Financial results, 1-9/2012

The Group’s financial performance during the reporting period improved compared to the reference period. During the nine months, revenue increased by 19.8%, gross profit by 18.1%, operating profit by 20.9% and net profit by 47.6%, incl. in the third quarter by 11.1%, 4.3%, 1.3% and 33.4%, respectively.

 

Key figures (EUR’000) Q3 2012 Q3 2011 9m 2012 9m 2011 2011
Sales revenue 14,486 13,035 40,236 33,574 46,674
EBITDA 1,191 1,145 2,918 2,543 3,378
Operating profit 817 806 1,822 1,506 2,025
Net profit for the current period 1,326 996 3,431 2,324 2,948
incl. equity holders of the parent 1,256 945 3,329 2,202 2,773
EPS (EUR) 0.07 0.06 0.20 0.13 0.17

In the third quarter, the Group’s consolidated revenue increased by 1.45 million euros up to 14.5 million euros and the revenue for nine months increased by more than 6 million euros, to nearly 40.2 million euros. The increase in revenue derived mainly from the principal activity, i.e. production, where the sales increased by over 1.42 million euros or 12.0% in the third quarter and by over 6.6 million euros or 21.9% within nine months. Production also contributed the largest share of revenue – 91% (9m 2011: 89.4%). From industrial products, the sale of electrical equipment grew 14.3% to 12.4 million euros and one-fourth i.e. 6.7 million euros to 33.9 million euros in 9 months, contributing 84% (9m 2011: 81%) of the Group's sales revenues.

Of the revenue of the Group, 65% was received from the foreign markets outside Estonia. 90% of the Group’s products and services were sold in the Group’s companies home markets: Estonia, Finland, Sweden, Lithuania (9m 2011: 92.6%). Domestic sale increased by 10.7% to 14.1 million euros in 9 months, amounting to 35% of the Group’s sales revenues; sales to the Finnish market increased by 28.9% to 19.3 million euros, which was 47.9% of the sales revenue of the Group. Sales to the Lithuanian market decreased by one-third in Q3 and 40% in 9 months. However, the Lithuanian company’s 9-month sales volumes in foreign markets have increased to 60% (9m 2011: 36%) of the total sales revenue of the company. Group’s export to other European Union countries has almost doubled. Germany is also a developing and continuously growing market for the Group, also have increased supplies to France and Portugal. 6.1% (9m 2011: 5.0%) of the Group’s products and services were sold outside EU, increasing by 35.7% in the reporting quarter and during the nine months by 44.5%. Supplies to Russia and Belarus have also increased; Ukraine and Switzerland were introduced as a new market.

With a strong growth of revenue, the expenditure of business activities have been increasing a little faster – in the reporting quarter by 11.7% and during nine months by 20.0%. In Q3, the Group expensed doubtful receivables in the total amount of 72,000 euros, increasing distribution costs in Q3 by 11.4% and in 9 months by 4.3% and decreasing profit margins by 0.5 percentage points in the quarter under review and 0.2 percentage points in 9 months.

In Q3 2012, the average 467 people worked in the Group − on the average by 32 persons more than in the reference period. During the first 9 months, the average number of employees increasing by 27 persons up to 451 employees. In the third quarter, employee wages and salaries totalled 2.2 (Q3 2011: 2.0) million euros and during the first 9 months 6.8 (9m 2011: 5.8) million euros. The average wages per employee per month amounted 1,683 (9m 2011: 1,519) euros. As at the balance day on 30 September, there were 479 people working in the Group, which were 24 employees more than a year before and 22 employees more than in the beginning of the year.

Operating profit of Q3 2012 was 817 (Q3 2011: 806) thousand euros and EBITDA 1.2 (Q3 2011: 1.1) million euros. Return of sales for the accounting quarter was 5.6% (Q3 2011: 6.2%) and return of sales before depreciation 8.2% (Q3 2011: 8.8%). During 9 months, EBITDA increased by 14.7% to 2.9 million euros and operating profit by 20.9% to 1.8 million euros. Return of sales before depreciation for the 9 months 2012 was 7.3% (9m 2011: 7.6%) and return of sales was 4.5%, being on the same level as in the reference period.

Net financial expenses have increased by 243,000 euros to 1.0 million euros within nine months. In Q3 2012, the Group consolidated from the associated company a profit of 561,000 (Q3 2011:291,000) euros and during the nine months 1.0 (9m 2012: 0.4) million euros.

Overall, the consolidated net profit of the Q3 2012 was 1.3 (Q3 2011: 1.0) million euros, of which the share of the owners of the parent company was 1.2 (Q3 2011: 0.9) million euros. EPS in the Q3 was 0.07 (Q3 2011: 0.06) euros. The consolidated net profit of nine months was 3.4 million euros increasing by 47.6% compared to the reference period. EPS was 0.20 (9m 2011: 0.13) euros.

Andres Allikmäe
Managing director/ CEO

For more information: Internal report 1-9/2012; Mrs Karin Padjus, FO, phone +372 674 7403

AS HARJU ELEKTER        
BALANCE SHEET, 30.09.2012        
Consolidated, unaudited        
         
Group        
in thousands EUR      
ASSETS 30.09.12 31.12.11    
Cash and cash equivalents 1 814 815    
Trade receivables and other receivables 8 089 7 848    
Prepayments 188 104    
Prepaid income tax 0 20    
Inventories 7 569 6 658    
TOTAL CURRENT ASSETS 17 660 15 445    
Deferred income tax asset 49 35    
Investments in associates 2 191 1 177    
Other long-term financial investments 19 448 16 023    
Investment property 10 552 10 833    
Property, plant and equipment 8 698 8 985    
Intangible assets 425 422    
Total non-current assets 41 363 37 475    
TOTAL ASSETS 59 023 52 920    
LIABILITIES AND OWNERS' EQUITY      
Interest-bearing loans and borrowings 147 2 245    
Trade payables and other payables 7 521 6 268    
Tax liabilities 1 225 758    
Income tax liabilities 83 29    
Short-term provision 12 17    
TOTAL CURRENT LIABILITIES 8 988 9 317    
NON-CURRENT LIABILITIES 1 630 1 569    
TOTAL LIABILITIES 10 618 10 886    
Share capital 12 180 11 760    
Paid-in capital over/under par 240 0    
Restricted reserves 19 422 15 881    
Retained earnings 14 790 12 672    
TOTAL OWNERS' EQUITY 46 632 40 313    
Non-controlling 1 773 1 721    
TOTAL EQUITY 48 405 42 034    
TOT.LIABILIT.AND OWNERS' EQUITY 59 023 52 920    
         
         
INCOME STATEMENT, 1-9/2012        
Consolidated,unaudited        
         
EUR’000        
GROUP Q3 2012 Q3 2011 1-9/2012 1-9/2011
         
NET SALES 14 486 13 035 40 236 33 574
Cost of goods sold -12 051 -10 698 -33 542 -27 907
Gross profit 2 435 2 337 6 694 5 667
Marketing expenses -759 -631 -2 113 -1 666
Administrative expenses -855 -900 -2 773 -2 461
Other revenue 8 16 48 21
Other expenses -12 -16 -34 -55
Operating profit 817 806 1 822 1 506
Net financial incomes/expenses 9 -15 1 003 760
Income from subsidiaries 561 291 1 014 400
Profit from normal operations 1 387 1 082 3 839 2 666
Corporate Income tax -61 -86 -408 -342
Profit after taxes, incl 1 326 996 3 431 2 324
Net profit for the period 1 256 945 3 329 2 202
Non-controlling interest 70 51 102 122
Basic earnings per share (EUR) 0,07 0,06 0,2 0,13
Diluted earnings per share (EUR) 0,07 0,06 0,2 0,13

Karin Padjus, FO
Phone +372 674 7403