We have achieved considerable growth in the consolidated turnover and operating
profit of Harju Elekter Group. The sales revenue of the Group increased 21.0%
and operating profit 20.8%. EPS was EEK 2.81. In attaining our set strategic
objective we expanded the proportion of sales revenue to 59.2% in markets
outside of Estonia. The activities of the Group also expanded across the border
into the Republic of Latvia. Following the demand on the market and investing
into development, we introduced several new products and modifications to the
market, both in the domain of low and medium voltage distribution and
substation assemblies. The business potential achieved enables the continuation
of their successful development in the near future.
million EEK million EUR
Key indicators 2006 2005 2006 2005
Net sales 622.1 513.9 39.8 32.8
Operating profit 45.2 37.5 2.9 2.4
Net profit for the current period 52.0 43.9 3.3 2.8
Included equity holders of
the parent company 47.3 41.7 3.0 2.7
At the end of the period
Total current assets 169.4 163.6 10.8 10.5
Total non-current assets 588.4 532.8 37.6 34.1
Total assets 757.7 696.4 48.4 44.5
Total liabilities 133.7 128.1 8.5 8.2
Total equity 624.1 568.3 39.9 36.3
Included equity holders of
the parent company 605.6 552.2 38.7 35.3
Performance indicators
Net profit growth 13.5% -25.9%
Return of sales 7.3% 7.3%
Net profit margin 7.6% 8.1%
Owners' equity margin 79.9% 79.3%
Average number of employees 439 412
EPS 2.81 EEK 2.48 EEK 0.18 EUR 0.16 EUR
In 2006 the consolidated sales revenue of the Group was MEEK 622.1 (513.9) or
MEUR 39.8 (32.8), having increased by 21.0% or MEEK 108.2 (MEUR 7.0) compared
to the same period last year. The consolidated sales revenue of the IV quarter
of 2006 was MEEK 167.1 (155.0) or MEUR 10.7 (9.9) and this year's increase over
last year's figures was 7.8%.
In 2006 the largest contribution to the growth in sales revenue came from the
Finnish segment. The sales revenue of Satamatic Oy was MEEK 198.1 (MEUR 12.7),
a growth of MEEK 58.4 (MEUR 3.7) compared to the previous year. Growth in the
respective sector of the economy, and excellent work by the sales team, offered
considerable support to the increase in turnover, resulting in the enterprise
becoming a well-known and accepted producer of electrical appliances in
Finland. The purchase of a manufacturing plant in April 2006 in Kerava, near
Helsinki, also had a certain impact in the growth of sales revenue.
In 2006, the largest relative increase in sales revenue (75.5%) originated in
the Lithuanian segment. The revenue of the enterprises in Lithuania, which came
from clients outside the Group, increased by MEEK 48.9 ( MEUR 3.1) and reached
MEEK 113.6 (MEUR 7.3). The activity of the subsidiary Rifas benefited from the
growing economy in Lithuania, and also from excellent work by the sales team,
together with successful general contracting projects within several major
projects.
In the IV quarter the strongest contribution to the sales revenue originated
from the enterprises in the Estonian segment. The total sales revenue for
Estonian businesses, derived from clients outside the Group, increased by MEEK
13.3 (MEUR 0.9), reaching MEEK 89.0 (MEUR 5.7), providing 53.3% (48.9%) of the
consolidated sales revenue in the IV quarter. The main reasons for this growth
are the sale of kiosk substations and primary distribution switch gears for
medium voltage networks on the home market. In the IV quarter, as compared to
the same period last year, sales to retail clients and electric installation
companies in Estonia increased by MEEK 4.0 (MEUR 0.3), reaching MEEK 18.7
(14.7) or MEUR 1.2 (0.9), which accounts for 11.2% (9.5%) of the consolidated
sales revenue in the last quarter. In conclusion, sales to the Estonian market
in the last quarter of the year increased by MEEK 15.7 (MEUR 1.0) or 25.9%.
The average number of employees per year was 439 (412) and the employment
expenses were MEEK 86.6 (73.9) or MEUR 5.5 (4.7). In the IV quarter the average
number of employees in the Group was 430 (414) and the employment expenses were
MEEK 26.3 (24.3) or MEUR 1.7 (1.6). This year the labour costs increased by
19.6%, reaching MEEK 117.4 (98.2) or MEUR 7.5 (6.3), mainly related to the
growth in the number of employees and to wage increases. As of the end of the
year there were 427 (425) employees in the Group. In November the subsidiary
Rifas UAB (Lithuania) sold its holding of 50.26 % in Biržu Montuotojas UAB, a
subsidiary operating in the construction segment. As of October 31, there were
34 employees in the company.
The operating profit in the IV quarter was MEEK 12.5 (8.9) or MEUR 0.8 (0.6)
and the growth was 40.7%. The turnover in profitability for the quarter was
7.5% (5.7%). In conclusion, the operating profit for the 12 months was MEEK
45.2 (37.5) or MEUR 3.0 (2.4) and the growth, compared to the previous year,
was 20.4%. The turnover in profitability was 7.3% (7.3%).
In conclusion, the consolidated net profit in 2006 was MEEK 52.0 (43.9) or MEUR
3.3 (2.7), of which the share belonging to the owners of the parent company was
MEEK 47.3 (41.7) or MEUR 3.0 (2.7). EPS was EEK 2.81(2.48) or EUR 0.18 (0.16).
The company's balance sheet total increased during 12 months 2006 by MEEK 61,3
(MEUR 3.9), reaching MEEK 757,7 (MEUR 48.4). Cash in bank accounts decreased
over a period of 12 months by MEEK 19,2 (MEUR 1.2) to MEEK 6,7 (MEUR 0.4).
An increase in the volume of sales orders gave rise to an 10,4% increase in
reserves, amounting to MEEK 79.0 (MEUR 5.1), mainly on account of the reserves
of ready-to-use products and intermediate products, and it also gave rise to an
increase in suppliers' arrears on the customers' and liability side by MEEK
14.2 (MEUR 0.9) as regards receivables, and by MEEK 11.2 (MEUR 0.7) on the
liability side, respectively. In total, current assets increased by MEEK 5.7 to
MEEK 169.4 or MEUR 0.4 to MEUR 10.8, and current liabilities increased by MEEK
8.4 to MEEK 106.6 or MEUR 0.5 to MEUR 6.8) since the beginning of the year.
Interest-bearing debt obligations have decreased by MEEK 4.1 (MEUR 0.3) during
the year.
The price of the shares of PKC Group Oy closed on 31 December 2006, at the
level of EUR 12.24 (EEK 191.51), showing an increase of EUR 1.34 (EEK 20.97)
within the year 2006, which was the reason that accounting cost for financial
assets increased MEEK 37.7 (MEUR 2.4) during the year and reached MEEK 344.7
(MEUR 37.6). Unrealised profit from the revaluation of the shares was reflected
directly in the equity capital and reserves. The equity capital belonging to
the parent undertaking increased by MEEK 53.4 (MEUR 3.4) and reached MEEK 605.6
(MEUR 38.7).
Andres Allikmäe
Chairman of the Board
+372 674 7400
For more information: interim report of Q4 and 1-12/2006 or Mrs Karin Padjus,
Member of the Board (ph +372 674 7400).
AS HARJU ELEKTER
BALANCE SHEET, 31.12.2006
Consolidated, unaudited
Group
in thousands EEK EUR
ASSETS 31.12.0631.12.0531.12.06 31.12.05
Cash and cash equivalents 6 712 25 940 429 1 658
Trade receivables 78 652 64 444 5 027 4 119
Other receivables and prepayments 4 943 4 353 316 278
Inclusive income tax 2 21 0 1
Inventories 79 045 68 877 5 052 4 402
TOTAL CURRENT ASSETS 169 352 163 614 10 824 10 457
Investments in associates 25 187 24 773 1610 1 583
Other long-term financial investment 344 884 312 103 22 042 19 947
Investment property 127 268 123 625 8 134 7 901
Property, plant and equipment 87 656 70 731 5 602 4 521
Intangible assets 3 384 1 560 216 100
Total non-current assets 588 379 532 792 37 604 34 052
TOTAL ASSETS 757 731 696 406 48 428 44 509
LIABILITIES AND OWNERS' EQUITY
Interest-bearing loans and borrowing 20 736 22 017 1 326 1 407
Advances from customers 1 955 9 569 125 611
Trade payables 53 021 41 870 3 388 2 676
Tax liabilities 12 375 9 319 791 596
Inclusive income tax 2 401 298 153 19
Accrued expenses 17 071 14 281 1 091 913
Other payables 1 442 1 138 92 73
TOTAL CURRENT LIABILITIES 106 600 98 194 6 813 6 276
NON-CURRENT LIABILITIES 27 073 29 879 1 730 1 910
TOTAL LIABILITIES 133 673 128 073 8 543 8 186
Share capital 168 000 168 000 10 737 10 737
Paid-in capital over/under par 6 000 6 000 384 384
Restricted reserves 331 552 296 126 21 190 18 926
Retained earnings 100 077 82 069 6 396 5 245
TOTAL OWNERS' EQUITY 605 629 552 195 38 707 35 292
Minority interests 18 429 16 138 1 178 1 031
TOT.LIABILIT.AND OWNERS' EQUITY 757 731 696 406 48 428 44 509
INCOME STATEMENT, 1-12/2006
Consolidated,unaudited
EEK'000
GROUP Q4 2006 Q4 2005 1-12/2006 1-12/2005
NET SALES 167 132 155 013 622 087 513 936
Cost of goods sold -135 284-127 435 -510 152 -414 503
Gross profit 31 848 27 578 111 935 99 433
Marketing expenses -8 226 -7 663 -27 156 -24 163
Administrative expenses -10 696 -10 892 -39 490 -37 430
Other revenue 16 199 667 601
Other expenses -442 -336 -782 -925
Operating profit 12 500 8 886 45 174 37 516
Net financial incomes/expenses -1 319 -387 15 340 8 852
Income from subsidiaries -544 371 1 723 1 231
Profit from normal operations 10 637 8 870 62 237 47 599
Corporate Income tax -2 837 -525 -10 195 -3 691
Profit after taxes, incl 7 800 8 345 52 042 43 908
Minority interest 1 438 1 163 4 754 2 252
Net profit for the year 6 362 7 182 47 288 41 656
Basic and diluted
earnings per share 0,38 0,43 2,81 2,48
EUR'000
GROUP Q4 2006 Q4 2005 1-12/2006 1-12/2005
NET SALES 10 682 9 907 39 759 32 847
Cost of goods sold -8 647 -8 144 -32 605 -26 492
Gross profit 2 035 1 763 7 154 6 355
Marketing expenses -525 -490 -1 736 -1 544
Administrative expenses -684 -696 -2 524 -2 392
Other revenue 1 12 43 38
Other expenses -28 -21 -50 -59
Operating profit 799 568 2 887 2 398
Net financial incomes/expenses -84 -25 980 565
Income from subsidiaries -35 24 111 79
Profit from normal operations 680 567 3 978 3 042
Corporate Income tax -181 -34 -652 -236
Profit after taxes, incl 499 533 3 326 2 806
Minority interest 92 74 304 144
Net profit for the year 407 459 3 022 2 662
Basic and diluted
earnings per share 0,04 0,03 0,18 0,16
Karin Padjus
Financial Director
+372 674 7403