Published: 2021-07-28 07:00:00 CEST
Harju Elekter
Half Year financial report

Harju Elekter Group consolidated financial results, 1-6/2021

The second quarter of Harju Elekter can be characterised by forward-looking investments and the intensification of the global raw material deficit, which has an impact on the Group’s financial results and profitability. Execution of orders for new framework contracts has begun, and sales volumes in Estonia and Sweden are on an upward trend. Orders for the Lithuanian unit have not yet returned to pre-crisis levels, but the number of incoming inquiries has grown to a record high, giving reason to hope for a recovery in the maritime industry in the near future. In the second quarter, the Group established a forward-looking cooperation with the technology company IGL-Technologies Oy and continued to invest in Skeleton Technologies Group OÜ. Preparations were also made for the construction of the new production and storage complex and for increasing the portfolio of solar power plants.

Revenue, Expenses, and Profit

The revenue of the Group was 36.3 million euros in the second quarter, which was 2.7 million euros more modest compared to the second quarter of 2020. As in the first quarter, revenue from the manufacturing and sales of electrical equipment in the second quarter was affected by deferred orders, supply difficulties and material shortages. In the first six months, the revenue was 67.0 (6M 2020: 74.0) million euros, which is below the record result of the previous year but is comparable to the normal sales two years ago before the crisis. Despite the uncertainty in the economic environment, the volume of new orders and cooperation with important customers with framework agreements have persisted.

EUR’000   Q2 Q2 +/- 6M 6M +/-
    2021 2020 Q2/Q2 2021 2020 6M/6M
Revenue   36,310 39,014 -6.9% 67,028 74,012 -9.4%
Gross profit   4,306 5,468 -21.3% 8,151 10,391 -21.6%
EBITDA   1,638 3,084 -46.9% 3,124 5,027 -37.9%
Operating profit (EBIT)   651 2,156 -69.8% 1,168 3,209 -63.6%
Profit for the period   488 1,971 -75.2% 785 2,674 -70.6%
Incl. attributable to owners of the parent company   485 1,979 -75.5% 795 2,708 -70.6%
Earnings per share (euros)   0.03 0.11 -75.5% 0.04 0.15 -70.6%

The total operating expenses for the reporting quarter were 35.8 (Q2 2020: 37.1) million euros. Costs of sales decreased by 1.5 million euros to 32.0 million euros year-on-year, accounting for 89.5% of the operating expenses. Labour costs increased with quarterly and half-year comparison, amounting to 7.6 (Q2 2020: 6.7) and 14.9 (6M 2020: 13.4) million euros, respectively. The majority of the increase in labour costs was due to the increase in additional work, the constant readiness to continue the production cycle, and in terms of Lithuania, working in several shifts in production as a measure to prevent the spread of coronavirus. The increase in labour costs and average remuneration was affected most by the increase of the proportion of Swedish and Finnish employees in the Group, since wage levels are significantly higher in Scandinavian countries than they are in Estonia and Lithuania.

The gross profit for the reporting quarter was 4,306 (Q2 2020: 5,468) thousand euros and the gross profit margin was 11.9% (Q2 2020: 14.0%). Quarterly operating profit (EBIT) amounted to 651 (Q2 2020: 2,156) thousand euros. The operating margin for the second quarter was 1.8% (Q2 2020: 5.5%).

The net profit for the reporting quarter was 488 (Q2 2020: 1,971) thousand euros of which the share of the owners of the parent company was 485 (Q2 2020: 1,979) thousand euros. The earnings per share were 0.03 (Q2 2020: 0.11) euros. Compared to the previous year, the low profitability of the reporting period was mainly affected by lower-than-planned sales, the continuing global shortage of materials, and the increase in labour costs. The rapid rise in the price of production materials and the difficulty of accessing them caused inefficiencies in operations where the products could not be manufactured according to the planned time.

Core Business and Markets

The Group's core business, Production, accounted for 88% of the Group's six months revenue. Delays in beginning with new framework contract orders, the postponement of planned volumes and limited availability of raw materials reduced the revenue of the production segment by 1.5 million euros to 31.6 million euros on a quarterly comparison and by 4.4 million euros to 58.8 million euros on a six-month comparison.

Quarterly sales to the Estonian market increased by 1.1 million to 6.9 million euros in a year-on-year comparison and by 2.6 million euros to 12.0 million euros in six months comparison, accounting for 18% (6M 2020: 13%) of the six-month revenue. During the reporting quarter the Group continued the production and delivery of prefabricated substations that began in Q2 2020 under the Elektrilevi OÜ framework procurement.

Sales to the Finnish market are recovering. Compared to the second quarter of the previous year, the revenue decreased only by 0.6 million euros, amounting to 18.4 million euros. Compared to the first half of last year, the change is larger, revenue decreased by 5.5 million euros to 33.0 million euros. This was mostly 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 first half of the year, 49% (6M 2020: 52%) of the Group's products and services were sold to the Group's largest market, Finland.

The revenue earned from the Swedish market showed an upward trend in the reporting quarter and in the half year as compared to previous year, amounting 6.1 (Q2 2020: 5.9) and 11.5 (Q2 2020: 10.9) million euros, respectively. Sweden accounted for 17% (6M 2020: 15%) of revenue in the first half of the year, being the third largest market in the Group.

In the second quarter, the Group's products, and services worth 2.0 (Q2 2020: 4.4) million euros were sold to the Norwegian market. In the first six months, 3.9 million euros were earned from the Norwegian market, which was 60.5% or 5.9 million euros less than in the same period of the previous year. The decrease in Norwegian revenue was due to record high orders in the reference period, as well as the slow pace of recovery in the maritime industry. The Norwegian market accounted for 6% (6M 2020: 13%) of the six-month revenue.


During the reporting period, the Group invested a total of 3.9 (6M 2020: 2.2) million euros in non-current assets, incl 0.2 (6M 2020: 1.3) million euros in investment properties, 3.5 (6M 2020: 0.8) million euros in property, plant, and equipment and 0.2 (6M 2020: 0.1) million euros in intangible assets. The majority of the investments during the reporting period, i.e. 2.5 million euros, was directed to the expansion of the fourth phase of the production and office building of the Lithuanian subsidiary. The total cost of the investment was 5.5 million euros. In addition, preparations for the construction of the production and storage complex in the Allika Industrial Park, Laohotell III, were launched and investments were made in production technology.


The company's share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 8.18 euros. As at 30 June 2021, AS Harju Elekter had 7,983 shareholders. The number of shareholders increased during the reporting quarter by 596.

EUR'000 30 June

31 December 2020    
Current assets        
Cash and cash equivalents 1,576 2,843    
Trade and ohter receivables 27,215 27,226    
Prepayments 1,366 820    
Inventories 24,623 18,856    
Total current assets 54,780 49,745    
Non-current assets        
Deferred income tax assets 575 514    
Non-current financial investments 21,259 11,918    
Investment properties 23,328 23,605    
Property. plant and equipment 24,879 22,494    
Intangible assets 7,224 7,199    
Total non-current assets 77,265 65,730    
TOTAL ASSETS 132,045 115,475    
Borrowings 15,292 12,056    
Prepayments from customers 1,919 4,182    
Trade and other payables 22,208 15,837    
Tax liabilities 2,946 2,871    
Current provisions 73 34    
Total current liabilities 42,438 34,980    
Borrowings 9,469 7,032    
Other non-current liabilities 65 66    
Total non-current liabilities 9,534 7,098    
TOTAL LIABILITIES 51,972 42,078    
Share capital 11,176 11,176    
Share premium 804 804    
Reserves 15,173 6,709    
Retained earnings 53,080 54,858    
Total equity attributable to the owners of the parent company 80,233 73,547    
Non-controlling interests -160 -150    
Total equity 80,073 73,397    

EUR'000 Q2 Q2 6m 6m    
  2021 2020 2021 2020    
Revenue 36,310 39,014 67,028 74,012    
Cost of sales -32,004 -33,546 -58,877 -63,621    
Gross profit 4,306 5,468 8,151 10,391    
Distribution costs -1,315 -1,180 -2,529 -2,488    
Administrative expenses -2,437 -2,333 -4,654 -4,895    
Other income 188 275 360 327    
Other expenses -91 -74 -160 -126    
Operating profit 651 2,156 1,168 3,209    
Finance income 51 71 68 108    
Finance costs -60 -46 -158 -147    
Profit before tax 642 2,181 1,078 3,170    
Income tax -154 -210 -293 -496    
Profit for the period 488 1,971 785 2,674    
Profit attributable to:            
     Owners of the parent company 485 1,979 795 2,708    
     Non-controlling interests 3 -8 -10 -34    
Earnings per share            
    Basic earnings per share (EUR) 0.03 0.11 0.04 0.15    
    Diluted earnings per share (EUR) 0.03 0.11 0.04 0.15    

Tiit Atso
Chairman of the Board
+372 674 7400



Interim Report Q2_2021.pdf