Published: 2021-04-28 07:00:00 CEST
Harju Elekter
Quarterly report

Harju Elekter Group financial results, 1-3/2021

Estonia, 2021-04-28 07:00 CEST -- The first quarter at Harju Elekter was a period of preparations for the year: developments were started to fulfil the new framework contracts in Finland and Sweden, the construction of the Lithuanian plant extension reached its final stages, and the full-time operation of the industrial robot was launched. Although revenue increased both in Estonia and Sweden, the decrease in revenue was affected by the postponements of the installation works in the Group’s largest market, Finland. Despite the health and raw materials crisis, the Group did not have to stop production for a single day. The increase in client queries and orders in all operating segments gives reason to believe that a challenging yet fascinating economic cycle awaits after the retreat of the crisis.

Revenue, Expenses, and Profit

The consolidated unaudited revenue for the first quarter of 2021 was 30.7 (Q1 2020: 35.0) million euros, which was 12.2% more modest than in the reference period. In addition to the usual seasonality, the profitability of the quarter was also affected by the postponed instalment works of our customers due to the snowy winter months, which did not have a similar effect in the reference period. The situation was amplified by supply difficulties caused by a shortage of materials.


 EUR'000   Q1 Q1 +/-
    2021 2020  
Revenue   30,717 34,998 -12.2%
Gross profit   3,844 4,923 -21.9%
EBITDA   1,485 1,943 -23.5%
Operating profit (EBIT)   516 1,053 -51.0%
Profit for the period   297 703 -57.8%
 Incl. attributable to owners of the parent company   310 728 -57.4%
Earnings per share (EPS) (euros)   0.02 0.04 -57.4%

The total operating expenses for the reporting quarter were 30.3 (Q1 2020: 33.9) million euros. The majority of the 10.7% decrease in expenses was due to a decrease in the cost of sales: 3.2 million euros year-on-year. Labour costs increased year-on-year, amounting to 7.3 (Q1 2020: 6.6) million euros. The increase in labour costs and average remuneration was affected most by the increase of the proportion of Swedish employees in the Group, since wage levels are significantly higher in Scandinavian countries than they are in Estonian and Lithuanian companies.

The consolidated gross profit for the reporting quarter was 3,844 (Q1 2020: 4,923) thousand euros and the gross profit margin was 12.5% (Q1 2020: 14.1%). Quarterly consolidated operating profit (EBIT) amounted to 516 (Q1 2020: 1,053) thousand euros. The operating margin for the first quarter was 1.7% (Q1 2020: 3.0%).

The consolidated net profit for the reporting quarter was 297 (Q1 2020: 703) thousand euros of which the share of the owners of the parent company was 310 (Q1 2020: 728) thousand euros. The earnings per share were 0.02 (Q1 2020: 0.04) euros. The lower profitability was a result of increased labour costs, setback on revenue and a sharp increase in the price of raw materials.

Core Business and Markets

The Group's core business, Production, accounted for 89% of the Group's consolidated revenue. Beginning with new orders, the usual seasonality and the low availability of raw materials decreased the revenue of the production segment by 4.1 million to 27.2 million euros on a year-on year.

The largest target markets of the Group are Estonia, Finland, Sweden, and Norway, which is why the sales volumes of the Group are strongly affected by the events happening in these markets. Quarterly sales to the Estonian market increased by 1.5 million to 5.1 million euros in a year-on-year comparison. During the reporting quarter the Group continued the production and delivery of prefabricated substations that began in Q2 2020 in the Elektrilevi OÜ framework procurement.

Sales to the Finnish market decreased by 4.9 million to 14.6 million euros in a quarterly comparison and were most affected by the decrease in orders caused by the snowy and cold winter, commencing with new long-term orders, but also some supply difficulties and shortage in materials. In the reporting quarter, 47.5% (Q1 2020: 55.6%) of the Group's products and services were sold to the Group's largest market, Finland.

In comparison with the reporting quarters, the revenue earned from the Swedish market increased by 0.4 million to 5.3 million euros. Sweden accounted for 17.4% (Q1 2020: 14.3%) of consolidated revenue in the reporting quarter, being the second largest market.

Norway ranks fourth in the Group's markets, accounting for 6.1% of the Group's first quarter revenue. In the first quarter, the Group's products, and services worth 1.9 million euros were sold to the Norwegian market, which is 3.6 million less than in the same period of the previous year. The decrease in Norwegian revenue was caused by record high orders in the reference period.


During the first quarter, the Group invested a total of 2.1 (Q1 2020: 1.1) million euros in non-current assets, incl 2.0 (Q1 2020: 0.4) million euros in property, plant, and equipment and 0.07 (Q1 2020: 0.03) million euros in intangible assets. In the reporting quarter, the construction of the fourth stage of the expansion of the production and office building in Lithuania continued. The extension was completed in mid-April. In addition, investments were made in the production technology.


The company's share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 8.3 euros. As of 31 March 2021, AS Harju Elekter had 7,387 shareholders. The number of shareholders increased during the reporting quarter by 2,303.


EUR'000 31 March 2021 31 December 2020    
Current assets        
Cash and cash equivalents 2,614 2,843    
Trade and other receivables 26,663 27,226    
Prepayments 1,454 820    
Inventories 21,104 18,856    
Total current assets 51,835 49,745    
Non-current assets        
Deferred income tax assets 569 514    
Non-current financial investments 12,373 11,918    
Investment properties 23,375 23,605    
Property. plant and equipment 24,068 22,494    
Intangible assets 7,186 7,199    
Total non-current assets 65,571 65,730    
TOTAL ASSETS 119,406 115,475    
Borrowings 11,317 12,056    
Prepayments from customers 2,760 4,182    
Trade and other payables 20,703 15,837    
Tax liabilities     2,454 2,871    
Current provisions 35 34    
Total current liabilities 37,269 34,980    
Borrowings 7,921 7,032    
Other non-current liabilities 65 66    
Total non-current liabilities 7,986 7,098    
TOTAL LIABILITIES 45,255 42,078    
Share capital 11,176 11,176    
Share premium 804 804    
Reserves 7,123 6,709    
Retained earnings 55,211 54,858    
Total equity attributable to the owners of the parent company 74,314 73,547    
Non-controlling interests -163 -150    
Total equity 74,151 73,397    
EUR'000 Q1 Q1  
  2021 2020  
Revenue 30,717 34,998  
Cost of sales -26,873 -30,075  
Gross profit 3,844 4,923  
Distribution costs -1,214 -1,308  
Administrative expenses -2,217 -2,561  
Other income 172 52  
Other expenses -69 -53  
Operating profit 516 1 053  
Finance income 17 37  
Finance costs -98 -102  
Profit before tax 435 988  
Income tax -138 -285  
Profit for the period 297 703  
Profit attributable to:      
    Owners of the parent company 310 728  
    Non-controlling interests -13 -25  
Earnings per share      
   Basic earnings per share (EUR) 0.02 0.04  
   Diluted earnings per share (EUR) 0.02 0.04  


Tiit Atso
Chairman of the Board
+372 674 7400

Interim Report Q1_2021.pdf