Harju Elekter Group financial results, 1-6/2025
The second quarter and first half of 2025 were successful for the Harju Elekter
in terms of results. Although we have seen a decline in revenue compared to
previous periods, we have continued to improve profitability - a long-term
strategic goal of the Group.
The Estonian production unit delivered the strongest performance in the first
half-year, supported by continued high demand for substation solutions for
distribution networks as well as for more complex E-house type solutions used in
data centres. A notable result was also achieved by the Finnish subsidiary
Telesilta OY, which specializes in the design and installation of electrical
solutions for the shipbuilding industry.
While the results of the Lithuanian, Finnish, and Swedish production units were
more modest, the growth in order books in these units indicates increased
customer interest and readiness to launch new projects - a development expected
to have a positive impact in the second half of the year and into 2026. Although
interest in industrial automation and energy efficiency solutions has remained
stable or grown, the industrial sector as a whole remains under pressure -
primarily due to high input prices and weak export performance, both of which
continue to affect our key target markets where investment activity has been
cautious.
Overall, we expect strong financial results for the full year 2025. This outlook
is supported by declining interest rates, which have improved the investment
climate and contributed to a more active economic environment.
In April, AS Harju Elekter Group's Finnish subsidiary Harju Elekter OY exited a
financial investment by divesting a 9.15% stake in IGL Technologies OY, a
leading Finnish developer and operator of parking and e-mobility solutions. This
move aligns with the Group's strategy to focus on core operations and direct
more resources toward product development and innovation - particularly the
development of next-generation chargers that meet the growing demand for
sustainable and smart energy solutions.
Revenue and financial results
The Group's revenue decreased by 19% compared to the same period last year -
both in quarterly and half-year comparisons. The revenue for the reporting
quarter was 46.1 (Q2 2024: 56.8) million euros, and total revenue for the first
half of the year was 83.5 (6M 2024: 103.6) million euros. Although the decline
was noticeable compared to the record sales volumes of the past two years, the
revenue remained at a good level considering seasonality and is comparable to
the more stable in earlier years.
------------------------------------------------------------------------------
EUR'000 Q2 Q2 +/- 6M 6M +/-
2025 2024 2025 2024
------------------------------------------------------------------------------
Revenue 46,071 56,801 -18.9% 83,497 103,577 -19.4%
Gross profit 7,436 8,172 -9.0% 13,103 13,008 0.7%
EBITDA 4,658 5,450 -14.5% 8,524 7,389 15.3%
Operating profit (EBIT) 3,585 4,450 -19.4% 6,380 5,425 17.6%
Profit for the period 2,628 3,467 -24.2% 5,263 3,827 37.5%
Earnings per share (EPS) (euros) 0.14 0.19 -26.3% 0.28 0.21 33.3%
------------------------------------------------------------------------------
In the second quarter, the Group continued to adjust its cost structure in line
with changes in order volumes and market conditions. Total operating expenses
decreased by 18.8% compared to the same period in the previous year, amounting
to 42.4 (Q2 2024: 52.2) million euros. A similar reduction continued in the six-
month comparison, where total expenses fell by 20.3%, reaching 78.0 (6M
2024: 97.8) million euros.
Distribution and administrative expenses increased slightly in both the second
quarter and the first half-year - each by 0.1 million euros on a quarterly
basis, reaching 2.4 and 1.4 million euros respectively, and by 0.2 million euros
over six months, totaling 2.7 and 4.9 million euros. This increase was necessary
to support revenue stability, strengthen customer relationships, and secure new
contracts. Labour costs decreased by 0.5 million euros in the second quarter,
amounting to 10.1 million euros. Over the six-month period, labour costs
declined by 1.0 million euros to 19.6 million euros. The savings primarily
resulted from a reduced headcount in Finland and Lithuania. Despite the nominal
decrease, the share of labour costs in revenue increased by 3.4 percentage
points to 22.0% in the quarter, as the decline in revenue exceeded the reduction
in labour costs.
In the second quarter, gross profit decreased to 7.4 (Q2 2024: 8.2) million
euros, but the gross margin improved to 16.1% (Q2 2024: 14.4%). The improvement
in the margin was supported by more efficient cost control. Operating profit
(EBIT) for the quarter was 3.6 (Q2 2024: 4.4) million euros, and the operating
margin remained at the same level as in the same period last year - 7.8% (Q2
2024: 7.8%). Net profit was 2.6 (Q2 2024: 3.5) million euros, being close to the
result of the first quarter. Despite the decline in sales in the first half of
the year, gross profit remained stable at 13.1 (6M 2024: 13.0) million euros and
the margin improved to 15.7% (6M 2024: 12.6%). Operating profit grew to 6.4 (6M
2024: 5.4) million euros and the operating margin increased to 7.6% (6M
2024: 5.2%). In addition to improved cost-efficiency, favorable currency
exchange movements in the first quarter contributed significantly to the result.
Net profit for the six-month period was 5.3 (6M 2024: 3.8) million euros.
Core business and markets
The Group's revenue for the second quarter and first half of 2025 reflected a
continued downward trend in the Scandinavian core markets compared to the same
period in the previous year. The four largest target markets - Estonia, Finland,
Sweden, and Norway - accounted for a total of 80% of the Group's quarterly
revenue. Of these, revenue increased in Norway and moderately also in Estonia.
In Estonia, revenue reached 7.0 (Q2 2024: 6.9) million euros in the reporting
quarter, marking the highest second-quarter result on the home market to date.
Revenue for the first half of the year amounted to 11.8 (6M 2024: 11.4) million
euros. The growth was primarily supported by the volume of compact substation
orders from electricity distribution network customers, as well as stable rental
income from the real estate segment.
Finland remained the largest market in the quarter; however, it also experienced
the most significant decline - quarterly revenue decreased by 32.9%, and in the
half-year view, by 28.9%. Revenue amounted to 13.8 (Q2 2024: 20.6) million euros
in the quarter and 26.7 (6M 2024: 37.5) million euros for the half-year. The
main reasons for the decline were the lower sales volume of compact substations
and the reduction in contractual manufacturing volumes.
Revenue in the Swedish market also declined - by 40.0% in the quarterly
comparison and by 34.9% in the half-year view. Revenue amounted to 5.2 (Q2
2024: 8.7) million euros in the quarter and 10.2 (6M 2024: 15.6) million euros
in the six-month period. The decline was a result of a strategic shift in the
business model - the offering of turnkey (EPC) projects was discontinued, and
the focus shifted to standardized factory-made products. This led to a temporary
reduction in volume but helped reduce business risks.
Norway stood out among the Scandinavian markets with positive growth: quarterly
revenue increased by 33%, reaching 10.6 (Q2 2024: 8.0) million euros. For the
first half of the year, revenue was 17.5 (6M 2024: 17.3) million euros,
remaining essentially on the same level as the previous year. The difference in
the quarterly comparison was mainly due to the fact that part of the orders
signed in 2024 were realized in the second quarter of 2025, resulting in a more
modest revenue figure in the first quarter.
Investments
The Group invested a total of 1.9 (6M 2024: 1.5) million euros in non-current
assets during the reporting period, including 0.2 (6M 2024: 0.7) million euros
in investment properties, 0.8 (6M 2024: 0.4) million euros in property, plant,
and equipment, and 0.9 (6M 2024: 0.4) million euros in intangible assets. The
investments were aimed at acquiring production technology assets and developing
production and process management systems. Investments also included product
development activities focusing on the creation of new and improved products.
As of the reporting date, the value of the Group's long-term financial
investments was 27.2 (31.12.24: 27.7) million euros. Proceeds from the disposal
of the 9.15% stake in IGL-Technologies Oy amounted to 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 4.81 euros.
CONSOLIDATED
STATEMENT OF
FINANCIAL
POSITION
Unaudited
------------------------------------------------------------------------------
EUR '000 30.06.2025 31.12.2024 30.06.2024
------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash
equivalents 2,925 3,773 1,632
Trade and other
receivables 42,582 29,606 48,655
Prepayments 2,076 2,096 1,173
Inventories 25,124 19,845 28,745
Total current
assets 72,707 55,320 80,205
------------------------------------------------------------------------------
Non-current
assets
Deferred income
tax assets 526 687 722
Non-current
financial
investments 27,221 27,717 27,715
Investment
properties 28,927 29,432 28,901
Property, plant,
and equipment 32,238 32,420 33,275
Intangible assets 8,864 8,121 7,576
Total non-current
assets 97,776 98,377 98,189
------------------------------------------------------------------------------
TOTAL ASSETS 170,483 153,697 178,394
------------------------------------------------------------------------------
LIABILITIES AND
EQUITY
Liabilities
Borrowings 9,625 9,885 17,481
Prepayments from
customers 16,872 11,600 13,495
Trade and other
payables 26,232 17,426 27,761
Tax liabilities 3,502 3,260 4,598
Current
provisions 671 270 185
Total current
liabilities 56,902 42,441 63,520
------------------------------------------------------------------------------
Borrowings 19,939 20,184 23,207
Other non-current
liabilities 17 39 54
Total non-current
liabilities 19,956 20,223 23,261
------------------------------------------------------------------------------
TOTAL LIABILITIES 76,858 62,664 86,781
------------------------------------------------------------------------------
Equity
Share capital 11,655 11,655 11,655
Share premium 3,306 3,306 3,306
Reserves 23,035 23,135 23,063
Retained earnings 55,629 52,937 53,589
Total equity
attributable to
the owners of the
parent company 93,625 91,033 91,613
------------------------------------------------------------------------------
TOTAL LIABILITIES
AND EQUITY 170,483 153,697 178,394
------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF PROFIT AND
LOSS
Unaudited
----------------------------------------------------------------------------
EUR '000 Q2 Q2 6M 6M
2025 2024 2025 2024
----------------------------------------------------------------------------
Revenue 46,071 56,801 83,497 103,577
Cost of sales -38,635 -48,629 -70,394 -90,569
Gross profit 7,436 8,172 13,103 13,008
Distribution costs -1,395 -1,328 -2,681 -2,524
Administrative expenses -2,366 -2,227 -4,945 -4,744
Other income 7 75 1,030 94
Other expenses -97 -242 -127 -409
Operating profit 3,585 4,450 6,380 5,425
Finance income 267 11 900 104
Finance costs -1,067 -540 -1,352 -1,131
Profit before tax 2,785 3,921 5,928 4,398
Income tax -157 -454 -665 -571
Profit for the period 2,628 3,467 5,263 3,827
----------------------------------------------------------------------------
Earnings per share
Basic earnings per share (euros) 0.14 0.19 0.28 0.21
Diluted earnings per share (euros) 0.14 0.19 0.28 0.21
----------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Unaudited
------------------------------------------------------------------------------
EUR '000 Q2 Q2 6M 6M
2025 2024 2025 2024
------------------------------------------------------------------------------
Profit/loss (-) for the period 2,628 3,467 5,263 3,827
-------------------------
Other comprehensive income (loss)
Items that may be reclassified to profit or loss
Impact of exchange rate changes of a foreign
subsidiaries 300 -46 -288 60
Items that will not be reclassified to profit or
loss
Gain on sales of financial assets 385 185 204 185
Net gain on revaluation of financial assets -1 -141 175 -72
Total comprehensive income for the period 684 -2 91 173
Other comprehensive income 3,312 3,465 5,354 4,000
------------------------------------------------------------------------------
Priit Treial
CFO and Member of the Management Board
[email protected] (mailto:[email protected])
+372 674 7400