Revenue, Expenses, and Profit
Despite the challenges provided over the past year, Q4 and the year 2020 both were full of changes and successful for Harju Elekter. The Group’s large-scale investments in recent years and active sales work to increase its market share in the Scandinavian and in native market have come to bear fruits. Sales orders carried over from previous periods and additional orders in the reporting year resulted in record revenue and profit in the reporting quarter and in the reporting year.
|Operating profit (EBIT)||
|Profit for the period||
|Incl. attributable to owners of the parent||
Earnings per share (EPS) (euros)
The total operating expenses for the reporting quarter were 34.0 (Q4 2019: 31.1) million euros. The majority of the increase in expenses was due to an increase in the cost of sales: 2.4 million euros year-on-year. The Group’s companies were actively seeking opportunities to increase business volumes for upcoming periods by participating in several procurements, as a result of which distribution costs have increased to 2.2 million euros, this being an 0.7 million increase from the comparable quarter. Compared to the comparable quarter and year, labor costs increased, amounting to 7.3 (Q4 2019: 7.2) and 27.3 (2019: 26.7) million euros, respectively. The reason for the increase in labour costs primarily lies in the good financial results of the Group’s companies. In 2020 while extraordinary production shifts have also been made during this difficult year, being accompanied by an increase in working hours and higher bonuses.
The consolidated unaudited revenue of the Group was 35.2 (Q4 2019: 31.2) million euros in the reporting quarter and a total of 146.6 (2019: 143.4) million euros in the reporting year.
The consolidated gross profit for the reporting quarter was 5,585 (Q4 2019: 3,995) thousand euros and the gross profit margin was 15.8% (Q4 2019: 12.8%). The consolidated gross profit for the reporting year was 21,209 (2019: 18,244) thousand euros and the gross profit margin was 14.5% (2019: 12.7%). Quarterly consolidated operating profit (EBIT) was six times higher than in the same period of last year and doubled on a yearly basis, amounting to 1,335 (Q4 2019: 210) and 6,546 (2019: 3,273) thousand euros, respectively. The operating margin increased by 3.1 percentage points to 3.8% in the reporting quarter and by 2.2 percentage points to 4.5% in twelve months.
The consolidated net profit for the reporting quarter was 1,159 (Q4 2019: 55) thousand euros, and earnings per share were 0.07 (Q4 2019: 0.00) euros. Net profit for the year 2020 increased by 133.5% compared to the comparable period, reaching 5,528 (2019: 2,367) thousand euros. Earnings per share for the reporting year were 0.31 (2019: 0.14) euros.
Core Business and Markets
The Group’s core business, Production, accounted for 86% of the Group’s consolidated revenue. The largest target markets of the Group are Estonia, Finland, Sweden, and Norway. Quarterly sales to the Estonian market increased by 2.9 million to 6.5 million euros in a year-on-year comparison and 6.7 million to 23.5 million euros within twelve-month comparison. Most of the deliveries of the prefabricated substations for Elektrilevi OÜ, whose tender was won in 2019, were postponed to the second half of the reporting year due to difficulties in the availability of individual materials and components.
Sales to the Finnish market decreased by 1.0 million euros to 13.8 million euros in a quarterly comparison, from Q2 onwards, mostly being affected by a decrease in orders in the industrial automation sector. The decrease in orders in the three quarters also affected the result of the financial year with the revenue from the Finnish market decreasing by 3.0 million euros to 68.7 million in a yearly comparison. The majority of the sales volume was generated by sales to Finnish electricity network companies, whose orders were declining due to the renewal of procurement contracts. Harju Elekter proved to be successful in most of the new procurements.
Sales to the Swedish market increased the most. The revenue earned on the Swedish market almost doubled in the comparison of the reporting quarters, totalling 9.1 million euros. In a year comparison, Sweden’s revenue increased by 7.0 million euros to 26.5 million euros, being the second largest market overall. The growth was supported by an increase in the sale of substations, manufactured in Estonia, to the Swedish market as well as the overall growth in orders in Sweden.
Norway ranks fourth in the Group’s markets, accounting for 7.8% of the Group’s fourth quarter revenue, being 2.8 million euros. During the reporting year, the Norwegian market earned 16.7 million euros, which is 4.9 million euros less than in the previous year. The decrease in the revenue in Norway was caused by record-high orders in Q3 and Q4 of the previous year.
The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.18 euros. As of 31 December 2020, AS Harju Elekter had 5,084 shareholders. The number of shareholders increased during the reporting quarter by 253 persons.
The Group’s dividend policy mandates that at least one third of the net profit from ordinary economic activities is paid out as dividends. Proposing the payment of dividends, the Management Board has considered the significantly improved financial results, as well as the making of increased investments and the betterment of the financial position. In coordination with the Supervisory Board, the Group’s Management Board will propose to pay dividends to the shareholders 0.16 euros per share, totalling 2.8 million euros and representing 51% of consolidated net profit in 2020.
|CONSOLIDATED STATEMENT OF FINANCIAL POSITION|
31 December 2020
|Cash and cash equivalents||2,843||4,878|
|Trade and other receivables||27,226||22,958|
|Total current assets||49,745||48,012|
|Deferred income tax assets||514||472|
|Non-current financial investments||11,918||10,494|
|Property, plant, and equipment||22,494||20,402|
|Total non-current assets||65,730||59,887|
|LIABILITIES AND EQUITY|
|Prepayments from customers||4,182||2,212|
|Trade and other payables||15,837||16,448|
|Total current liabilities||34,980||32,958|
|Other non-current liabilities||66||64|
|Total non-current liabilities||7,098||7,965|
|Total equity attributable to the owners of the parent company||73,547||67,091|
|TOTAL LIABILITIES AND EQUITY||115,475||107,899|
|Cost of sales||-29,658||-27,251||-125,405||-125,153|
|Profit before tax||1,246||156||6,304||3,187|
|Profit for the period||1,159||55||5,528||2,367|
|Profit attributable to:|
|Owners of the parent company||1,165||77||5,563||2,460|
|Earnings per share|
|Basic earnings per share (EUR)||0.07||0||0.31||0.14|
|Diluted earnings per share (EUR)||0.07||0||0.31||0.14|
Chairman of the Management Board
+372 674 7400