) million euros worth of investments to fixed assets. The ongoing developments in Allika Industrial Park and in the construction of the Haapsalu solar plant in amount of 2.5 million euros.
In the end of the year, the share of Harju Elekter in Nasdaq Tallinn 4.12 euros.
Andres Allikmäe
Chairman of the Management Board
+372 674 7400
For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2018
| AS HARJU ELEKTER | ||||
| CONSOLIDATED BALANCE SHEET,31.12.2018 | ||||
| Unaudited | ||||
| EUR’000 | ||||
| ASSETS | 31.12.18 | 31.12.17 | ||
| Cash and cash equivalents | 3,142 | 10,992 | ||
| Short-term financial investments | 0 | 9,935 | ||
| Trade receivables and other receivables | 22,218 | 13,575 | ||
| Prepayments | 1,173 | 1,174 | ||
| Inventories | 17,468 | 13,037 | ||
| TOTAL CURRENT ASSETS | 44,001 | 48,713 | ||
| Deferred income tax asset | 98 | 56 | ||
| Other long-term financial investments | 9,587 | 4,684 | ||
| Investment property | 19,804 | 17,881 | ||
| Property, plant and equipment | 17,403 | 11,983 | ||
| Intangible assets | 7,260 | 6,660 | ||
| TOTAL NON-CURRENT ASSETS | 54,152 | 41,264 | ||
| TOTAL ASSETS | 98,153 | 89,977 | ||
| LIABILITIES AND OWNERS’ EQUITY | ||||
| Interest-bearing loans and borrowings | 6,470 | 625 | ||
| Advances from customers | 1,740 | 1,088 | ||
| Trade payables and other payables | 14,911 | 12,802 | ||
| Tax liabilities | 2,409 | 2,376 | ||
| Short-term provision | 14 | 245 | ||
| TOTAL CURRENT LIABILITIES | 25,544 | 17,136 | ||
| Interest-bearing loans and borrowings | 5,635 | 2,910 | ||
| Other long-term liabilities | 35 | 0 | ||
| NON-CURRENT LIABILITIES | 5,670 | 2,910 | ||
| TOTAL LIABILITIES | 31,214 | 20,046 | ||
| Share capital | 11,176 | 11,176 | ||
| Share premium | 804 | 804 | ||
| Reserves | 2,568 | 2,844 | ||
| Retained earnings | 52,412 | 55,048 | ||
| TOTAL OWNERS’ EQUITY | 66,960 | 69,872 | ||
| Non-controlling interests | -21 | 59 | ||
| TOTAL EQUITY | 66,939 | 69,931 | ||
| TOTAL LIABILITIES AND OWNERS’ EQUITY | 98,153 | 89,977 | ||
| CONSOLIDATED INCOME STATEMENT, 1-12/2018 | ||||
| Unaudited | ||||
| EUR’000 | Q4 2018 | Q4 2017 | 12m 2018 | 12m 2017 |
| Revenue | 31,669 | 28,552 | 120,804 | 102,402 |
| Cost of sales | -26,802 | -24,248 | -104,828 | -87,043 |
| Gross profit | 4,867 | 4,304 | 15,976 | 15,359 |
| Distribution costs | -1,623 | -1,059 | -5,267 | -3,866 |
| Administrative expenses | -2,224 | -1,820 | -8,223 | -5,981 |
| Other income | 64 | 10 | 124 | 50 |
| Other expenses | -77 | -31 | -197 | -120 |
| Operating profit | 1,007 | 1,404 | 2,413 | 5,442 |
| Gain on sale of financial assets | 0 | 0 | 0 | 24,839 |
| Finance income | 16 | 20 | 157 | 30 |
| Finance costs | -27 | -190 | -63 | -96 |
| Profit before tax | 996 | 1,234 | 2,507 | 30,215 |
| Income tax expense | -260 | -288 | -993 | -1,083 |
| Profit for the period, attributable to | 736 | 946 | 1,514 | 29,132 |
| owners of the Company | 735 | 976 | 1,546 | 29,129 |
| non-controlling interests | 1 | -30 | -32 | 3 |
| Basic earnings per share (EUR) | 0.04 | 0.06 | 0.09 | 1.64 |
| Diluted earnings per share (EUR) | 0.04 | 0.06 | 0.09 | 1.64 |
Tiit Atso
CFO
+372 674 7400
