Suspension of the activities of Swedish subsidiary Harju Elekter AB

28.02.2014 Market Announcements

According to the 27 February 2014 decision of the Supervisory board of AS Harju Elekter to reorganise the Group’s Sweden-oriented activities, as of 1 April 2014, the activities of Swedish subsidiary Harju Elekter AB will be suspended for an unspecified term.

Founded in 2010, subsidiary Harju Elekter AB has acquired a fully functional client base during these three years. According to the Group’s development strategy, Scandinavia and Sweden continue to be important target markets, but the reason behind this step was the inefficient and cost-intensive business model that was implemented between 2011 and 2013. While sales volumes continued to increase year by year, the relatively steep costs did not make it possible to reach the desired business results.

As at 31.12.2013, Harju Elekter AB’s balance sheet total in the Group’s assets was 0.25%, making up 184,000 euros (31.12.2012: 342, 000 euros). The company’s sales revenue in 2013 was 703,000 euros (2012: 532,000 euros), making up 1.4% and 1.0% of the consolidated sales revenue, respectively. The financial year resulted in a loss of 190,000 euros (2012: 140,000 euros).

After the reorganisation, responsibility for the Group’s Sweden-oriented business activities and the local clients will be taken over by the sales and development teams of Harju Elekter’s subsidiary AS Harju Elekter Elektrotehnika, along with partner agents based in Sweden. All unfinished projects will be carried over to AS Harju Elekter Elektrotehnika, who will continue with active sales and participation in tenders. After the reorganisation, the main focus will be put on efficient development and sales.

AS Harju Elekter is a leading manufacturer of MV/LV electrical equipment and automation solutions in the Baltic countries and well-known producer in Scandinavia. Harju Elekter Group includes the manufacturers of electrical equipment in Estonia, Finland and Lithuania: AS Harju Elekter Elektrotehnika (100%), Satmatic Oy (100%) and Rifas UAB (63%), as well as the manufacturer of telecommunications products AS Harju Elekter Teletehnika (100%), Harju Elekter also has a related company AS Draka Keila Cables (34%) as well as financial investments in the Latvian seller of electrical equipment SIA Energokomplekss (14%) and the Finnish company PKC Group Oyj (5%).

Andres Allikmäe
CEO/Managing director
Tel: +372 674 7400

Additional information: Andres Allikmäe, Managing director and Endel Palla, Chairman of the Supervisory Board (tel: +372 674 7449).

Prepared by:
Moonika Vetevool
Corporate communication and investor relations manager
Tel: +372 671 2761