The reporting quarter was successful for the Harju Elekter Group. Despite the fact that the economic environment was unstable, we were able to reach the goals we set for ourselves.
|
January – March |
Year |
||
|
2016 |
2015 |
2015 |
|
| Revenue (thousand euros) |
11,757 |
10,945 |
60,656 |
| Gross profit (thousand euros) |
2,069 |
1,698 |
10,299 |
| EBITDA (thousand euros) |
780 |
388 |
4,819 |
| EBIT (thousand euros) |
390 |
29 |
3,276 |
| Profit for the period (thousand euros) |
311 |
10 |
3,186 |
| incl attributed to Owners of the Company (thousand euros) |
324 |
16 |
3,190 |
In the accounting quarter, the Group’s consolidated revenue was 11.8 (2015 Q1: 10.9) million euros. Sales revenue of the reporting quarter increased by 7% or 0.8 million euros in relation to the comparison period. 89% of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 11% of the consolidated sales volume. The sales of electrical equipment accounted for 94% (Q1 2015: 91%) of the sales revenue of the Production segment and 84% (Q1 2015: 81%) of the sales revenue of the whole Group. The sale of electrical equipment was up by 11% or 935,000 euros. The increase of rent revenue was mainly due to the completion of the production building in Allika Industrial Village in June 2015, due to which rental revenues have increased 8% (38,000 euros) in Q1 2016.
The Finnish market, which is the Group’s largest, has grown by 20% or 1,235,000 euros year-on-year. In the reporting quarter, 63% of the Group’s products and services were sold on the Finnish market (Q1 2015: 56%). Most of the Group’s enterprises have managed to grow their sales volumes on the Finnish market. According to the estimates made by the Group’s management, the share of the Finnish market is set to increase even further in 2016.
Sales to the Swedish market have grown by 160% or 487,000 euros year-on-year. While the operations of the Swedish company Harju Elekter AB have been suspended, AS Harju Elekter Elektrotehnika has been working towards increasing its sales volumes on the Swedish markets.
During the reporting quarter 26% (Q1 2015: 28%) of the Group’s products and services were sold on the Estonian market.
In the reporting quarter, the operating expenses increased by 4%. The cost of sales increased by 5% up to 9,688,000 euros. In the reporting quarter, the distribution costs increased by 39,000 euros to 723,000 euros, the rate of distribution costs to revenue accounted for 6.1% (Q1 2015: 6.2%). Administrative expenses were 79,000 euros lower than the indicator for the comparable period, and the rate of administrative expenses to revenue accounted for 8.1%, having decreased by 1.3 percentage points.
The optimisation of production, which started in the second half of 2015 in the Group’s Estonian enterprises, involved staff reductions. In Q1 2016, the average 453 people worked in the Group − on the average by 14 persons less than in the reference period; employee wages and salaries totalled 2,374,000 (Q1 2015: 2,388,000) euros. The average wages per employee per month amounted 1,747 (Q1 2015: 1,705) euros. The labor costs decreased by 4.5% to 2,950,000 euros and the share of labour costs in sales revenue from 28% in Q1 2015 to 25% in the reporting quarter.
In the reporting quarter, profits as well as profit margins have improved compared to the reference period. In the first quarter the gross profit of the Group was 2,069,000 (Q1 2015: 1,698,000) euros. The gross profit margin was 17.6% (Q1 2015: 15.5%).
The Group’s operating profit of Q1 2016 was 390,000 (Q1 2015:29,000) euros and EBITDA 780,000 (Q1 2015: 388,000) euros. Return of sales for the accounting quarter was 3.3% (Q1 2015: 0.3%) and return of sales before depreciation 6.6% (Q1 2015: 3.5%).
Overall, the consolidated net profit of the Q1 2016 was 311,000 (Q1 2015: 10,000) euros, of which the share of the owners of the Company was 324,000 (Q1 2015: 16,000) euros. EPS in the Q1 was 0.02 euros.
During the 3-months period, the Group’s investments to non-current assets totalled 49,000 euros (Q1 2015: 1.04 million euros). Major investments in the Group are planned to H2 2016.
Post-balance events
At its 5 April 2016 meeting, the Supervisory Board of AS Harju Elekter decided to merge the metal factories of the Group’s Estonian subsidiaries – AS Harju Elekter Elektrotehnika and AS Harju Elekter Teletehnika, consolidating the sheet metal processing resources of the entire Group into AS Harju Elekter Teletehnika. The outcome of restructuring is significant economy in terms of manufacturing as well as labour costs. The merger of factories will be realised over the course of 2016.
The general meeting of shareholders of PKC Group Oyj, held on 4 April 2016, decided to pay dividends amounting to 0.70 euros per share. Dividends were transferred to the bank accounts of shareholders on 15 April 2016. AS Harju Elekter owns 1,094,641 of PKC Group Oyj shares. The dividend income of 766,000 euros is reflected in the profit and cash flow from investment activity for Q2 of 2016. The 15% income tax on dividends, withheld in Finland, accounted for 115,000 euros. The cash flow from investment activity (PKC Group dividends) accounted for 651,000 euros.
The Management Board of AS Harju Elekter called an annual general meeting of shareholders on 28 April 2016. The Board will propose to the AGM to pay a dividend of 0.05 (2014: 0.15) euros per share for the year 2015, totalling 877 (2014: 2,610) thousand euros. The Management Board also supports the Supervisory Board’s proposals to amend the articles of association and the reduction of share capital to 11.2 million euros, involving an additional disbursement of 0.07 euro per share to the shareholders.
In April, a preliminary contract was concluded with Stera Technologies Oy, manufacturer of mechanical and electromechanical assemblies, for the construction and subsequent rental of production facilities in Allika Industrial Park, which belongs to the Group. The total size of the production facilities is 8400 m2 and they will be delivered to the lessee in two stages, in April 2017 and October 2018.
Andres Allikmäe
Managing director/ CEO
+372 674 7400
For more information: Internal report 1-3/2016
| BALANCE SHEET, 31.03.2016 | ||
| Unaudited | ||
| Group | ||
| EUR’000 | ||
| ASSETS | 31.03.16 | 31.12.15 |
| Cash and cash equivalents | 5 513 | 5 711 |
| Trade receivables and other receivables | 7 982 | 6 678 |
| Prepayments | 375 | 278 |
| Prepaid income tax | 56 | 28 |
| Inventories | 8 094 | 7 148 |
| TOTAL CURRENT ASSETS | 22 020 | 19 843 |
| Deferred income tax asset | 57 | 57 |
| Other long-term financial investments | 19 476 | 20 188 |
| Investment property | 12 868 | 12 990 |
| Property, plant and equipment | 7 816 | 8 010 |
| Intangible assets | 5 466 | 5 491 |
| Total non-current assets | 45 683 | 46 736 |
| TOTAL ASSETS | 67 703 | 66 579 |
| LIABILITIES AND OWNERS’ EQUITY | ||
| Interest-bearing loans and borrowings | 222 | 296 |
| Trade payables and other payables | 7 725 | 6 043 |
| Tax liabilities | 886 | 944 |
| Income tax liabilities | 146 | 146 |
| Short-term provision | 9 | 34 |
| TOTAL CURRENT LIABILITIES | 8 988 | 7 463 |
| NON-CURRENT LIABILITIES | 912 | 912 |
| TOTAL LIABILITIES | 9 900 | 8 375 |
| Share capital | 12 418 | 12 418 |
| Share premium | 804 | 804 |
| Restricted reserves | 17 335 | 18 047 |
| Retained earnings | 27 141 | 26 817 |
| TOTAL OWNERS’ EQUITY | 57 698 | 58 086 |
| Non-controlling interests | 105 | 118 |
| TOTAL EQUITY | 57 803 | 58 204 |
| TOT.LIABILIT.AND OWNERS’ EQUITY | 67 703 | 66 579 |
| INCOME STATEMENT, 1-3/2016 | ||
| Unaudited | ||
| EUR’000 | ||
| GROUP | Q1 2016 | Q1 2015 |
| NET SALES | 11 757 | 10 945 |
| Cost of goods sold | -9 688 | -9 247 |
| Gross profit | 2 069 | 1 698 |
| Marketing expenses | -723 | -684 |
| Administrative expenses | -947 | -1 025 |
| Other revenue | 10 | 54 |
| Other expenses | -19 | -14 |
| Operating profit | 390 | 29 |
| Finance income | 1 | 14 |
| Finance costs | -6 | -7 |
| Profit from normal operations | 385 | 36 |
| Corporate Income tax | -74 | -26 |
| Profit for the period, attributable to | 311 | 10 |
| owners of the Company | 324 | 16 |
| non-controlling interest | -13 | -6 |
| Basic earnings per share (EUR) | 0,02 | 0,00 |
| Diluted earnings per share (EUR) | 0,02 | 0,00 |
Tiit Atso
CFO
+372 674 7422
