PRESS RELEASES 2003



07.11.2003
AS HARJU ELEKTER
HOME

FINANCIAL RESULTS FOR M9

The consolidated net sales of Harju Elekter Group for M9 2003 amounted to 235,4 MEEK or 15,0 MEUR (M9 2002: 186,6 MEEK or 11,3 MEUR). The net profit of the Group was 110,8 MEEK or 7,1 MEUR (M9 2002: 50,6 MEEK or 3,2 MEUR) and EPS 20,52 EEK or 1,31 EUR (M9 2002: 9,38 EEK or 0,60 EUR).

According to chairman of the management board Andres Allikmäe, the nine months’ results of the group are very satisfactory. International extension of the group’s main activity, production and electrical equipment and materials, has proved fruitful. Accession to the European Union gives additional opportunities for the company’s successful development.

Sales and revenues

The consolidated net sales of Harju Elekter Group for M9 2003 amounted to 235,4 MEEK or 15,0 MEUR (M9 2002: 186,6 MEEK or 11,3 MEUR), i.e 26,1% growth. Sales on the domestic market grew by 12,7%, thus accounting for 52,7% (M9 2002: 59,0%) of the consolidated net sales. Sales on foreign markets amounted to 111,3 MEEK or 7,1 MEUR (M9 2002: 76,5 MEEK or 4,9 MEUR), of which sales in Finland amounted to 98,6 MEEK or 6,3 MEUR (M9 2002: 65,6 MEEK or 4,2 MEUR), of which Finnish subsidiary Satmatic Oy contributed 63,1 MEEK or 4,0 MEUR (M9 2002: 4,9 MEEK or 315 TEUR).

In comparison with the same period in 2002, the sale of electrical equipment to non-Group customers increased to 70,1 MEEK (4,5 MEUR) or 89,8%, of which 58,3 MEEK (3,7 MEUR) was contributed by Finnish subsidiary Satmatic OY. The sales of the plant of electrical equipment went up 13,9%. Sale of electrical equipment accounted for 62,9% (9M 2002: 41,8%) of the sales income of the reporting period of the consolidation group.

Profit

The M9 operating profit of the consolidation group was 14,1 MEEK or 901 TEUR (M9 2002: 12,5 MEEK or 797 TEUR), including in Q3 6,2 MEEK or 398 MEUR (Q3 2002: 6,0 MEEK or 382 MEUR). Operating margin of the Group in nine months was 6% (9M 2002: 6,7%), which in the third quarter was by 1,3 percentage points better than the nine-month figure, reaching 7,3% (Q3 2002: 9,7%).

The M9 operating profit of the parent company increased 11,4% in comparison with the previous period (M9 2003: 12,9 MEEK or 827 TEUR; M9 2002: 11,6 MEEK or 742 TEUR). Operating margin of Q3 2003 was respectively 11,1% and 11,2% (M9 2003: 9,0%; M9 2002: 8,2).

The profit from financial operations was 96,8 MEEK or 6,2 MEUR (M9 2002: 7,5 MEEK or 481 TEUR). Starting 1 January 2003, shares of PKC in the balance sheet are calculated in market price, which is increased 2,15 times. The revaluation of the shares of PKC Group Oyj at the end of the quarter as of 30 September 2003 incurred additional financial income in Q3 in the amount of 29 MEEK (1,9 MEUR) and in nine months 81,3 MEUR (5,2 MEUR). For 2002, PKC Group Oyj paid dividends in the amount of 4,6 MEEK or 291 TEUR which is more than double the amount paid last year (M9 2002: 2,1 MEEK or 132 TEUR). The total nine-month financial income from other financial investments was 86,7 MEEK (5,5 MEUR), of which Q3 was 29,8 MEEK or 1,9 MEUR. One-off financial income from the sale of shares of AS Keila Kaabel in July was 6,3 MEEK (403 TEUR).

In summary, the nine-month net profit of the consolidation group was 110,8 MEEK or 7,1 MEUR (M9 2002: 50,6 MEEK or 3,2 MEUR). Net profit margin was 47,1% (M9 2002: 27,1%) and EPS 20,52 EEK or 1,31 EUR (M9 2002: 9,38 EEK or 0,60 EUR).

Investments and capital employed

During the investment period, the Group invested in tangible assets a total of 37,2 MEEK or 2,4 MEUR (M9 2002: 10,5 MEEK or 673 TEUR), of which construction and renovation work of buildings and plant was 31,8 MEEK or 2,0 MEUR (M9 2002: 3,5 MEEK or 220 TEUR). Investment in technology was 2,5 MEEK or 160 TEUR (M9 2002: 4,5 MEEK or 285 TEUR).

In July Harju Elekter sold 105 shares of Keila Kaabel, collecting 8,7 MEEK or 559 MEUR and in September it sold 20 000 shares, collecting 4,7 MEEK or 299 TEUR.

To finance the expansion of PKC Estonia and Keila Kaabel, Harju Elekter took a total of 21,6 MEEK (1,38 MEUR) in long-term loans from banks. The Group spent a total of 2,1 MEEK (134 TEUR) on capital lease for acquisition of production equipment. The company repaid in main part of long-term loan and capital rent during the reporting period a total of 6,5 MEEK or 418 TEUR (M9 2002: 6,6 MEEK or 420 TEUR). For 2002, shareholders were paid dividends in the amount of 10,8 MEEK or 690 TEUR (2002: 7,6 MEEK or 483 TEUR), which did not incur an income tax liability on AS Harju Elekter.

Balance sheet

Within nine months, the cost of assets on the consolidated balance sheet increased by 124 MEEK or 7,9 MEUR (48 MEEK or 3,08 MEUR within nine months of 2002), reaching 402 MEEK or 26 MEUR as at 30 September 2003 (225 MEEK or 14 MEUR on 30 Sept.2002). The market value of shares of PKC Group Oy has increased 2,14 times in 9 months from 7,1 EUR in the opening balance to 15,24 EUR on the balance sheet date (30.9.2003). Because of the adjustment of securities, the cost of assets in the balance sheet has gone up by 81,3 MEEK or 5,2 MEUR.

Personnel

The average number of employees in the group was 286 (M9 2002:373). As of the balance sheet date 30.09.03 the group employed 294 persons (293 in 2002).

Inportant events in Q3

In the third quarter, PKC Eesti (former Harju Elekter cable harnesses factory) received into their use a new 4 500 sq. m. production hall. PKC Eesti has been renting production premises from Harju Elekter since July 2002. To finance the construction, AS Harju Elekter procured a MEUR 1 (MEEK 15,6) long-term loan from a Finnish bank, subject to repayment within eight years.

In July, Harju Elekter sold 105 shares of AS Keila Kaabel. The extraordinary general meeting of shareholders decided to issue 200 new shares of AS Keila Kaabel by way of placement with Draka NK Cables for the purpose of financing investments and know-how. After the transaction, the share capital of Keila Kaabel is 26 MEEK (1,6 MEUR) which divides as follows between the parties concerned: Harju Elekter – 34% and Draka NK Cables – 66%.

On 8 September 2003, AS Harju Elekter signed preliminary contracts for purchase of procure of a 51% shareholding in the Lithuanian company UAB Rifas by acquiring 1 250 common shares or 25% of the company’s shares from former owners and with the issue of 2 650 new common shares placed with Harju Elekter. The transaction value was 10,6 MEEK (0,68 MEUR). Since 1 October, after the sale and purchase transaction, 51% of UAB Rifas is owned by AS Harju Elekter and 49% is owned by private persons of the Republic of Lithuania. UAB Rifas was founded in 1991. The main business of the company is the manufacture and sale of electrical control and distribution units and the design and installation of industrial automation equipment. The unconsolidated sales of UAB Rifas for 2002 were 7 MLIT or 32 MEEK. Unconsolidated sales of nine months 2003 were 22,5 MEEK or 1,4 MEUR (M9 2002: 20,7 MEEK or 1,3 MEUR). Besides the parent company, the Rifas Group comprises the 51% subsidiaries UAB Automatikos Iranga and UAB Birzu Montuotojas. The Group employs 61 persons. After having acquired the subsidiary, Harju Elekter has now good prospects to increase the market share in the Lithuanian energy distribution and building sector. The capacity of the Rifas plant will be doubled to promote sales in Lithuania. Close cooperation between the Estonian, Finnish, and Lithuanian subsidiaries of Harju Elekter Group will imply a wider product range.

For the purpose of expanding the core business of Harju Elekter in Lithuania and financing the acquisition of the subsidiary, Harju Elekter sold in September its relatively passive investment in PKC Group Oyj of 20,000 shares and another 20,000 shares in October, earning a total of 11,6 MEEK (0,74 MEUR). After the transaction Harju Elekter owns 11% of shares of PKC Group.

Andres Allikmäe
Chairman of the Board
+372 6 747 400

BALANCE SHEETS
BALANCE SHEET OF THE GROUP, 30.09.2003
Consolidated, unaudited

in thousand

EEK

EUR

ASSETS

30.09.03

31.12.02

30.09.03

31.12.02

Cash, bank

12 496

11 620

799

743

Total customer receivables

33 401

28 705

2 135

1 834

Other current receivables

3 916

2 035

250

130

Accrued income

1 527

14

98

1

Prepaid expenses

1 653

753

106

48

Total current receivables

40 497

31 507

2 588

2 013

Raw materials and inventories

40 240

35 527

2 572

2 271

Goods

6 062

4 616

387

295

Prepayments to suppliers

154

0

10

0

Total inventories

46 456

40 143

2 969

2 566

TOTAL CURRENT ASSETS

99 449

83 270

6 356

5 322

Stock and shares in ass.comp.

25 626

26 586

1 638

1 699

Other shares

149 354

70 803

9 545

4 525

Other long-term receivables

77

379

5

24

Total financial investments

175 056

97 768

11 188

6 249

Plant and equipment

102 183

77 556

6 531

4 957

Other equipment and fixtures

50 934

46 385

3 255

2 965

Other inventory

3 551

3 277

227

209

Accumulated depreciation

-41 676

-35 288

-2 664

-2 255

Construction-in-progress

11 081

3 556

708

227

Prepayments for fixed assets

35

28

2

2

Total tangible assets

126 109

95 514

8 060

6 104

Licences

1 126

1 206

72

77

Goodwill

0

16

0

1

Total intangible assets

1 126

1 222

72

78

TOTAL NON-CURRENT ASSETS

302 291

194 504

19 320

12 431

TOTAL ASSETS

401 740

277 774

25 676

17 753

LIABILITIES AND OWNERS' EQUITY

Debt obligations

7 160

12 360

458

790

Customer prepayments

126

193

8

12

Supplier payables

28 883

22 438

1 846

1 434

Other short-term borrowings

1 695

1 251

108

80

Tax liabilities

3 250

5 405

208

345

Accrued expenses

7 614

5 869

487

375

Other prepaid revenue

648

0

41

0

TOTAL CURRENT LIABILITIES

49 376

47 516

3 156

3 037

TOTAL NON-CURRENT LIABILITIES

27 791

5 707

1 776

365

TOTAL LIABILITIES

77 167

53 223

4 932

3 402

Share capital

54 000

54 000

3 451

3 451

Restricted reserves

8 600

8 600

550

550

Retained earnings

151 151

108 698

9 661

6 947

Net profit for the year

110 822

53 254

7 083

3 404

TOTAL OWNERS' EQUITY

324 574

224 551

20 744

14 351

TOT.LIABIL.AND OWNERS' EQUITY

401 740

277 774

25 676

17 753

BALANCE SHEET OF THE PARENT COMPANY, 30.09.2003
Consolidated, unaudited

in thousand

EEK

EUR

ASSETS

30.09.03.

31.12.02.

30.09.03.

31.12.02.

Cash, bank

10 731

11 165

686

714

Total customer receivables

20 685

12 075

1 322

772

Other current receivables

7 484

8 056

478

515

Accrued income

1 525

0

97

0

Prepaid expenses

1 455

564

93

36

Total current receivables

31 149

20 694

1 991

1 323

Raw materials and inventories

22 695

16 690

1 450

1 067

Goods

6 014

4 575

384

292

Prepayments to suppliers

154

0

10

0

Total inventories

28 862

21 265

1 845

1 359

TOTAL CURRENT ASSETS

70 742

53 124

4 521

3 395

Stock and shares in subs.

14 115

13 759

902

879

Other long-term receiv.from subs.

6 780

6 780

433

433

Stock and shares in ass.comp.

25 626

26 587

1 638

1 699

Other shares

149 354

70 803

9 545

4 525

Other long-term receivables

77

379

5

24

Total financial investments

195 952

118 308

12 524

7 561

Plant and equipment

102 057

77 428

6 523

4 949

Other equipment and fixtures

30 268

26 033

1 934

1 664

Other inventory

1 861

1 751

119

112

Accumulated depreciation

-33 215

-28 798

-2 123

-1 841

Construction-in-progress

11 081

3 556

708

227

Prepayments for fixed assets

35

28

2

2

Total tangible assets

112 087

79 998

7 164

5 113

Licences

555

750

35

48

Total intangible assets

555

750

35

48

TOTAL NON-CURRENT ASSETS

308 594

199 055

19 723

12 722

TOTAL ASSETS

379 336

252 179

24 244

16 117

LIABILITIES AND OWNERS' EQUITY

Debt obligations

1 234

5 516

79

353

Customer prepayments

95

193

6

12

Supplier payables

21 594

13 501

1 380

863

Other short-term borrowings

2 502

1 269

160

81

Tax liabilities

1 269

2 525

81

161

Accrued expenses

3 993

3 191

255

204

Other prepaid revenue

648

41

0

TOTAL CURRENT LIABILITIES

31 334

26 195

2 003

1 674

TOTAL NON-CURRENT LIABILITIES

23 429

1 433

1 497

92

TOTAL LIABILITIES

54 763

27 628

3 500

1 766

Share capital

54 000

54 000

3 451

3 451

Restricted reserves

8 600

8 600

550

550

Retained earnings

151 151

108 698

9 660

6 947

Net profit for the year

110 822

53 254

7 083

3 404

TOTAL OWNERS' EQUITY

324 574

224 551

20 744

14 351

TOT.LIABIL.AND OWNERS' EQUITY

379 336

252 179

24 244

16 117

INCOME STATEMENTS
INCOME STATEMENT OF THE GROUP, M9 2003
Consolidated,unaudited

in thousand

EEK

EUR

Group

M9 2003

M9 2002

M9 2003

M9 2002

NET SALES

235 382

186 636

15 044

11 928

Cost of goods sold

-191 419

-152 323

-12 234

-9 735

Gross profit

43 964

34 313

2 810

2 193

Operating expenses, incl.

-29 587

-21 707

-1 891

-1 387

Marketing expenses

-11 965

-8 422

-765

-538

Administrative expenses

-17 622

-13 285

-1 125

-849

Other revenue

169

290

11

19

Other expenses

-445

-425

-28

-26

Operating profit

14 101

12 471

901

797

Financial income and expenses, incl.

-from associated companies

10 838

6 005

693

384

-from other holdings

86 731

2 254

5 542

144

-interest expense

-918

-902

-59

-58

-profit/loss from foreign exch.

-38

-29

-2

-2

-other fin.income/expenses

140

194

9

12

Tot.fin.income and expenses

96 754

7 522

6 183

481

Profit from normal operations

110 855

19 993

7 085

1 278

External income

0

30 641

0

1 958

Corporate Income tax

-33

-2

0

Net profit for the year

110 822

50 634

7 083

3 236

Basic earnings per share

20,52

9,38

1,31

0,60

Diluted earnings per share

20,20

9,38

1,29

0,60

INCOME STATEMENT OF THE GROUP, 2003 Q3

in thousand

EEK

EUR

Group

Q3 2003

Q3 2002

Q3 2003

Q3 2002

NET SALES

85 816

61 464

5 485

3 928

Cost of goods sold

-69 727

-48 418

-4 455

-3 094

Gross profit

16 090

13 046

1 028

834

Operating expenses, incl.

-9 927

-7 029

-634

-449

Marketing expenses

-4 209

-2 777

-269

-176

Administrative expenses

-5 718

-4 252

-365

-272

Other revenue

127

51

8

3

Other expenses

-68

-86

-4

-5

Operating profit

6 222

5 982

398

382

Financial income and expenses, incl.

-from associated companies

9 600

3 648

614

233

-from other holdings

29 847

28

1 908

2

-interest expense

-421

-278

-27

-18

-profit/loss from foreign exch.

-8

-29

-1

-2

-other fin.income/expenses

50

110

3

7

Tot.fin.income and expenses

39 069

3 479

2 497

222

Profit from normal operations

45 291

9 461

2 895

605

External income

0

29 915

0

1 912

Corporate Income tax

-33

-2

0

Net profit for the year

45 258

39 376

2 893

2 517

Basic earnings per share

8,38

7,29

0,54

0,47

Diluted earnings per share

8,21

7,29

0,52

0,47

INCOME STATEMENT OF THE PARENT COMPANY, M9 2003
Unaudited

in thousand

EEK

EUR

Parent company

M9 2003

M9 2002

M9 2003

M9 2002

NET SALES

143 675

141 369

9 182

9 035

Cost of goods sold

-112 825

-113 246

-7 211

-7 238

Gross profit

30 849

28 123

1 972

1 797

Operating expenses, incl.

-17 662

-16 441

-1 129

-1 051

Marketing expenses

-6 681

-6 500

-427

-415

Administrative expenses

-10 980

-9 941

-702

-635

Other revenue

130

253

8

16

Other expenses

-378

-325

-24

-21

Operating profit

12 939

11 610

827

742

Financial income and expenses, incl.

-from subsidiaries

293

299

19

19

-from associated companies

10 838

6 005

693

384

-from other holdings

86 731

2 255

5 543

144

-interest expense

-472

-391

-30

-25

-profit/loss from foreign exch.

-15

-12

-1

-1

-other fin.income/expenses

507

227

32

15

Tot.fin.income and expenses

97 883

8 383

6 256

536

Profit from normal operations

110 822

19 993

7 083

1 278

External income

0

30 641

0

1 958

Net profit for the year

110 822

50 634

7 083

3 236

Basic earnings per share

20,52

9,38

1,31

0,60

Diluted earnings per share

20,20

9,38

1,29

0,60

INCOME STATEMENT OF THE PARENT COMPANY, 2003 Q3

in thousand

EEK

EUR

Parent company

Q3 2003

Q3 2002

Q3 2003

Q3 2002

NET SALES

49 308

48 401

3 151

3 093

Cost of goods sold

-38 857

-38 388

-2 483

-2 453

Gross profit

10 451

10 013

668

640

Operating expenses, incl.

-6 296

-5 849

-403

-374

Marketing expenses

-2 295

-2 527

-147

-162

Administrative expenses

-4 001

-3 322

-256

-212

Other revenue

50

44

3

3

Other expenses

-164

-72

-10

-5

Operating profit

4 041

4 136

258

264

Financial income and expenses, incl.

- from subsidiaries

-665

-3 888

-42

-248

- from associated companies

1 163

1 577

74

101

- from other holdings

53 398

11

3 413

1

- interest expense

-155

-106

-10

-7

- profit/loss from foreign exchange

-15

-13

-1

-1

- other financial income/expenses

153

51

10

3

Total financial income and expenses

53 879

-2 368

3 444

-151

Profit from normal operations

57 920

1 768

3 702

113

External income

0

4 039

0

258

Net profit for the year

57 920

5 807

3 702

371

Basic earnings per share

10,73

1,08

0,69

0,07

Diluted earnings per share

10,59

1,08

0,68

0,07

Karin Padjus
Chief accountant
67 47 403

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01.10.2003
AS HARJU ELEKTER
ANNOUNCEMENT

ACQUISITION OF SUBSIDIARY IN LITHUANIA

According to the preliminary contract made on 8 September 2003, the transaction by which AS Harju Elekter acquired 51% of the shares of UAB Lifas (Lithuania) closed today, on 1 October 2003. Chairman Andres Allikmäe and members: Endel Palla, Ülo Merisalu, Stanislovas Slapsys and Mindaugas Slapsys were appointed to the management board of the company. Stanislovas Slapsys continues as the Managing Director. The parties agreed not to disclose the price of the transaction.

UAB Rifas was founded in 1991. The main business of the company is the manufacture and sale of electrical control and distribution units and the design and installation of industrial automation equipment. Besides the parent company, the Rifas Group comprises the 51% subsidiary UAB Automatikos Iranga and the 50.3% subsidiary UAB Birþu Montuotojas. The unconsolidated sales of UAB Rifas for the 2002 were LIT 7m or EEK 32m, and the profit margin is 8–10%. The Group employs 61 persons.

After acquiring the subsidiary, Harju Elekter will have goods prospects to increase the market share in the Lithuanian energy distribution and building sector. To promote sales in Lithuania, the capacity of the Rifas plant will be doubled. Close cooperation between the Estonian, Finnish, and Lithuanian subsidiaries of Harju Elekter Group will imply a wider product range.

Harju Elekter was founded in 1968 and is now a leading producer of electrical equipment and materials in the Baltic States. Harju Elekter has holdings in the subsidiaries AS Eltek (100%) and Satmatic Oy (100%), and in the related companies AS Keila Kaabel (34%) and AS Saajos Balti (33.3%).

Harju Elekter also has almost 12% holding in PKC Group Oyj, a company listed on the Helsinki Stock Exchange. The group’s sales amounted to EEK 149.6m (EUR 9.6m) in the first half of 2003, of which 48.3% was exported. The net profit was EEK 65.6m (EUR 4.2m).

Andres Allikmäe
Chairman of Management Board
+372 6 747 400

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09.09.2003
AS HARJU ELEKTER
ANNOUNCEMENT

ACQUISITION OF SUBSIDIARY IN LITHUANIA

On 8 September 2003, AS Harju Elekter signed a preliminary contract for acquisition of a 51% holding in the Lithuanian company UAB Rifas. The unconsolidated net sales of Rifas are LIT 7m or EEK 32m and the Group employs 61 persons. The transaction will close in week 40; the parties are not disclosing the price.

Harju Elekter buys 1250 shares or 25% of the company from the former owner. A placing of 2650 new shares will be held for Harju Elekter. After the transaction, AS Harju Elekter will own 51% of UAB.

UAB Rifas was founded in 1991. Its main business is design of automatic equipment, manufacture and installation of control centres. Besides the parent company, the Rifas Group comprises the 51% subsidiary UAB Automatikos Iranga (sales in 2002: LIT 1.3m) and the 50.3% subsidiary UAB Birzu Montuotojas (sales in 2002: LIT 1.1m). The main business of Automatikos Iranga is the design of industrial and process automatic equipment, and Birzu Montuotojas is specialised in electrical installation work. The main business of the parent company Rifas is the manufacture of electrical and control boards. The unconsolidated sales of the company for the 2002 were LIT 7m or EEK 32m, and the profit margin is 8–10%.

After acquiring the subsidiary, Harju Elekter will have not only a considerable share in the automatics sector, but goods prospects to increase the market share in the Lithuanian energy distribution and building sector. To promote sales in Lithuania, the capacity of the Rifas plant will be doubled. Close cooperation between the Estonian, Finnish, and Lithuanian subsidiaries of Harju Elektri Grupp will imply a wider product range.

Harju Elekter was founded in 1968 and is now a leading producer of electrical equipment and materials in the Baltic States. Harju Elekter has holdings in the subsidiaries AS Eltek (100%) and Satmatic Oy (100%), and in the related companies AS Keila Kaabel (34%) and AS Saajos Balti (33.3%). Harju Elekter also has a 12% holding in PKC Group Oyj, a company listed on the Helsinki Stock Exchange. The group’s sales amounted to EEK 149.6m (EUR 9.6m) in the first half of 2003, of which 48.3% was exported. The net profit was EEK 65.6m (EUR 4.2m).

Andres Allikmäe
Chairman of Management Board
+372 6 747 400

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12.08.2003
AS HARJU ELEKTER
NEWS RELEASE

QUALITY CERTIFICATE OF SUBSIDIARY

Satmatic Oy, subsidiary of AS Harju Elekter, has received a quality certificate.

The quality management system of Satmatic Oy, subsidiary of AS Harju Elekter, has been certified by Bureau Veritas Quality International to comply with ISO 9001-2000 requirements.

The certificate covers developing, manufacturing, erecting and marketing of automation control systems cabinets, electrical drive cabinets, and motor control cabinets switch gears, and field installations.

The certificate of the quality management system was handed over to the company on 6 August 2003 and it remains valid for a term of three years.

The certificate improves the competitiveness of Satmatic Oy and the entire Harju Elekter Group on the Finnish market.

AS Harju Elekter acquired a 100% holding in Satmatic Oy from Siemens Oy in September 2002 and the subsidiary has been fully integrated into the group’s management systems by now.

Andres Allikmäe
Chairman of Management Board
+ 372 6747 400

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07.08.2003
AS HARJU ELEKTER
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FINANCIAL RESULTS FOR H1 2003

The consolidated net sales of Harju Elekter Group for H1 2003 amounted to 149,6 MEEK or 9,6 MEUR (H1 2002: 125,2 MEEK or 8,0 MEUR). The Group's net profit for the H1 2003 was 65,6 MEEK or 4,2 MEUR (H1 2002: 11,3 MEEK or 719 TEUR)and EPS 12,14 EEK or 0,78 EUR (H1 2002: 2,08 EEK or 0,13 EUR).

According to Andres Allikmäe, Chairman of the Management Board, the Group’s results in the first half of 2003 met every expectation. Larger than usual development and investments projects were under way, each should start to pay back in the near future already.

Sales and revenues

The consolidated net sales of Harju Elekter Group for H1 2003 amounted to 149,6 MEEK or 9,6 MEUR (H1 2002: 125,2 MEEK or 8,0 MEUR),i.e. 19,5% growth. Sales on the domestic market grew by 18,4%, thus accounting for 51,8% (H1 2002: 52,2%) of the consolidated net sales. Export sales amounted to 72,2 MEEK or 4,6 MEUR (H1 2002: 59,8 MEEK or 3,8 MEUR), i.e. 20,7% growth. Sales on the Finnish market increased 25,4%.

In the Estonian enterprises of the group, the total sales of the accounting period form 86,2% of the level of the previous year. However, the income of the H1 2002 includes the sale of products and services of the cable harnesses factory amounting to 31,1% of the group’s sales of the period, that is 38,9 MEEK(2,5 MEUR).Apart from the sales of the cable harnesses factory in the H1 2002, the comparable sales growth of the Estonian enterprises would be 25,1%.

Profit

The Group's operating profit was 7,9 MEEK or 504 TEUR (H1 2002: 6,5 MEEK or 415 TEUR).

Compared to last year, the marketing and general administrative costs in the first quarter increased by almost 5 MEEK (318 TEUR).The income statement for six months of this year include the operating costs of the subsidiary Satmatic OY acquired in September 2002, which are nearly 4 MEEK (250 TEUR) greater than the expenses of the subsidiary AJT Harju Elekter in the first half of 2002 due to the different wage levels in Estonia and Finland. The profit margin of the Group was 5,3% (5,2% in the first half of 2002).

The operating profit of the mother company for six months increased by 12% compared to the same period last year (6,9 MEEK or 444 TEUR in the first half of 2003; 6,2 MEEK or 394TEUR in the first half of 2002). The profit margin also improved by 1,1 percentage points.

Financial income was 57,7 MEEK or 3,7 MEUR (H1 2002: 4,0 MEEK or 258 TEUR). PKC Group paid dividends for the year 2002 in an amount of 4,6 million EEK (291 TEUR), which is over two times more than in the previous year(H1 2002: 2,1 MEEK or 132 TEUR). Revaluation of the shares of PKC Group Oyj as at the end of the quarter, 30 June 2003, yielded a profit of 52,3 MEEK (3,3 MEUR). As from 1 January 2003, the shares of PKC are valued at market price on the balance sheet. Their price on the last trading day of the financial year ending on 31 December 2002 on the Helsinki Stock Exchange was 7,10 EUR, but on 30 June 2003 the price was already 12,28 EUR. Thus, the market price grew by 73,0%.

In total, the Group's net profit for the H1 2003 was 65,6 MEEK or 4,2 MEUR (H1 2002: 11,3 MEEK or 719 TEUR). Net profit margin settled at 43,8%(H1 2002: 9,0%). EPS was 12,14 EEK or 0,78 EUR (H1 2002: 2,08 EEK or 0,13 EUR). If we eliminate the profit from revaluation of the shares of PKC in the results for 2003, the comparable net profit for the period would be 13,2 MEEK (846 TEUR) and the rate of return on net profit would be 8,9%, about the same as in 2002.

Cash flow, investments and capital employed

Cash flow from operating activities was 9,1 million EEK or 584 TEUR (H1 2002: 9,3 MEEK or 593 TEUR), outflow due to investing activities 15,5 million EEK or 990 TEUR (H1 2002: 2,9 MEEK or 187 TEUR) and financing activities 2,3 MEEK or 147 TEUR (H1 2002: ourflow 9,9 MEEK or 632 TEUR). During the first half of 2003 cash balance on hand and in bank decreased by 4,1 MEEK or 259 TEUR (H1 2002: 3,5 MEEK or 226 TEUR).

During the accounting period the Group invested 26,8 MEEK or 1,7 MEUR in tangible and intangible fixed assets (H1 2002: 8,2 MEEK or 526 TEUR). Investments in plant and technology were 2,2 MEEK or 140 TEUR (H1 2002:3,7 MEEK or 239 TEUR), into the buildings and reconstructions 23,5 MEEK or 1,5 MEUR (H1 2002: 2,0 MEEK or 128 TEUR).

In the accounting period, AS Harju Elekter purchased 9 thousand shares of PKC Group Oyj and paid 1 061 TEEK (68 TEUR) for the investment.

For financing the extension to be built to PKC Eesti, Harju Eelekter raised a long-term loan in the amount of 15,6 MEEK (995 TEUR). Harju Elekter obtained production equipment for the price of 1,7 MEEK (106 TEUR) on the basis of a financial lease contract. Long-term loan and capital lease repayments during the accounting period accounted for 4,2 MEEK or 272 TEUR (H1 2002: 4,4 MEEK or 278 TEUR).

Balance sheet

In accordance with the new Accounting Act of the Republic of Estonia and new standards of the Estonian Accounting Standards Board, which entered into force on 1 January 2003, Harju Elekter Group changed the accounting method of financial instruments. As from 2003, financial instruments are recorded in the balance sheet using the method of fair value. Financial investments (shares of PKC Group Oyj) in the balance sheet as of 31 December 2002 were adjusted to their market value according to the rate of the last trading day of 2002. The difference between the fair value and balance sheet value arising from the revaluation was 53,9 million EEK (3,5 MEUR), by which the opening balance of retained earnings under the owners’ equity and the opening balance of other long-term shares under long-term financial investments were increased. As a result, the proportion of owners’ equity increased in the balance sheet from 76,2% to 80,8% as of 31 December 2002 and fixed assets increased from 62,8% to 70,0% in the adjusted opening balance sheet of 2003.

Within six months, the cost of assets on the consolidated balance sheet increased by 83 MEEK or 5,3 MEUR (15 MEEK or 0,97 MEUR within six months of 2002), reaching 361 MEEK or 23 MEUR as at 30 June 2003 (192 MEEK or 12MEUR on 30 June 2002). The value of fixed assets increased by 73 MEEK or 5 MEUR over the six months, constituting 74,4% of total assets as at the end of the period. Current receivables increased by 7,5 MEEK or 0,48 MEUR in the first half of the year (8,5 MEEK or 0,54 MEUR in the first half of 2002, which constituted an increase in accounts receivable) and inventories grew by 5,6 MEEK or 0,35 MEUR (7,6 MEEK or 0,49 EUR in the first half of 2002). Non-trade receivables include the unpaid dividend of Keila Kaabel in the amount of 1,5 MEEK or 97 TEUR. The prepaid VAT of the Estonian companies of the Group and the prepaid import VAT have increased by 2,5 MEEK or 0,16 MEUR over the six months. Experience has shown that accounts receivable and inventories increase by the end of the first half-year due to seasonal reasons. To ensure smooth business operation, larger inventories are stored for the holiday period.

On the side of liabilities, accounts payable have increased by 11 MEEK or 0,68 MEUR (14 MEEK or 0,9 MEUR in the first half of 2002), which is caused by larger purchase invoices of production inventories in June, on the one hand, and by the fact that investments in the amount of 18,2 MEEK or 1,2 MEUR of an investment total of 26,8 MEEK or 1,7 MEUR were made in the second quarter, on the other hand. Accounts payable for construction, including VAT, amounted to 5,8 MEEK or 0,36 MEUR in the total accounts payable. Owners’ equity comprised 77,4% of the assets (67,2% as at 30 June 2002), having increased by 54 MEEK or 3,5 MEUR over the half-year.

Personnel

The average number of employees in the group was 285 (H1 2002: 634). As of the balance sheet date 30.06.03 the group employed 296 persons (645 in 2002). The indicators of 2002 include the number of employees of the cable harnesses factory.

Important events

In January, Harju Elekter submitted an application to transfer the shares of the company into the main list of the Tallinn Stock Exchange. The application was satisfied and the shares of the company (HAE1T) are traded in the main list of the Tallinn Stock Exchange as from 17 February 2003.

The AGM of the shareholders took place on April 11. The general meeting decided to pay dividends to the owners at the rate of 2,00 EEK (0,13 EUR) per share. Dividends paid to the shareholders on May 9, 2003.

In April, AS Harju Elekter acquired a long-term loan from a Finnish bank in the amount of 1 million EUR (15,6 MEEK). The loan is repayable within 8 years. Loan money is used for the construction of a new production hall within the framework of the extension of PKC Eesti.

The shareholders of AS Keila Kaabel, a related company of Harju Elekter, decided that a factory extension project would be launched. Construction work began in June, and the final deadline on the end of this year. According to the business plan, the sales of the factory would double in the next two years, when the project has been implemented.

Harju Elekter will invest 18 MEEK (1,15 MEUR) in the building extension for the larger production facilities. Draka NK Cables will provide the equipment and related know-how. The equipment cost 21 MEEK (1,35 MEUR).

Andres Allikmäe
Chairman of the Board
+372 6 747 400

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BALANCE SHEETS

BALANCE SHEET OF THE GROUP, 30.06.2003
Consolidated, unaudited

in thousand

EEK

EUR

ASSETS

30.06.03

31.12.02

30.06.03

31.12.02

Cash, bank

7 540

11 620

482

743

Total customer receivables

31 672

28 705

2 024

1 834

Other current receivables

3 828

2 035

245

130

Accrued income

0

14

0

1

Prepaid expenses

3 505

753

224

48

Total current receivables

39 005

31 507

2 493

2 013

Raw materials and inventories

39 982

35 527

2 555

2 271

Goods

5 600

4 616

358

295

Prepayments to suppliers

113

0

7

0

Total inventories

45 695

40 143

2 920

2 566

TOTAL CURRENT ASSETS

92 240

83 270

5 895

5 322

Stock and shares in ass.compani

24 774

26 586

1 583

1 699

Other shares

124 188

70 803

7 937

4 525

Other long-term receivables

76

379

5

24

Total financial investments

149 038

97 768

9 525

6 249

Plant and equipment

78 621

77 556

5 025

4 957

Other equipment and fixtures

48 916

46 385

3 126

2 965

Other inventory

3 510

3 277

224

209

Accumulated depreciation

-39 339

-35 288

-2 514

-2 255

Construction-in-progress

25 970

3 556

1 660

227

Prepayments for fixed assets

460

28

29

2

Total tangible assets

118 138

95 514

7 550

6 104

Licences

1 234

1 206

79

77

Goodwill

0

16

0

1

Total intangible assets

1 234

1 222

79

78

TOTAL NON-CURRENT ASSETS

268 410

194 504

17 155

12 431

TOTAL ASSETS

360 650

277 774

23 050

17 753

LIABILITIES AND OWNERS' EQUITY
Debt obligations

11 404

12 360

729

790

Customer prepayments

331

193

21

12

Supplier payables

33 135

22 438

2 118

1 434

Other short-term borrowings

1 519

1 251

97

80

Tax liabilities

4 124

5 405

264

345

Accrued expenses

8 424

5 869

538

375

Other prepaid revenue

971

0

62

0

TOTAL CURRENT LIABILITIES

59 908

47 516

3 829

3 037

TOTAL NON-CURRENT LIABILITIES

21 425

5 707

1 369

365

TOTAL LIABILITIES

81 333

53 223

5 198

3 402

Share capital

54 000

54 000

3 451

3 451

Restricted reserves

8 600

8 600

550

550

Retained earnings

151 152

108 698

9 661

6 947

Net profit for the year

65 565

53 254

4 190

3 404

TOTAL OWNERS' EQUITY

279 317

224 551

17 852

14 351

TOT.LIABIL. AND OWNERS' EQUITY

360 650

277 774

23 050

17 753

BALANCE SHEET OF THE PARENT COMPANY, 30.06.2003
Consolidated, unaudited

in thousand

EEK

EUR

ASSETS

30.06.03

31.12.02

30.06.03

31.12.02.

Cash, bank

5 365

11 165

343

714

Total customer receivables

15 074

12 075

963

772

Other current receivables

8 235

8 056

526

515

Prepaid expenses

2 914

564

186

36

Total current receivables

26 223

20 694

1 676

1 323

Raw materials and inventories

19 970

16 690

1 276

1 067

Goods

5 552

4 575

355

292

Prepayments to suppliers

27

0

2

0

Total inventories

25 549

21 265

1 633

1 359

TOTAL CURRENT ASSETS

57 137

53 124

3 652

3 395

Stock and shares in subs.-ies

14 198

13 759

907

879

Other long-term receiv.from sub

6 780

6 780

433

433

Stock and shares in associated

24 774

26 587

1 583

1 699

Other shares

124 188

70 803

7 937

4 525

Other long-term receivables

77

379

5

24

Total financial investments

170 017

118 308

10 866

7 561

Plant and equipment

78 494

77 428

5 017

4 949

Other equipment and fixtures

28 258

26 033

1 806

1 664

Other inventory

1 849

1 751

118

112

Accumulated depreciation

-31 538

-28 798

-2 016

-1 841

Construction-in-progress

25 970

3 556

1 660

227

Prepayments for fixed assets

460

28

29

2

Total tangible assets

103 493

79 998

6 614

5 113

Licences

620

750

40

48

Total intangible assets

620

750

40

48

TOTAL NON-CURRENT ASSETS

274 130

199 055

17 520

12 722

TOTAL ASSETS

331 267

252 180

21 172

16 117

LIABILITIES AND OWNERS' EQUITY
Debt obligations

4 437

5 516

284

353

Customer prepayments

283

193

18

12

Supplier payables

21 790

13 501

1 393

863

Other short-term borrowings

1 611

1 269

103

81

Tax liabilities

2 012

2 525

129

161

Accrued expenses

3 782

3 191

242

204

Other prepaid revenue

971

0

62

0

TOTAL CURRENT LIABILITIES

34 887

26 195

2 230

1 674

TOTAL NON-CURRENT LIABILITIES

17 063

1 433

1 091

92

TOTAL LIABILITIES

51 951

27 628

3 320

1 766

Share capital

54 000

54 000

3 451

3 451

Restricted reserves

8 600

8 600

550

550

Retained earnings

151 151

108 698

9 660

6 947

Net profit for the year

65 565

53 254

4 190

3 404

TOTAL OWNERS' EQUITY

279 317

224 551

17 852

14 351

TOT.LIABIL. AND OWNERS' EQUITY

331 267

252 180

21 172

16 117

INCOME STATEMENTS

INCOME STATEMENT OF THE GROUP, H1 2003
Consolidated,unaudited

in thousand

EEK

EUR

H1 2003

H1 2002

H1 2003

H1 2002

NET SALES

149 566

125 172

9 559

8 000

Cost of goods sold

-121 692

-103 905

-7 778

-6 641

Gross profit

27 874

21 267

1 781

1 359

Operating expenses, incl.

-19 660

-14 679

-1 256

-938

Marketing expenses

-7 756

-5 646

-496

-361

Administrative expenses

-11 904

-9 033

-760

-577

Other revenue

42

239

3

15

Other expenses

-376

-339

-24

-21

Operating profit

7 880

6 488

504

415

Financial income and expenses, incl.
-from assoc.companies

1 238

2 357

79

151

-from other holdings

56 884

2 226

3 635

142

-interest expense

-497

-624

-32

-40

-profit/loss from for.exchange

-30

0

-2

0

-other fin.income/expenses

90

84

6

5

Total financial income and exp

57 685

4 043

3 686

258

Profit from normal operations

65 565

10 531

4 190

673

External income

0

726

0

46

Corporate Income tax

0

0

0

0

Net profit for the year

65 565

11 257

4 190

719

Basic earnings per share

12,14

2,08

0,78

0,13

Diluted earnings per share

11,99

2,08

0,77

0,13

INCOME STATEMENT OF THE GROUP, 2003 Q2
Consolidated,unaudited

in thousand

EEK

EUR

Q2 2003

Q2 2002

Q2 2003

Q22002

NET SALES

78 724

72 991

5 031

4 665

Cost of goods sold

-64 551

-61 017

-4 125

-3 900

Gross profit

14 173

11 974

906

765

Operating expenses, incl.

-10 563

-8 158

-675

-521

Marketing expenses

-4 043

-3 059

-258

-195

Administrative expenses

-6 520

-5 099

-417

-326

Other revenue

37

43

2

3

Other expenses

-194

-155

-12

-10

Operating profit

3 453

3 704

221

237

Financial income and expenses, incl.
-from associated companies

1 164

1 577

74

101

-from other holdings

53 398

11

3 413

1

-interest expense

-285

-290

-18

-19

-profit/loss from for.exch.

-14

0

-1

0

-other financial income/expens

32

79

2

5

Total financial income and exp

54 295

1 377

3 470

88

Profit from normal operations

57 748

5 081

3 691

325

External income

0

726

0

46

Corporate Income tax

172

0

11

0

Net profit for the year

57 920

5 807

3 702

371

Basic earnings per share

10,73

1,08

0,69

0,07

Diluted earnings per share

10,59

1,08

0,68

0,07

INCOME STATEMENT OF THE PARENT COMPANY, H1 2003
unaudited

in thousand

EEK

EUR

H1 2003

H1 2002

H1 2003

H1 2002

NET SALES

89 591

92 723

5 726

5 926

Cost of goods sold

-70 798

-75 572

-4 525

-4 830

Gross profit

18 793

17 151

1 201

1 096

Operating expenses, incl.

-11 591

-10 934

-741

-699

Marketing expenses

-4 375

-4 393

-280

-281

Administrative expenses

-7 216

-6 541

-461

-418

Other revenue

59

205

4

13

Other expenses

-314

-256

-20

-16

Operating profit

6 947

6 166

444

394

Financial income and expenses, incl.
-from subsidiaries

376

-3 351

24

-214

-from associated companies

1 238

2 357

79

151

-from other holdings

56 884

2 227

3 636

142

-interest expense

-217

-280

-14

-18

-profit/loss from for.exch.

-15

-12

-1

-1

-other fin.income/expenses

352

111

22

7

Total financial income and exp

58 618

1 052

3 746

67

Profit from normal operations

65 565

7 218

4 190

461

External income

0

4 039

0

258

Net profit for the year

65 565

11 257

4 190

719

Basic earnings per share

12,14

2,08

0,78

0,13

Diluted earnings per share

11,99

2,08

0,77

0,13

INCOME STATEMENT OF THE PARENT COMPANY 2003 Q2
unaudited

in thousand

EEK

EUR

Q2 2003

Q2 2002

Q2 2003

Q2 2002

NET SALES

49 308

48 401

3 151

3 093

Cost of goods sold

-38 857

-38 388

-2 483

-2 453

Gross profit

10 451

10 013

668

640

Operating expenses, incl.

-6 296

-5 849

-403

-374

Marketing expenses

-2 295

-2 527

-147

-162

Administrative expenses

-4 001

-3 322

-256

-212

Other revenue

50

44

3

3

Other expenses

-164

-72

-10

-5

Operating profit

4 041

4 136

258

264

Financial income and expenses, incl.
-from subsidiaries

-665

-3 888

-42

-248

-from associated companies

1 163

1 577

74

101

-from other holdings

53 398

11

3 413

1

-interest expense

-155

-106

-10

-7

-profit/loss from for.exch.

-15

-13

-1

-1

-other fin.income/expenses

153

51

10

3

Total financial income and exp

53 879

-2 368

3 444

-151

Profit from normal operations

57 920

1 768

3 702

113

External income

0

4 039

0

258

Net profit for the year

57 920

5 807

3 702

371

Basic earnings per share

10,73

1,08

0,69

0,07

Diluted earnings per share

10,59

1,08

0,68

0,07

Karin Padjus
Chief accountant
67 47 403

Moonika Vetevool
PR manager
+372 6712 761

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2003-06-12
HARJU ELEKTER

EXTENSION OF RELATED COMPANY OF HARJU ELEKTER

An extraordinary meeting of shareholders of AS Keila Kaabel, a related company of Harju Elekter, was held on 12 June this year, and it was decided that a factory extension project would be launched. According to the business plan, the sales of the factory would double in the next two years, when the project has been implemented.

New equipment will be installed to broaden the product range. The drawing and production lines of copper and aluminium cables will be fully reconstructed. Draka NK Cables will provide the equipment and related know-how. The equipment cost EEK 21m (EUR 1.35m). Harju Elekter will invest EEK 18m (EUR 1.15m) in the building extension for the larger production facilities. Construction work will begin in June, and the final deadline is December 2003. After reconstruction, Keila Kaabel will use 7600 m2 of production area plus over 10,000 m2 of outdoor storage area under a long-term commercial lease contract with Harju Elekter, the owner of the registered immovable.

As a result of the negotiations, the parties agreed that AS Keila Kaabel would issue 200 new shares each to Draka NK Cables to finance the investment and know-how. Harju Elekter will also sell to Draka NK Cables 105 shares of AS Keila Kaabel, the proceeds of which (EEK 8.7m or EUR 556,000) will be invested in the extension of the Keila Kaabel production building. The financial income of Harju Elekter from the sale of the shares will be reflected in the results of the third calendar quarter. After the issue and sale of the shares on 1 July 2003, the share capital of Keila Kaabel will be EEK 26m (EUR 1.66m), which will be divided among the shareholders as follows: 34% Harju Elekter and 66% Draka NK Cables.

After the accession of Estonia and the other Baltic states to the European Union, we expect infrastructure construction to grow sharply and raise demand for the products of Keila Kaabel as the market leader and largest cable factory in the Baltic States. The new technology and know-how and the extended production facility will enable the Keila Kaabel factory to improve productivity and broaden its product range and quality.

AS Keila Kaabel was founded by Harju Elekter and Nokia Kaapeli in 1992 with a share capital of EEK 24m (EUR 1.53m). Sales in 2002 were EEK 331.7m (EUR 21.2m), and net profit was EEK 15.1m (EUR 0.97m). The company employs 67 people; ten new employees will be hired after the extension.

Andres Allikmäe
Chairman of Management Board
Phone +372 674 7400

Further information: Timo Puhakka, Managing Director of NK Cables (phone +358 10 566 3700), and Endel Palla, Chairman of Supervisory Board of Harju Elekter (phone +372 674 7400).

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2003-05-07
FINANCIAL REPORT 1-3/2003 OF HARJU ELEKTER
2003-05-07

FINANCIAL REPORT 1-3/2003 OF HARJU ELEKTER

Sales and revenues

In the first quarter, the economic growth of Estonia was more than expected. Industry demonstrated a good rising trend by 10% growth at the beginning of the year. The building sector continues powerfully. Electricity production has increased by one-third. As a whole, the economic growth has been more then double compared to the first quarter of the previous year.

The consolidated net sales of Harju Elekter Group for Q1 2003 amounted to 70,8 MEEK or 4,5 MEUR(Q1 2002: 52,2 MEEK e. 3,3 MEUR). Compared to the same period last year,the company's turnover grew by 35,8%. Sales on the domestic market grew by 30,0%, thus accounting for 50,7% (Q1 2002: 53,0%) of the consolidated net sales. Export sales amounted to 34,9 MEEK or 2,2 MEUR(Q1 2002: 24,5 MEEK e. 1,6 MEUR), which is 42,4% more than for the same period last year. Sales on the Finnish market increased 56,6%, of which 40,3% was attributable to the sales of the Finnish subsidiary acquired in Sept.2002.

In the Estonian enterprises of the group, the total sales of the accounting quarter form 95,5% of the level of the previous year. However, the income of the first quarter of 2002 includes the sale of products and services of the cable harnesses factory amounting to 29,3% of the group’s sales of the period, that is 15,3 MEEK (979 TEUR). Apart from the sales of the cable harnesses factory in the first quarter of 2002, the comparable sales growth of the Estonian enterprises would be 35,2%.

Profit

The Group's operating profit was 4,4 MEEK or 283 TEUR (Q1 2002: 2,8 MEEK or 178 TEUR). The Group's return on sales settled at 6,3% (Q1 2002: 5,3%).

Financial income was 3,4 MEEK or 217 TEUR (Q1 2002: 2,7 MEEK or 171 TEUR). PKC Group paid dividends for the year 2002 in an amount of 4,6 MEEK (291 TEUR), which is over two times more than in the previous year (1Q 2002: 2,1 MEEK or 132 TEUR). A loss of 1 072 TEUR (69 TEUR) occurred as of 31 March 2003 due to the revaluation of the PKC Group Oyj shares.

In total, the Group's net profit for the 1st quarter of 2003 was 7,6 MEEK or 489 TEUR (Q1 2002: 5,5 MEEK or 348 TEUR. Net profit margin settled at 10,8% (Q1 2002:10,4%). EPS was 1,42 EEK or 0,09 EUR (Q1 2002:1,01 EEK or 0,06 EUR).

Cash flow, investments and capital employed Cash flow from operating activities was 4,9 MEEK or 315 TEUR (Q1 2002: 3,7 MEEK or 238 TEUR), outflow due to investing activities 1,3 MEEK or 85 TEUR (Q1 2002: 0,2 MEEK or 14 TEUR) and financing activities 2,3 MEEK or 148 TEUR (Q1 2002: 2,1 MEEK or 136 TEUR). During the quarter cash balance on hand and in bank increased by 1,3 MEEK or 82 TEUR (Q1 2002: 1,4 MEEK or 88 TEUR).

During the accounting period the Group invested 8,6 MEEK or 550 TEUR in tangible and intangible fixed assets (Q1 2002: 3,1 MEEK or 199 TEUR). Investments in plant and technology were 2,0 MEEK or 127 TEUR (Q1 2002: 1,1 MEEK or 68 TEUR), into the buildings and reconstructions 6,4 MEEK or 409 TEUR (Q1 2002: 1,0 MEEK or 66 TEUR).

In the accounting quarter, AS Harju Elekter purchased 9 thousand shares of PKC Group Oyj and paid 1 061 TEEK (68 TEUR) for the investment. After this acquisition, Harju Elekter owns 12% of the shares of PKC Group.

AS Harju Elekter obtained production equipment for the price of 1,4 MEEK (89 TEUR) on the basis of a financial lease contract. Long-term loan and capital lease repayments during the accounting period accounted for 2,3 MEEK or 148 TEUR (Q1 2002: 2,1 MEEK or 136 TEUR).

Balance sheet

In accordance with the new Accounting Act of the Republic of Estonia and new standards of the Estonian Accounting Standards Board, which entered into force on 1 January 2003, Harju Elekter Group changed the accounting method of financial instruments. As from 2003, financial instruments are recorded in the balance sheet using the method of fair value. Financial investments (shares of PKC Group Oyj) in the balance sheet as of 31 December 2002 were adjusted to their market value according to the rate of the last trading day of 2002. The difference between the fair value and balance sheet value arising from the revaluation was 53,9 MEEK (3 511 TEUR), by which the opening balance of retained earnings under the owners’ equity and the opening balance of other long-term shares under long-term financial investments were increased. As a result, the proportion of owners’ equity increased in the balance sheet from 76,2% to 80,8% as of 31 December 2002 and fixed assets increased from 62,8% to 70,0% in the adjusted opening balance sheet of 2003. As of 31 March 2003, fixed assets formed and owners’ equity formed 69,9% and 80,8% of the consolidated balance sheet total, respectively.

Personnel

The average number of employees in the group was 280 (Q1 2002: 633). As of the balance sheet date 31.03.03 the group employed 291 persons (645 in 2002). The indicators of 2002 include the number of employees of the cable harnesses factory.

Important events

In January, Harju Elekter submitted an application to transfer the shares of the company into the main list of the Tallinn Stock Exchange. The application was satisfied and the shares of the company (HAE1T) are traded in the main list of the Tallinn Stock Exchange as from 17 February 2003. On 31 March, the closing price of the share was 58,67 EEK (3,75 EEK).

Post-balance-sheet events

The AGM of the shareholders took place on April 11. The general meeting decided to pay dividends to the owners at the rate of 2,00 EEK (0,13 EUR) per share. Dividends shall be distributed to the shareholders on May 12, 2003.

In April, AS Harju Elekter acquired a long-term loan from a Finnish bank in the amount of 1 MEUR (15,6 MEEK). The loan is repayable within 8 years. According to the agreement between the parties, the interest of the loan is not made public. Loan money is used for the construction of a new production hall within the framework of the extension of PKC Eesti. The total cost of the project is 26 MEEK (1,7 MEUR) and own funds will be used for financing in addition to the loan. PKC Eesti, the former cable harnesses factory of Harju Elekter, leases production premises from Harju Elekter from July 2002. Today, Harju Elekter leases a total of 13 400 m2 to PKC Eesti, including 4 700 m2 in Haapsalu. By launching the new production hall in July 2003, another 4 500 m2 of leased premises will be added in Keila.

Andres Allikmäe
Chairman of the Management Board
+372 6 747 400

BALANCE SHEETS

BALANCE SHEET OF THE GROUP, 31.03.2003

Consolidated, unaudited

in thousand

EEK

EUR

ASSETS

31.03.03

31.12.02

31.03.03

31.12.02

Cash, bank 12 882 11 620 823 743
Total customer receivables 27 149 28 705 1 735 1 835
Other current receivables 2 306 2 035 147 130
Accrued income 2 14 0 1
Prepaid expenses 1 514 753 97 48
Total current receivables 30 971 31 507 1 979 2 014
Raw materials and inventories 36 943 35 527 2 361 2 271
Goods 5 573 4 616 356 295
Prepayments to suppliers 8 0 1 0
Total inventories 42 525 40 142 2 718 2 566
TOTAL CURRENT ASSETS 86 378 83 270 5 521 5 322
Stock and shares in ass.comp. 26 661 26 587 1 704 1 699
Other shares 70 791 70 803 4 524 4 525
Other long-term receivables 379 379 24 24
Total financial investments 97 831 97 768 6 253 6 249
Plant and equipment 78 621 77 556 5 025 4 957
Other equipment and fixtures 48 371 46 385 3 092 2 965
Other inventory 3 378 3 277 216 209
Accumulated depreciation -37 361 -35 288 -2 388 -2 255
Construction-in-progress 8 898 3 556 569 227
Prepayments for fixed assets 151 28 10 2
Total tangible assets 102 059 95 514 6 523 6 104
Licences 1 111 1 206 71 77
Goodwill 0 16 0 1
Total intangible assets 1 111 1 222 71 78
TOTAL NON-CURRENT ASSETS 201 001 194 505 12 846 12 431
TOTAL ASSETS 287 379 277 774 18 367 17 753
LIABILITIES AND OWNERS' EQUITY        
Debt obligations 10 346 12 360 661 790
Customer prepayments 144 193 9 12
Supplier payables 25 006 22 438 1 598 1 434
Other short-term borrowings 1 274 1 251 81 80
Tax liabilities 3 121 5 405 199 345
Accrued expenses 7 543 5 869 482 375
Other prepaid revenue 971 0 62 0
TOTAL CURRENT LIABILITIES 48 405 47 516 3 094 3 037
TOTAL NON-CURRENT LIABILITIES 6 778 5 707 433 365
TOTAL LIABILITIES 55 183 53 223 3 527 3 402
Share capital 54 000 54 000 3 451 3 451
Restricted reserves 8 600 8 600 550 550
Retained earnings 161 951 108 698 10 351 6 947
Net profit for the year 7 645 53 254 489 3 404
TOTAL OWNERS' EQUITY 232 196 224 551 14 840 14 351
TOT.LIABIL.AND OWNERS' EQUITY 287 379 277 774 18 367 17 753

BALANCE SHEET OF THE PARENT COMPANY, 31.03.2003
Unaudited

in thousand

EEK

EUR

ASSETS

31.03.03.

31.12.02.

31.03.03.

31.12.01.

Cash, bank 8 889 11 165 568 714
Total customer receivables 13 003 12 075 831 772
Other current receivables 7 855 8 056 502 515
Prepaid expenses 928 564 59 36
Total current receivables 21 786 20 694 1 392 1 323
Raw materials and inventories 20 036 16 690 1 281 1 067
Goods 5 525 4 575 353 292
Prepayments to suppliers 8 0 1 0
Total inventories 25 569 21 265 1 634 1 359
TOTAL CURRENT ASSETS 56 244 53 124 3 595 3 395
Stock and shares in subs. 14 801 13 759 946 879
Other l-term receiv.from subs 6 780 6 780 433 433
Stock and shares in ass.compa 26 661 26 587 1 704 1 699
Other shares 70 791 70 803 4 524 4 525
Other long-term receivables 379 379 24 24
Total financial investments 119 412 118 308 7 632 7 561
Plant and equipment 78 494 77 428 5 017 4 949
Other equipment and fixtures 27 930 26 033 1 785 1 664
Other inventory 1 761 1 751 113 112
Accumulated depreciation -30 216 -28 798 -1 931 -1 841
Construction-in-progress 8 898 3 556 569 227
Prepayments for fixed assets 151 28 10 2
Total tangible assets 87 019 79 998 5 562 5 113
Licences 685 750 44 48
Total intangible assets 685 750 44 48
TOTAL NON-CURRENT ASSETS 207 115 199 055 13 237 12 722
TOTAL ASSETS 263 359 252 180 16 832 16 117
LIABILITIES AND OWNERS' EQUITY        
Debt obligations 4 209 5 516 269 353
Customer prepayments 97 193 6 12
Supplier payables 17 247 13 501 1 102 863
Other short-term borrowings 1 476 1 269 94 81
Tax liabilities 1 041 2 525 67 161
Accrued expenses 3 618 3 191 231 204
Other prepaid revenue 971 0 62 0
TOTAL CURRENT LIABILITIES 28 659 26 195 1 832 1 674
TOTAL NON-CURRENT LIABILITIES 2 505 1 433 160 92
TOTAL LIABILITIES 31 163 27 628 1 992 1 766
Share capital 54 000 54 000 3 451 3 451
Restricted reserves 8 600 8 600 550 550
Retained earnings 161 951 108 698 10 351 6 947
Net profit for the year 7 645 53 254 489 3 404
TOTAL OWNERS' EQUITY 232 196 224 551 14 840 14 351
TOT.LIABIL. AND OWNERS' EQUIT 263 359 252 180 16 832 16 117

INCOME STATEMENTS

INCOME STATEMENT OF THE GROUP, 2003 Q1
Consolidated,unaudited

thousand

EEK

EUR

 

Q1 03

Q1 02

Q1 03

Q1 02

Net sales 70 842 52 181 4 528 3 335
Cost of goods sold -57 140 -42 888 -3 652 -2 741
         
Gross profit 13 702 9 293 876 594
Operating expences, incl. -9 096 -6 521 -581 -417
marketing expences -3 713 -2 586 -237 -165
admin. and general expences -5 384 -3 935 -344 -251
Other operating revenue 5 196 0 13
Other operating charges -183 -184 -12 -12
Operating profit 4 428 2 784 283 178
Fin.incomes and expences, incl.        
- from shares of associated 74 780 5 50
- from other investments 3 486 2 216 223 142
- interest expenses -212 -334 -14 -21
- profit/loss from foreign e -16      
- other fin.expences/incomes 58 5 4 0
Total fin.incomes and expence 3 390 2 666 217 170
Profit from the ord.activitie 7 818 5 450 500 348
Tax -173 0 -11 0
Net profit for the current pe 7 645 5 450 489 348
Basic earning per share 1,42 1,01 0,09 0,06
Diluted earning per share 1,40 1,01 0,09 0,06

INCOME STATEMENT OF THE PARENT COMPANY, 2003 Q1
unaudited

thousand EEK

EUR

 

Q1 03

Q1 02

Q1 03

Q1 02

Net sales 40 283 44 322 2 575 2 833
Cost of goods sold -31 913 -37 184 -2 040 -2 376
Gross profit 8 370 7 139 535 456
Operating expences, incl. -5 323 -5 085 -340 -325
marketing expences -2 089 -1 866 -133 -119
admin. and general expences -3 234 -3 219 -207 -206
Other operating revenue 10 160 1 10
Other operating charges -150 -183 -10 -12
Operating profit 2 907 2 032 186 130
Fin.incomes and expenses, incl.        
- from shares of subsidiarie 1 042 536 67 34
- from shares of ass.compani 74 780 5 50
- from other investments 3 486 2 216 223 142
- interest expenses -62 -174 -4 -11
- profit/loss from foreign e 0 0 0 0
- other fin.expences/incomes 198 60    
Total fin.incomes and expense 4 738 3 418 303 218
Profit from the ord.activitie 7 645 5 450 489 348
Net profit for the current pe 7 645 5 450 489 348
Basic earning per share 1,42 1,01 0,09 0,06
Diluted earning per share 1,40 1,01 0,09 0,06

Karin Padjus
Chief Accountant
+372 6 747 403

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2003-04-29
AS HARJU ELEKTER
NOTICENOTICE

LOAN CONTRACT SIGNED

On 29 April 2003, AS Harju Elekter and Sampo Pank Finland concluded a loan contract in the amount of one million euros (EEK 15.6m) with a the repayment deadline of 8 years. The parties have agreed not to disclose the applicable loan interest. The money will be used to build a new production hall within the framework of the expandsioning of the activities of PKC Eesti. The total cost of the project is EEK 26m; own funds willshall be used to cover the portion not provided by the loan.

PKC Eesti, which is the former cable harnesses factory of AS Harju Elekter, has leased production premises from AS Harju Elekter since July 2002. Currently Harju Elekter leases to PKC Eesti premises with a total area of 13,400 m2 of premises, of which 4700 m2 are located in Haapsalu. The commissioning of the new production hall in July 2003 will add another 4500 m2 of leased premises in Keila. In 2002, Harju Elekter earned EEK 12.5m by leasing production and other premises.

Andres Allikmäe
Chairman of Management Board
+372 6 747 400

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2003-04-11
HARJU ELEKTER
NEWS RELEASE

RESOLUTIONS OF ANNUAL GENERAL MEETING OF SHAREHOLDERS

Today, on 11. April 2003 starting at 10 a.m., the annual general meeting of the shareholders of AS Harju Elekter was held at Keskväljak 12, Keila. The general meeting was attended by 94 shareholders and their authorised representatives who represented the total of 3,476,144 votes accounting for 64,37 % of the total votes.

The agenda of the general meeting was as follows:

1. approval of the annual report of AS Harju Elekter of 2002;
2. approval of the distribution of profits;
3. appointment of auditors.

1. Approval of the annual report of AS Harju Elekter of 2002

The general meeting resolved:

1. to approve the annual report of AS Harju Elekter of 2002, prepared by the management board and approved by the supervisory board, according to which the consolidated balance sheet total of AS Harju Elekter was 224,009,386 kroons as of 31.12.2002, incl. the balance sheet total of 198,414,515 kroons of the parent undertaking, while the net profit of the financial year was 53,253,594 kroons.

The number of the votes given in favour of the resolution was 3,472,163,

which accounted for 99.89% of the registered participants.

2. Approval of the distribution of profits

The general meeting resolved:

2. to approve the profit distribution proposal of AS Harju Elekter of 2002 as presented by the management board and as approved by the supervisory board as follows:

retained profit from previous periods on 31.12.2002 54,932,798
net profit of the financial year 53,253,594
total retained profit 108,186,392
to be distributed as dividends 2,00 kroons per share* 10,800,000
incl.net dividends on account of the retained profits of 1994-99 5,955,930
balance of the retained profits after the distribution of profits 97,386,392

The dividends will be paid to the shareholders within one month of this meeting by a transfer to the bank account of the shareholder.
*The list of the shareholders for the payment of dividends will be completed as of 8 a.m. of 28 April 2003.

The number of the votes given in favour of the resolution was 3,472,163, which accounted for 99.89% of the registered participants.

3. Appointment of auditors

The general meeting resolved:
3.1 to appoint AS KPMG Estonia, register code 10096082 to perform the audit of AS Harju Elekter on the years 2003-2005;
3.2 the auditor will be remunerated according to the price list of AS KPMG Estonia and adhering to the economic activities budget, approved by the supervisory board of AS Harju Elekter.

The number of the votes given in favour of the resolution was 3,472,163, which accounted for 99.89% of the registered participants.

Andres Allikmäe
Chairman of Management Board
+372 674 7400

Moonika Vetevool
PR manager
+372 671 2761

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2003-03-11
AS HARJU ELEKTER
ANNOUNCEMENT

ANNUAL GENERAL MEETING OF SHAREHOLDERS

Annual general meeting of Harju Elekter shareholders will be held on 11 April 2003, beginning at 10:00 a.m., at venue of Keila Kultuurikeskus (address: Keskväljak 12, Keila).

The Supervisory Board of the Joint Stock Company Harju Elekter determined the following agenda of the general meeting:

1. Approval to AS Harju Elekter annual report of the year 2002.
2. Approval to profit distribution.
3. Nomination of auditors.

The Management Board shall propose at the shareholders general meeting to pay dividends to the shareholders for 2001 financial year in the amount of 10.8 (2001: 7.56) million kroons or 2.00(2001: 1.40) kroons per share. The shareholders registered in the sherholders’ registry on 28 April 2003 at 8 a.m shall be entitled to dividend.

The annual report of the year 2002 are available for preliminary examination at the company’s secretary on the third floor of Harju Elekter office building in Keila, 31 Paldiski Road and in the Internet, company’s home page www.harjuelekter.ee.

Registration of the participants starts at 9 a.m. For the registration we ask you to take with you an identification document. A representative of shareholder is requested to take with him/her a document certifying their right of representation or a valid copy of the commercial register card.

Andres Allikmäe
Chairman of the Management Board
+372 6747 400

2003-01-16
AS HARJU ELEKTER
ANNOUNCEMENT

APPLICATION FOR TRANSFER TO MAIN LIST

We hereby inform that AS Harju Elekter presented today, on 16.01.2003, to Tallinn Stock Exchange an application for transferring its shares to the TSE main list.

Andres Allikmäe
Chairman of the Management Board
+372 6 747 400

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