Earnings Release • Oct 30, 2025
Earnings Release
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Harju Elekter Group financial results, 1-9/2025
Harju Elekter Group's third quarter result was strong, as is typical for the
peak season. We can be very satisfied with the record operating profit, which
exceeded the 10 million euros for the first time. The Estonian production unit
achieved strong results, but the Group's other subsidiaries are also moving in
the right direction, considering the current difficult economic situation.
Operating profitability has shown strong improvement - we have reached 8.7% for
the quarter and 8.0% for the nine-month period. These results reflect the impact
of changes made in recent years to the Group's strategy and structure and
confirm that we are moving step by step towards our set goals. At the same time,
there is still a considerable way to go before the first important goal, 10%
profitability, is achieved, which requires continued focus and purposeful
action.
To improve profitability, we will continue to implement the activities agreed
upon in the strategy in the coming years. This provides for investments in the
expansion of the Group's factories and machine park, as well as seeking
opportunities to increase production capacity outside of existing business
units. As a first step in this direction, we have decided to begin construction
of the long-planned expansion of the Keila plant. The plant is set to expand by
4,000 m2, with completion scheduled for October 2026. The return on investment
is based on the growing trend in energy consumption, which is primarily due to
the boom in the construction of network and data centres. Although Harju Elekter
Group's last quarter and the beginning of the new year have traditionally been
modest in terms of results, the record profits achieved in the first nine
months, and the accumulated reserves allow us to face the low season with
confidence and continue with our planned activities.
Revenue and financial results
The Group's revenue for the reporting quarter amounted to 43.0 (Q3 2024: 41.2)
million euros, which is 4.5% more than in the same period last year. Total
revenue for the nine-month period was 126.5 (9M 2024: 144.7) million euros,
representing a 12.6% decrease compared to the previous year. Although revenue
did not reach the record levels of the past two years, the result was stable and
comparable to the Group's traditionally successful operating years.
EUR'000 Q3 Q3 +/- 9M 9M +/-
Revenue 43,034 41,172 4.5% 126,531 144,749 -12.6%
Gross profit 7,461 6,113 22.1% 20,564 19,121 7.5%
EBITDA 4,840 3,694 31.0% 13,364 11,083 20.6%
Operating profit (EBIT) 3,759 2,710 38.7% 10,139 8,135 24.6%
Profit for the period 2,898 1,651 75.5% 8,161 5,478 49.0%
Earnings per share (EPS)
(euros) 0.16 0.09 77.8% 0.44 0.30 46.7%
The Group's operating expenses amounted to 39.4 (Q3 2024: 38.5) million euros in
the third quarter and 117.4 (9M 2024: 136.4) million euros over the nine-month
period. The majority of operating expenses consisted of the cost of sales, which
slightly increased in the reporting quarter compared to the previous year,
totaling 35.6 (Q3 2024: 35.1) million euros. Over the nine-month period, the
cost of sales decreased by 15.7%, amounting to 106.0 (9M 2024: 125.6) million
euros. The significant reduction in costs was mainly driven by lower order
volumes, optimization of production processes, and more efficient supply chain
management.
Distribution expenses increased in both comparison periods - by 0.6 million
euros in the quarter and by 0.8 million euros over the nine-month period,
totaling 1.7 and 3.4 million euros, respectively. The increase in expenses was
due to strategic investments aimed at maintaining revenue stability,
strengthening customer relationships, and securing new contracts. In contrast,
administrative expenses decreased to 2.1 (Q3 2024: 2.4) million euros in the
reporting quarter and to 7.0 (9M 2024: 7.1) million euros over the nine-month
period. Labour costs increased by 3.9% in the third quarter, reaching 8.5 (Q3
2024: 8.2) million euros. However, over the nine-month period, labour costs
decreased by 2.3%, totaling 28.1 (9M 2024: 28.8) million euros.
Although revenue was lower than in the second quarter, the gross profit level
was maintained - 7.5 (Q3 2024: 6.1) million euros. The gross margin improved to
17.3% (Q3 2024: 14.8%), supported by targeted cost management and expense
monitoring. Operating profit (EBIT) for the quarter was 3.8 (Q3 2024: 2.7)
million euros, resulting in an improvement in the operating margin to 8.7% (Q3
2024: 6.6%). Net profit for the quarter was 2.9 (Q3 2024: 1.7) million euros.
Earnings per share increased to 0.16 (Q3 2024: 0.09) euros. Gross profit
increased to 20.6 (9M 2024: 19.1) million euros and the margin improved to
16.3% (9M 2024: 13.2%), supported by a strategic focus on quality, cost-
efficiency, and stable profitability. Operating profit grew to 10.1 (9M
2024: 8.1) million euros and the operating margin improved to 8.0% (9M
2024: 5.6%). In addition to overall cost-efficiency improvements, favorable
currency exchange movements in the first quarter contributed significantly to
the result. Net profit for the nine-month period was 8.2 (9M 2024: 5.5) million
euros and earnings per share were 0.44 (9M 2024: 0.30) euros.
Core business and markets
The four largest target markets - Estonia, Finland, Sweden, and Norway -
accounted for a total of 86.8% of the Group's quarterly revenue, which is 2.5
percentage points more than a year earlier. Revenue growth was primarily driven
by the Estonian and Norwegian markets, while revenue in Finland and Sweden
declined compared to the same period last year.
The Estonian market showed strong growth both in the quarterly and nine-month
comparisons. Revenue in the reporting quarter amounted to 8.7 (Q3 2024: 6.4)
million euros, marking one of the highest quarterly results in the domestic
market. Revenue for the nine-month period reached 20.6 (9M 2024: 17.8) million
euros. The growth was mainly supported by increased delivery volumes of compact
substations to electricity distribution network customers and stable rental
income from the real estate segment.
Finland remained the Group's largest market in the reporting quarter, although
revenue declined significantly. Quarterly revenue decreased by 18.8%, amounting
to 13.7 (Q3 2024: 16.9) million euros, and by 25.8% over the nine-month period,
totaling 40.4 (9M 2024: 54.5) million euros. The decline was mainly due to lower
sales volumes of compact substations and reduced contractual manufacturing
volumes.
In the Swedish market, the decline in revenue continued, primarily due to a
strategic shift in the business model - the offering of turnkey (EPC) projects
was discontinued, and the focus shifted to standardized factory-made products
with a lower risk profile. Revenue in the quarterly comparison decreased by
26.2% and by 32.6% over the nine-month period, amounting to 4.2 (Q3 2024: 5.7)
and 14.4 (9M 2024: 21.3) million euros, respectively. Although sales volumes
declined, the changes are aimed at improving long-term profitability and risk
management.
The Norwegian market stood out with strong growth, being a clear positive
exception among the Scandinavian core markets. As a result of the successful
performance of the Group's Lithuanian subsidiary, revenue in the reporting
quarter increased by 85.7%, reaching 10.7 (Q3 2024: 5.8) million euros, and by
22.2% over the nine-month period, totaling 28.2 (9M 2024: 23.1) million euros.
Sales were primarily directed to the marine and shipping sectors.
In the German market, revenue decreased by 89.3% in the quarterly comparison,
amounting to 0.6 (Q3 2024: 5.4) million euros, due to the completion of a large
project-based order in the substation product group. However, in the nine-month
view, revenue was 4.4% higher than in the previous year, totaling 11.8 (9M
2024: 11.3) million euros. In contrast, the Netherlands market saw significant
growth - revenue increased more than tenfold in the quarterly comparison,
reaching 3.3 (Q3 2024: 0.3) and 6.7 (9M 2024: 2.8) million euros over the nine-
month period.
Investments
The Group invested a total of 2.9 (9M 2024: 2.8) million euros in non-current
assets during the reporting period, including 0.3 (9M 2024: 1.4) million euros
in investment properties, 1.2 (9M 2024: 0.7) million euros in property, plant,
and equipment, and 1.4 (9M 2024: 0.47) million euros in intangible assets. The
investments included the acquisition of production technology equipment and the
development of production and process management systems, aimed at improving
efficiency and quality. Investments also covered product development activities,
focusing on the creation of new and improved products. In addition, part of the
investments was directed towards the renovation of existing buildings.
As of the reporting date, the value of the Group's long-term financial
investments amounted to 27.2 (31.12.24: 27.7) million euros. Proceeds from the
disposal of the 9.15% stake in IGL-Technologies Oy totaled 0.9 million euros in
the reporting quarter, with a realized gain of 0.4 million euros. The gain was
recognized through other comprehensive income.
Share
The company's share price on the last trading day of the reporting quarter on
the Nasdaq Tallinn Stock Exchange closed at 4.60 euros.
CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
ASSETS
Current assets
Cash and cash equivalents 2,698 3,773 1,967
Trade and other receivables 45,350 29,606 39,555
Prepayments 1,846 2,096 905
Inventories 26,689 19,845 22,743
Non-current assets
Deferred income tax assets 529 687 724
Non-current financial investments 27,234 27,717 27,723
Investment properties 28,564 29,432 29,357
Property, plant, and equipment 32,102 32,420 32,685
Intangible assets 9,342 8,121 7,834
LIABILITIES AND EQUITY
Liabilities
Borrowings 12,857 9,885 9,738
Prepayments from customers 13,739 11,600 11,289
Trade and other payables 26,192 17,426 21,149
Tax liabilities 4,573 3,260 4,496
Current provisions 464 270 274
Borrowings 19,939 20,184 23,282
Other non-current liabilities 17 39 32
Equity
Share capital 11,672 11,655 11,655
Share premium 3,410 3,306 3,306
Reserves 22,965 23,135 23,032
Retained earnings 58,527 52,937 55,240
Total equity attributable to the owners of
the parent company 96,574 91,033 93,233
CONSOLIDATED STATEMENT OF PROFIT
AND LOSS
Unaudited
EUR '000 Q3 Q3 9M 9M
Revenue 43,034 41,172 126,531 144,749
Cost of sales -35,573 -35,059 -105,967 -125,628
Gross profit 7,461 6,113 20,564 19,121
Distribution costs -1,748 -1,118 -4,429 -3,642
Administrative expenses -2,062 -2,352 -7,007 -7,096
Other income 145 93 1,175 188
Other expenses -37 -26 -164 -436
Operating profit 3,759 2,710 10,139 8,135
Finance income 226 6 1,125 110
Finance costs -392 -691 -1,743 -1,823
Profit before tax 3,593 2,025 9,521 6,422
Income tax -695 -374 -1,360 -944
Earnings per share
Basic earnings per share (euros) 0.16 0.09 0.44 0.30
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
EUR '000 Q3 Q3 9M 9M
Profit for the period 2,898 1,651 8,161 5,478
-----------------------------
Other comprehensive income
Items that may be reclassified to profit or
loss
Impact of exchange rate changes of a
foreign subsidiaries -9 -50 -376 11
Items that will not be reclassified to profit
or loss
Gain on sales of financial assets 0 0 385 185
Net gain on revaluation of financial
assets 14 6 8 -66
Total comprehensive income (- loss) for the
period 5 -44 17 130
Priit Treial
CFO and Member of the Management Board
[email protected] (mailto:[email protected])
+372 674 7400
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