Harju Elekter Group financial results, 1-3/2025

Harju  Elekter's revenue for the first  quarter was 37.4 million euros, which is
20% less  than in the same period last  year. At the same time, operating profit
was  2.8 million euros,  which is  186% more than  in the comparable period. The
improvement  in operating profit was  driven by a number  of targeted actions to
improve low season profitability, including lower than usual labour costs in the
first quarter.

At  the same time, net profit was  2.6 million euros, which is 630% more than in
the  comparable period.  The result  was impacted  significantly by  the notable
change  in the EUR/SEK exchange rate towards  the stronger Swedish krona and the
resulting revaluation of receivables and liabilities.

Although the Group's financial results showed signs of improvement, the economic
environment  is  once  again  full  of  challenges.  This  will be influenced by
internal political developments in the countries in which we operate, as well as
by  the overall  transformation of  world politics.  Controversial news from the
United  States and frequent changes  of direction increase customer uncertainty,
resulting  in many orders being  delayed or temporarily put  on hold. The Baltic
and Scandinavian economies have not yet returned to stable growth, while the tax
burden is increasing, and wages are rising.

Despite  the turbulent times,  we are going  into the peak  season with a strong
order book. Restructuring and organisational changes in recent years have helped
to  set the cost base, both in terms  of overhead and labour costs, in line with
expected  volumes, while at the same time striving to maintain competence in low
seasons.

2025 has  the potential to be a strong financial year, which in turn will enable
the  continuation of the development strategy  and support sustainable growth in
the coming periods.


 Revenue and financial results

Although  the decline  in first  quarter revenue  compared to last year's record
sales volumes is noticeable, seasonality in turnover remained at a similar level
to  before  the  period  of  exceptional  results.  The revenue from the sale of
electrical  equipment amounted to 34.1 million euros in the quarter, or 91.1% of
total  revenue, decreasing by  21.6% compared to the  same period last year. The
main  product  and  service  groups  continued  to  be  substations, low-voltage
distribution  equipment, technical buildings, and subcontracting and engineering
services.

  Key indicators                                     3M       3M    +/-


  (EUR´000)
                                                   2025     2024
--------------------------------------------------------------------------
  Revenue                                        37,427   46,775   -20.0%

  Gross profit                                    5,667    4,836    17.2%

  EBITDA                                          3,866    1,941    99.2%

  Operating profit (EBIT)                         2,795      976   186.4%

  Profit for the period                           2,636      361   630.2%

  Earnings per share (EPS) (euros)                 0.14     0.02   600.0%
--------------------------------------------------------------------------

Operating  expenses  for  the  reporting  quarter  totaled 35.6 (Q1 2024: 45.7)
million  euros,  which  is  22% less  than  the  previous  year. The decrease in
expenses  was  mainly  due  to  the  cost  of  sales,  which  fell  to  31.8 (Q1
2024: 41.9) million  euros,  a  reduction  of  24.3%. This  was achieved through
adjustments  in production  volumes and  better cost  management regarding input
prices  and supply solutions. Distribution costs were 1.3 (Q1 2024: 1.2) million
euros, accounting for 3.6% (Q1 2024: 2.6%) of the Group's operating expenses and
3.4% (Q1  2024: 2.6%) of revenue.  The increase  in costs  has been necessary to
maintain  revenue, strengthen customer relationships,  and secure new contracts.
Administrative  expenses were  2.6 (Q1 2024: 2.5) million  euros, accounting for
7.2% (Q1 2024: 5.5%) of the Group's operating expenses for the reporting quarter
and 6.9% (Q1 2024: 5.4%) of revenue.

Depreciation  expenses for  fixed assets  amounted to 1.1 (Q1 2024: 1.0) million
euros  in the quarter. A  slight increase in costs  was expected, reflecting the
continued impact of previous investments. Labour costs for the quarter were 9.5
(Q1  2024: 10.1) million euros, which is 5.2% less than a year earlier. The cost
savings resulted from adjustments in the number of employees in production units
in  Estonia,  Finland,  and  Lithuania.  However,  the  share of labour costs in
revenue increased to 25.5% (Q1 2024: 21.5%).

The gross profit for the first quarter was 5.7 (Q1 2024: 4.8) million euros,
with a gross profit margin of 15.1% (Q1 2024: 10.3%). Operating profit (EBIT)
was 2.8 (Q1 2024: 1.0) million euros, and the operating margin was 7.5% (Q1
2024: 2.1%). Net profit for the first quarter was 2.6 (Q1 2024: 0.4) million
euros. Earnings per share for the first quarter were 0.14 (Q1 2024: 0.02) euros.

Core business and markets

The  Group's  revenue  for  the  first  quarter of 2025 by markets reflected the
overall downward trend in most key markets compared to the same period in 2024.
The Group's four largest target markets - Estonia, Finland, Sweden, and Norway -
accounted  for  a  total  of  79% of  the  total  quarterly revenue, which is 2
percentage points less than a year earlier.

In  Estonia, revenue reached 4.8 (Q1  2024: 4.5) million euros, growing by 7.4%
and accounting for 12.8% (Q1 2024: 9.6%) of the Group's total quarterly revenue.
Sales  were  supported  by  an  increase  in orders for compact substations from
electricity  distribution network  customers. Rental  income in  the real estate
segment remained at the same level as the previous year.

The  Finnish market continued  to be the  largest for the  Group in the quarter,
despite  revenues decreasing by 24.1% to 12.9 (Q1 2024: 17.0) million euros. The
main  reason for the decline was the decrease in the sale of compact substations
and the decline in contractual manufacturing volumes.

Revenue  in  the  Norwegian  market  fell  to  6.9 (Q1 2024: 9.3) million euros,
decreasing by 26.2% compared to the previous year. The decline was mainly due to
the  high comparison  base from  the previous  year, when  Norwegian revenue was
significantly  higher.  The  market  downturn  also  contributed to the decline,
resulting  in smaller  contractual manufacturing  new order  volumes in 2024 for
2025.

Revenue  in the Swedish market  decreased by 28.5%, reaching 4.9 (Q1 2024: 6.9)
million euros, which was similar to the level of the fourth quarter of 2024. The
decline  was influenced by  a business model  change, where the  offering of EPC
(Turnkey  solutions)  projects  was  discontinued.  Now focusing on factory-made
solutions,  sales volume is temporarily smaller,  but the company's risk profile
is more stable.

As a significant positive change, the Germany market grew, with revenue tripling
due  to increased project-based orders in the substation product group, reaching
6.5 (Q1 2024: 2.2) million euros.

Investments

The  Group invested a  total of 0.8 (Q1  2024: 0.7) million euros in non-current
assets  during the reporting period,  including 0.1 (Q1 2024: 0.4) million euros
in  investment properties, 0.3 (Q1 2024: 0.1) million  euros in property, plant,
and  equipment, and 0.4 (Q1 2024: 0.2) million euros in intangible fixed assets.
Investments  included the  acquisition of  production technology  assets and the
development  of  production  and  process  management  systems. Investments also
included product development.

The  value of  the Group's  long-term financial  investments was 27.7 (31.12.24:
27.7) million  euros as of the reporting date. During the reporting quarter, the
fair  value of remaining  securities decreased by  5 thousand euros and proceeds
from the sale of listed securities amounted to 17 thousand euros.

Share

The  company's share price on  the last trading day  of the reporting quarter on
the Nasdaq Tallinn Stock Exchange closed at 4.67 euros.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Unaudited


 (EUR´000)                                                31.03.2025 31.12.2024
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                                     1,556      3,773

 Trade and other receivables                                  38,351     29,606

 Prepayments                                                   2,270      2,096

 Inventories                                                  27,308     19,845

 Total current assets                                         69,485     55,320

 Non-current assets

 Deferred income tax assets                                      597        687

 Non-current financial investments                            27,708     27,717

 Investment properties                                        29,198     29,432

 Property, plant, and equipment                               32,706     32,420

 Intangible assets                                             8,429      8,121

 Total non-current assets                                     98,638     98,377



 TOTAL ASSETS                                                168,123    153,697
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 LIABILITIES AND EQUITY

 Liabilities

 Borrowings                                                   10,500      9,839

 Prepayments from customers                                   13,181     11,600

 Trade and other payables                                     26,657     17,472

 Tax liabilities                                               3,887      3,260

 Current provisions                                              588        270

 Total current liabilities                                    54,813     42,441

 Borrowings                                                   20,183     20,184

 Other non-current liabilities                                    40         39

 Total non-current liabilities                                20,223     20,223

 Total liabilities                                            75,036     62,664



 Equity

 Share capital                                                11,655     11,655

 Share premium                                                 3,306      3,306

 Reserves                                                     22,734     23,135

 Retained earnings                                            55,392     52,937

 Total equity attributable to the owners of the parent
 company                                                      93,087     91,033



 TOTAL LIABILITIES AND EQUITY                                168,123    153,697
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  CONSOLIDATED STATEMENT OF PROFIT AND LOSS


  (EUR´000)
                                           3M 2025   3M 2024
-------------------------------------------------------------
  Revenue                                   37,427    46,775

  Cost of sales                            -31,760   -41,939

  Gross profit                               5,667     4,836

  Distribution costs                        -1,285    -1,195

  Administrative expenses                   -2,580    -2,517

  Other income                               1,024        19

  Other expenses                               -31      -167

  Operating profit                           2,795       976

  Finance income                               633        92

  Finance costs                               -284      -590

  Profit before tax                          3,144       478

  Income tax                                  -508      -117

  Profit for the period                      2,636       361
-------------------------------------------------------------
  Earnings per share

  Basic earnings per share (euros)            0.14      0.02

  Diluted earnings per share (euros)          0.14      0.02
-------------------------------------------------------------

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


  (EUR´000)                                                     3M 2025 3M 2024
----------------------------------------------------------------       --------
 Profit for the period                                            2,636     361

 Other comprehensive income

 Items that may be reclassified to profit or loss

     Impact of exchange rate changes of a foreign
 subsidiaries                                                      -588     106

 Items that will not be reclassified to profit or loss

 Revaluation of financial assets                                     -5      70

 Total comprehensive income (-loss) for the period                 -593     176

 Other comprehensive income                                       2,043     537
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Priit Treial
CFO and Member of the Management Board
+372 674 7400

[email protected] (mailto:[email protected])