Harju Elekter Group financial results, 1-3/2022

The year began for Harju Elekter on an optimistic note with a record order book, the possible stabilisation of material prices, and price negotiations for framework agreements. Nevertheless, the quarter was a difficult one and successive global challenges caused an adverse effect on the first-quarter results of Harju Elekter. The war does not have a direct impact on the operations of Harju Elekter, as our target markets have always been the Nordic and the Western European countries. At the same time, we can see indirect effects. Rising energy prices, continuing increases in material and key component prices, supply chain disruptions and rising inflation as a result of the ongoing crises in the world, are all factors that are inevitably having an impact on the company’s profitability. Despite strong sales growth, the quarter ended with a loss. We could not fill orders with enough efficiency nor pass the increase in material prices fully to the customers. In order to keep the production units running steadily, to increase the lower-than-expected security of supply in the first quarter and to prepare for the fulfilment of record orders for the full year, the Group is committed to maintaining higher material stocks and entering into larger-scale agreements with suppliers in the coming periods.

Revenue, Expenses, and Profit

The consolidated revenue for the first quarter of 2022 was 37.3 (Q1 2021: 30.7) million euros, which increased by 21.5% compared to the comparable period. At the same time, revenue increased in all of the Group’s largest target markets: Estonia, Finland, Sweden and Norway. The growth was ensured by long-term and large-scale contracts concluded at the beginning of last year.

EUR’000   3 months 3 months +/-
    2022 2021  
Revenue   37,321 30,717 21.5%
Gross profit   2,986 3,844 22.3%
EBITDA   -68 1,485 104.6%
Operating profit/loss (-) (EBIT)   -1,125 516 318.0%
Profit/loss (-) for the period   -1,294 297 535.7%
Incl. attributable to owners of the parent company   -1,308 310 521.9%
Earnings per share (EPS) (euros)   -0.07 0.02 450.0%

The total operating expenses for the reporting quarter were 38.4 (Q1 2021: 30.3) million euros. The majority of the 26.6% increase in operating expenses was due to an increase in the cost of sales: 7.5 million euros year on year. The increased costs of goods and services sold exceeded the growth rate of revenue by 6.3 percentage points. The Group’s distribution costs increased by 0.1 million euros to 1.4 million euros, accounting for 3.5% of the Group’s operating expenses and 3.6% of revenue. Administrative expenses increased by 0.4 million to 2.7 million euros, accounting for 7.0% of the Group’s operating expenses and 7.1% of revenue for the reporting quarter. However, the increase in distribution and administrative expenses was lower than the increase in revenue. Labour costs increased with quarterly comparison, amounting to 8.7 (Q1 2021: 7.3). A majority of the growth in labour costs and average wages was attributed to the significant increase in staff and wage pressure due to labour shortages in all markets.

The gross profit for the Q1 was 2,986 (Q1 2021: 3,844) thousand euros and the gross profit margin was 8.0% (Q1 2021: 12.5%). The consolidated operating loss (EBIT) was -1,125 (Q1 2021: operating profit 516) thousand euros. The operating margin for the first quarter was -3.0% (Q1 2021: 1.7%). The net loss for the Q1 was -1294 (Q1 2021: net profit 297) thousand euros of which the share of the owners of the parent company was -1308 (Q1 2021: 310) thousand euros. The earnings per share were -0.07 euros in the first quarter.

Core Business and Markets

The Group’s core business, production, accounted for 87.7% of the Group’s consolidated revenue. Thanks to the growth in sales volumes of companies manufacturing electrical equipment, the sales volume of the production segment increased by 20.3% to 32.7 million euros in the reporting quarter.

Sales to the Estonian market increased by 36.1% to 6.9 (Q1 2021: 5.1) million euros year-on-year. The increase was mainly due to the increase in sales of hermetic distribution transformers and distribution cabinets. The Estonian market accounted for 18.5% (Q1 2021: 16.5%) of the consolidated revenue in the reporting quarter.

The Finnish market generated revenue of 16.7 (Q1 2021: 14.6) million euros. The majority of the sales volume in the reporting quarter consisted of the sale of substations to Finnish electricity network companies. The planned sales volume of project sales in the reporting quarter was not achieved due to some component shortages and production stoppages caused by illness. During the reporting year, 44.7% (Q1 2021: 47,5%) of the Group’s products and services were sold to the Group’s largest market, Finland.

Sales to the Swedish market increased by 9% compared to the reporting quarters, amounting to 5.8 (Q1 2021: 5.3) million euros. Operating volumes have stabilised; targeted work continued. Sweden accounted for 15.6% (Q1 2021: 17.4%) of consolidated revenue in the reporting quarter, this time remaining the third largest market.

During the quarter, the Group’s products and services worth 4.5 (Q1 2021: 1.9) million euros were sold to the Norwegian market, which was 141.2% more than in the same period of the previous year. The change in revenue is due to the low order volume in the comparison period. Looking at the longer term, it can be stated that the order volumes of the shipping sector have returned to the average level. The Norwegian market accounted for 12.1% (Q1 2021: 6.1%) of quarterly sales.


During the first quarter, the Group invested a total of 1.5 (Q1 2021: 2.1) million euros in non-current assets, incl 1.0 million euros in investment properties, 0.4 (Q1 2021: 2.0) million euros in property, plant, and equipment and 0.1 (Q1 2021: 0.1) million euros in intangible assets. Most of the investments during the reporting period were directed to the construction of the Laohotell III production and warehouse complex, in the Allika Industrial Park, and to production technology equipment.

Non-current financial investments increased by 0.8 million euros to 24.4 million euros during the reporting period. The main changes were the partial sale of securities and the decrease in the fair value of 0.5 million euros in the first quarter. A total of 665 thousand euros was received from the partial sale of listed securities in the reporting quarter, of which the realized profit was 0.2 million euros. In the comparable period, 0.2 million euros were received from the sale of listed securities, of which the realized profit was 43 thousand euros. In the reporting quarter, Harju Elekter Oy increased its holding in technology company IGL-Technologies Oy from 5,5% to 10%.


The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 6.92 euros. As of 31 March 2021, AS Harju Elekter had 9,745 shareholders. The number of shareholders increased during the reporting quarter by 358.

EUR’000 31 March 2022 31 December 2021    
Current assets        
Cash and cash equivalents 286 574    
Trade and other receivables 35,663 33,689    
Prepayments 3,119 1,844    
Inventories 37,692 27,437    
Total current assets 76,760 63,544    
Non-current assets        
Deferred income tax assets 776 690    
Non-current financial investments 24,410 25,222    
Investment properties 24,603 23,903    
Property, plant and equipment 26,303 26,654    
Intangible assets 7,659 7,544    
Total non-current assets 83,751 84,013    
TOTAL ASSETS 160,511 147,557    
Borrowings 21,354 16,912    
Prepayments from customers 6,681 4,659    
Trade and other payables 31,063 24,490    
Tax liabilities 3,663 3,156    
Current provisions 51 35    
Total current liabilities 62,812 49,252    
Borrowings 12,401 11,426    
Other non-current liabilities 33 33    
Total non-current liabilities 12,434 11,459    
TOTAL LIABILITIES 75,246 60,711    
Share capital 11,352 11,352    
Share premium 1,601 1,601    
Reserves 18,278 18,716    
Retained earnings 54 158 55 315    
Total equity attributable to the owners of the parent company 85,389 86,984    
Non-controlling interests -124 -138    
Total equity 85,265 86,846    

EUR’000 3 months 3 months      
  2022 2021      
Revenue 37,321 30,717      
Cost of sales -34,335 -26,873      
Gross profit 2,986 3,844      
Distribution costs -1,350 -1,214      
Administrative expenses -2,665 -2,217      
Other income 56 172      
Other expenses -152 -69      
Operating profit/loss (-) -1,125 516      
Finance income 39 17      
Finance costs -119 -98      
Profit/loss (-) before tax -1,205 435      
Income tax -89 -138      
Profit/loss (-) for the period -1,294 297      
Profit/loss (-) attributable to:          
     Owners of the parent company -1,308 310      
     Non-controlling interests 14 -13      
Earnings per share          
   Basic earnings per share (EUR) -0.07 0.02      
   Diluted earnings per share (EUR) -0.07 0.02      

EUR’000 3 kuud 3 kuud      
  2022 2021      
Profit/loss (-) for the period -1,294 297      
Other comprehensive income          
Items that may be reclassified to profit or loss          
    Impact of exchange rate changes of a foreign subsidiaries 20 -23      
Items that will not be reclassified to profit or loss          
    Gain on sales of financial assets 151 43      
    Net gain/loss (-) on revaluation of financial assets -521 365      
Total comprehensive income for the period -350 385      
Other comprehensive income -1,644 682      
Total comprehensive income attributable to:          
     Owners of the Company -1,658 695      
     Non-controlling interests 14 -13      

Tiit Atso
Chairman of the Board
+372 674 7400