Harju Elekter Group financial results, 1-6/2015

08.08.2015 Reports

The Group’s sales revenue in the accounting quarter was 16.6 (H1 2014: 11.1) million euros and in 6- months period 27.5 (H1 2014: 20.8) million euros. During the reporting quarter, sales revenue increased by 52% or 5.6 million euros compared to the previous quarter, and 50% or 5.5 million euros in relation to the comparison period. The consolidated net profit of the H1 2015 was 1.6 million euros. The results of the first six months of the year were the most affected by the following circumstances: the reporting period that is compared does not reflect the business results of Finnkumu Oy (acquired in June 2014); the net profit of the first six months of 2014 include the financial income from the sale of PKC Group Oyj shares at 4.6 million euros and the consolidated profit of 0.8 million euros from the related company (AS Draka Keila Cables).

Change April – June Change January – June Year
(thousand euros) % 2015 2014 % 2015 2014 2014
Revenue 49.6 16,590 11,092 32.7 27,535 20,753 50,606
Gross profit 60.3 3,081 1,922 32.1 4,779 3,616 9,081
EBITDA 137.9 1,751 736 81.8 2,139 1,177 3,741
EBIT 281.2 1,380 362 236.8 1,408 418 2,228
Profit for the period -73.6 1,573 5,954 -75.0 1,583 6,325 9,778
incl attributed to Owners of the Company -73.9 1,557 5,970 -75.3 1,572 6,361 9,697

There has been a growth in sales revenue among almost all products and services. 91% of sales income was earned from the Production segment, and Real Estate together with other areas of activity contributed 9% of the consolidated sales volume.87%(Q2 2014: 81%) of the reporting quarter sales revenue originated from the sale of electrical equipment. There was 14.4 million euros worth of electrical equipment sold in the reporting quarter, which was 5.4 million euros or 59% more than in the comparison quarter, with sales of equipment growing 38% in the 1st half of the year, to 23.3 million euros. The biggest contribution to the increase of sales volume came from Finnkumu Oy, whose sales income not included in H1 2014 results and from UAB Rifas, whom realized a one large-scale project to Norwegian market in the reporting quarter.

In H1 2015, 76% (H1 2014: 65%) of the Group’s products and services were sold in foreign markets, outside Estonia and in the reporting quarter 79% (Q2 2014: 67%). Finland is the biggest market of the Group and 61% (H1 2014: 50%) of the Group’s products and services were sold on the Finnish market in first half of the year. The share of the Finnish market in the consolidated sales revenue has grown 9 percentage points in the second quarter and 11 percentage points during the half-year when compared to the respective periods of 2014. The share of the Estonian market in the consolidated sales decreased during a year by 10.5 percentage points to 24.1%. The decline was mainly due to the non-performance of the contractual order volume by Eesti Energia, which was one third less than in the comparable period.

Operating expenses increased 41% in the reporting quarter and 29% in the first half of the year compared to the reference periods. Cost of sales increased 47% in the reporting quarter. Since the sales revenue of the reporting quarter increased at a pace that exceeded the cost of sales, improved the gross profit margin. The cost of sales increased 33% during the first six months, at the same pace sales revenue. In H1, distribution cost as well as administrative expenses increased marginally and the rates to revenue decreased accounted  4.9%  (H1 2014: 6.2%) and 7.5% (H1 2014: 9.2%), respectively.

In Q2 2015, the average 481 people worked in the Group − on the average by 37 persons more than in the reference period. In the first half of the year, the average number of employees increased by 32 to 474. During the first 6 months employee wages and salaries totalled 4,802 (H1 2014: 4,331) thousand euros. The average wages per employee per month amounted to 1,714 (H1 2013: 1,633) euros.

In the second quarter the gross profit of the Group was 3,081 (Q2 2014: 1,922) thousand euros. The gross profit margin was 18.6% being 1.3 per cent point better compering to the same period a year before. In the first half of the year, the gross profit of the Group was 4,779 (H1 2014: 3,616) thousand euros and the gross profit margin was 17.4% being on the same level as a year before.

The Group’s operating profit in the reporting quarter was 1,380 (Q2 2014: 362) thousand euros and EBITDA 1,751 (Q2 2014: 736) thousand euros. Return of sales for the accounting quarter was 8.3% (Q2 2014: 3.3%) and return of sales before depreciation 10.6% improving by 4.0 per cent point, compering to the same period a year before.

In H1 2015, EBITDA increased by 962 thousand euros to 2,139 thousand euros and operating profit by 990 thousand euros to 1,408 thousand euros. Return of sales before depreciation 7.8% (H1 2014: 5.7%) and return of sales 5.1% (H1 2014: 2.0%).

PKC Group Oyj paid dividends to the shareholders 0.70 euros per share. Dividend income from the shares was 766 (Q2 20134 906) thousand euros. In total, financial investments yielded a profit of 785 thousand euros in the first half of the year, which was 4,763 thousand euros lower, than in the comparable period. In Q2 2014, 200,000 shares of PKC Group Oyj were sold.

The consolidated net profit of the Q2 2015 was 4,573 (Q2 2014: 5,954) thousand euros, of which the share of the owners of the Company was 1,557 (Q2 2014: 5,970) thousand euros. EPS in the Q2 was 0.09 (Q2 2014: 0.34) euros.

Overall, the consolidated net profit of the H1 2015 was 1,583 (H1 2014: 6,325) thousand euros. The share of the owners of the Company was 1,572 (H1 2014: 6,361) thousand euros. In H1, EPS was 0.09 (H1 2014: 0.37) euros.

During the 6-months period, the Group’s investments to non-current assets totalled 4.5 (H1 2014: 4.0, incl through business combinations 3.3) million euros.

Andres Allikmäe
Managing director/ CEO
+372 674 7400

For more information: Internal report 1-6/2015

 

AS HARJU ELEKTER
BALANCE SHEET, 30.06.2015
Consolidated, unaudited
Group
EUR’000
ASSETS 30.06.15 31.12.14
Cash and cash equivalents 2 263 9 984
Available-for-sale financial assets 0 35
Trade receivables and other receivables 8 914 6 484
Prepayments 688 455
Prepaid income tax 49 79
Inventories 11 141 8 104
TOTAL CURRENT ASSETS 23 055 25 141
Other long-term financial investments 24 128 19 145
Investment property 13 165 12 109
Property, plant and equipment 8 294 7 968
Intangible assets 5 448 5 429
Total non-current assets 51 035 44 651
TOTAL ASSETS 74 090 69 792
LIABILITIES AND OWNERS’ EQUITY
Interest-bearing loans and borrowings 1 641 278
Trade payables and other payables 8 572 6 989
Tax liabilities 1 104 1 072
Income tax liabilities 271 12
Short-term provision 4 39
TOTAL CURRENT LIABILITIES 11 592 8 390
NON-CURRENT LIABILITIES 1 956 1 560
TOTAL LIABILITIES 13 548 9 950
Share capital 12 180 12 180
Unregistered share capital 238 0
Share premium 804 240
Restricted reserves 21 976 19 393
Retained earnings 25 200 26 664
TOTAL OWNERS’ EQUITY 60 398 58 477
Non-controlling interests 144 1 365
TOTAL EQUITY 60 542 59 842
TOT.LIABILIT.AND OWNERS’ EQUITY 74 090 69 792
INCOME STATEMENT,  1-6/2015
Consolidated,unaudited
EUR’000
GROUP    Q2 2015   Q2 2014    H1 2015    H1 2014
NET SALES 16 590 11 092 27 535 20 753
Cost of goods sold -13 509 -9 170 -22 756 -17 137
Gross profit 3 081 1 922 4 779 3 616
Marketing expenses -663 -646 -1 347 -1 296
Administrative expenses -1 028 -929 -2 054 -1 899
Other revenue 7 26 61 35
Other expenses -17 -11 -31 -38
Operating profit 1 380 362 1 408 418
Finance income 771 5 531 785 5 548
Finance costs -22 -9 -29 -16
Income from subsidiaries 0 491 0 815
Profit from normal operations 2 129 6 375 2 164 6 765
Corporate Income tax -556 -421 -581 -440
Profit for the period, attributable to 1 573 5 954 1583 6 325
   owners of the Company 1 557 5 970 1572 6 361
   non-controlling interest 16 -16 11 -36
Basic earnings per share  (EUR) 0,09 0,34 0,09 0,37
Diluted earnings per share  (EUR) 0,09 0,34 0,09 0,37

Interim report 1-6/2015

Tiit Atso
CFO
+372 674 7422

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