Harju Elekter Group financial results, 1-12/2017

Seotud dokumendid: 

For Harju Elekter Group, Q4 and 2017 as a whole both turned out to be full of changes and extremely successful. The large volume contracts concluded at the end of 2016 and the additional sales orders brought record sales revenue and the biggest profits in history. As discussed with the Supervisory Board, the Management Board proposes to pay 4.3 million euros (0.24 euros per share) in dividends to shareholders, which amounted 100% of the reporting year net profit of regular activities.

 

Change

January-December

Change

October - December

(thousand euros)

%

2017

2016

%

2017

2016

Sales revenue

67.8

102,668

61,167

75.6

28,818

16,408

Gross profit

50.8

15,625

10,361

83.1

4,570

2,496

EBITDA

58.8

7,587

4,777

62.3

2,345

894

EBIT

71.1

5,442

3,181

88.3

1,404

487

Profit for the period

803.6

29,132

3,224

52.3

946

375

incl attributed to Owners of the Company

804.9

29,129

3,219

64.5

976

369

Profit for the period without extraordinary income

33.2

4,293

3,224

 

 

 

Consolidated revenue for the reporting quarter was 28.8 (Q4 2016: 16.4) million euros, increasing by 75.6% in relation to the comparable period. The Group’s revenue for 12-month was 102.7 (2016: 61.2) million euros, increasing by 67.8% in relation to the comparable period. The main reason for the high growth was the contracts concluded at the end of 2016 and the orders for supplying of specialised pre-fabricated substations to USA in January 2017. In the third quarter, by the acquisition of Telesilta Oy an electrical installation service was added, accounting for 14.6% of the Group's sales revenue in the reporting quarter and 7.7% in the reporting year.

During the reporting quarter 76.1% (Q4 2016: 91.2%) of revenue was earned from the Manufacturing segment, Real Estate and Unallocated activities contributed 23.9% (Q4 2016: 8.8%) of the consolidated sales volume. Over the year, the sales of the Manufacturing segment increased by 29.6 million euros to 85.4 million euros, of which 97.1% was from the sale of electrical equipment. The decrease in Real Estate segment sales was caused by PKC Group Oyj ceasing its production activities in Estonia and leaving from the Group’s rental premises at the beginning of 2017. The available production spaces were taken into use by AS Harju Elekter Elektrotehnika in Q4 2017. In August, AS Stera Saue opened new production hall and warehouse in the Allika Industrial Park owned by AS Harju Elekter. Rental income reflected in the Group’s revenue as well as in income of Real Estate segment from the third quarter. The inclusion since Q3 of the financial indicators of Finnish company Telesilta OY, acquired in June, brought with it a growth in the sales revenue for Unallocated activities during the accounting quarter, as well as the accounting year. Electrical installation works comprised 66.0% among Unallocated activities sales revenue during the accounting quarter and 51.8% in the 12-month period accounting and 27.3% and 35.0% from the intermediate sale of electrical products due to the acquisition of Energo Veritas OÜ.

The Group’s sales revenue earned outside Estonia accounted for 85.8% in Q4 2017 (Q4 2016: 75.4%) and 84.0% in 2017 (2016: 78.1%).

Finland continues as the largest market of the Group. In the reporting quarter, 75.6% of the Group’s products and services (Q4 2016: 62.2%) were sold on the Finnish market, growing over the year by 11.6 million euros, i.e. 113.6%. Comparing the reporting 12 months, the increase was 34.0 million euros up to 75.0 million euros, accounting for 73.0% (2016: 67.0%) of the consolidated sales revenue. The main reason for the growth was the contracts concluded with Finnish network companies at the end of 2016, whose orders began in Q1 of 2017. The acquisition of the new subsidiary Telesilta Oy also made a significant contribution to the growth of the Finnish market, increasing Group’s sales revenue by 12.9% year-on-year.

Sales to the Norwegian market doubled to 5.9 million euros a year, accounting for 5.7% of consolidated sales revenue. The main reason for the growth was the increase in the order volumes of the Lithuanian subsidiary Rifas UAB in the Norwegian market. Sales on the Swedish market increased by 0.6 million euros up to 2.7 million euros during the 12-month period.

Sales on the Estonian market grew also. In 2017, sales on the Estonian market increased by 22.7% up to 16.4 million euros, accounting for 16.0% of the consolidated sales revenue. In Q4, sales on the Estonian market increased by 1.6% up to 4.1 million euros, accounting for 14.2% of the consolidated sales revenue of the reporting quarter.

In 2017, the operating expenses have increased at the same pace with the increase in sales revenue. Operating expenses increased 72.3%, i.e. 11.5 million euros in the reporting quarter compared to the reference period and in a year-on-year comparison, by 67.6% i.e. 39.2 million euros. The main reason for the upsurge in costs was the increase in the cost of sales: quarter to quarter by 74.3% i.e 10.3 million euros and by 71.3% i.e 36.2 million euros y-o-y. The distribution costs and administrative expenses increased totally by 1.1 million euros up to 3.1 million euros in the reporting quarter and by 3.0 million euros up to 10.1 million euros during the year. Both, the rate of distribution costs and the rate of administrative expenses are in decline and accounted for 4.6% (Q4 2016: 5.0%) and 6.3% (Q4 2016: 7.1%) of the sales revenue in the reporting quarte respectively. In 12-month period, the rate of distribution costs as well as the rate of administrative expenses decreased by 1 percentage point, being 4.0% and 5.8% respectively. The exponential rise in the volume of specific orders has brought with it the need to hire additional specialists, which was accompanied by training and new job preparation costs. In the last quarter, the Group has incurred expenditures on the preparation of new procurements and the acquisition of new subsidiaries in 2018.

At the end of the reporting period, there were 630 people working in the Group, which was 150 persons more than a year earlier, including with the acquisition of Telesilta Oy and Energo Veritas OÜ, added 42 employees to the Group. In Q4 2017, an average of 620 (Q4 2017: 467) employees worked in the Group. In year-on-year comparison, an average of 567 employees worked in the Group, which was on average 112 people more than in the reference period. In the reporting quarter, 4,127 (Q4 2016: 3,167) thousand euros were paid to the employees as salaries and fees, totally 14,073 (2016: 10,597) thousand euros during the year. The growth of wages was due to hiring new employees related to the significant increase in production volumes, being still lower from the growth of sales revenue (67.8%). In connection with good economic results, performance pay for 2017 and the reserves created at the end of the year have also increased. In 2017, the average monthly salary per employee of the Group was 2,067 euros, an average increase of 76 euros. The increase in the average salary was influenced by an increase in the share of Finnish employees in the Group as Finland has a significantly higher wage level than in Estonia and Lithuania. Labour costs increased by 51.6% up to 5.6 million euros in Q4, and by 38.9% up to 18.7 million euros during the year. The rate of labour costs accounted for 18.2% of the reporting year sales revenue, decreasing by 3.8 percentage points compared to the reference period.

In the reporting quarter, the gross profit of the Group was 4,570 (Q4 2016: 2,496) thousand euros. The gross profit margin was 15.9% (Q4 2016: 15.2%). In the reporting year, the gross profit of the Group was 15,625 (2016: 10,361) thousand euros. The gross profit margin was 15.2% (2016: 16.9%).

In the reporting quarter, the Group’s operating profit was 1,404 (Q4 2016: 487) thousand euros and EBITDA 2,345 (Q4 2016: 894) thousand euros. Return of sales for the reporting quarter was 4.9% (Q4 2016: 3.0%) and return of sales before depreciation 8.1% (Q4 2016: 5.5%).

The Group’s operating profit of 2017 was 5,442 (2016: 3,181) thousand euros and EBITDA 7,587 (2016: 4,777) thousand euros. Return of sales for the reporting 12-month period was 5.3% (2016: 5.2%) and return of sales before depreciation was 7.4% (2016: 7.8%). Return of sales has decreased due to less rental income as PKC Group Oyj moved out from the Group’s rental premises in the beginning of 2017 and the increase in global commodity prices. European sheet metal producers raised their prices in the first half of the year, affecting the cost of sales of the Group. Also, the non-recurrent expenses occurred in AS Harju Elekter Elektrotehnika, resulting from moving to new production facilities, had effect on return of sales.

In the reporting quarter, the consolidated net profit was 946 (Q4 2016: 375) thousand euros, of which the share of the owners of the Company was 976 (Q4 2016: 369) thousand euros. EPS in the Q4 2017 was 0.06 euros (Q4 2016: 0.02 euros).

Overall, the consolidated net profit of the year 2017 was 29,132 (2016: 3,224) thousand euros. The share of the owners of the Company was 29,129 (2016: 3,219) thousand euros. EPS was 1.64 (2016: 0.18) euros. Large net profit was the result of one-time financial income from the sale of the PKC Group Oyj shares in amount of 24,839 thousand euros. Profit for the period without extraordinary income was 4,293 (2016: 3,224) thousand euros and EPS 0.24 (2016: 0.18) euro. 

In 2017, the Group has made a total of 7.3 (2017: 4.8) million euros. Investment growth is related to the ongoing developments of Allika Industrial Park as well as investments into the production.

Cash and cash equivalents increased by 7.7 million euros to 11.0 million euros in the reporting year and decreased by 2.4 million euros to 3.3 million euros in the comparable period.

During the year 2017, Harju Elekter’s share in Nasdaq Tallinn increased by 75.4% from 2.85 euros up to 5.00 euros.

Andres Allikmäe
Chairman of the Management Board
+372 674 7400

For more information: Tiit Atso, CFO, +372 674 7400 or Interim report 1-12/2017 

AS HARJU ELEKTER        
CONSOLIDATED BALANCE SHEET,31.12.2017        
Unaudited        
         
EUR'000        
ASSETS                                                   31.12.17 31.12.16    
Cash and cash equivalents 10 992 3 278    
Available-for-sale financial assets 9 935 0    
Trade receivables and other receivables 13 575 8 480    
Prepayments 1 118 771    
Prepaid income tax 56 24    
Inventories 13 037 9 712    
TOTAL CURRENT ASSETS                     48 713 22 265    
Deferred income tax asset 56 37    
Other long-term financial investments 4 684 21 990    
Investment property 17 881 13 273    
Property, plant and equipment 11 983 10 972    
Intangible assets 6 660 5 431    
TOTAL NON-CURRENT ASSETS 41 264 51 703    
TOTAL ASSETS                              89 977 73 968    
LIABILITIES AND OWNERS' EQUITY                   
Interest-bearing loans and borrowings 625 804    
Advances from customers 1 088 9 140    
Trade payables and other payables 12 802 1 242    
Payables to shareholders 0 1 075    
Tax liabilities   2 106 133    
Income tax liabilities 270 15    
Short-term provision 245 12 409    
TOTAL CURRENT LIABILITIES                 17 136 1 167    
NON-CURRENT LIABILITIES             2 910 13 576    
TOTAL LIABILITIES                         20 046 12 418    
Share capital                             11 176 -1 242    
Share premium 804 804    
Restricted reserves                       2 844 19 214    
Retained earnings                         55 048 29 113    
TOTAL OWNERS' EQUITY                       69 872 60 307    
Non-controlling interests 59 85    
TOTAL EQUITY                       69 931 60 392    
TOTAL LIABILITIES AND OWNERS' EQUITY      89 977 73 968    
         
         
CONSOLIDATED INCOME STATEMENT,  1-12/2017        
Unaudited        
         
         
EUR’000 Q4 2017 Q4 2016 2017 2016
         
Revenue 28 818 16 408 102 668 61 167
Cost of goods sold -24 248 -13 912 -87 043 -50 806
Gross profit 4 570 2 496 15 625 10 361
Distribution costs -1 325 -818 -4 132 -3 034
Administrative expenses -1 820 -1 165 -5 981 -4 138
Other income 10 10 50 76
Other expenses -31 -36 -120 -84
Operating profit 1 404 487 5 442 3 181
Finance income 20 6 24 869 775
Finance costs -190 -7 -96 -24
Profit from normal operations 1 234 486 30 215 3 932
Corporate income tax -288 -111 -1 083 -708
Profit for the period, attributable to 946 375 29 132 3 224
   owners of the Company 976 369 29 129 3 219
   non-controlling interests -30 6 3 5
Basic earnings per share  (EUR) 0,06 0,02 1,64 0,18
Diluted earnings per share  (EUR) 0,06 0,02 1,64 0,18

Tiit Atso
CFO
+372 674 7400