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HAE: Financial results, 1-9/2010

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Harju Elekter                     Quarterly report                    04.11.2010

Financial results, 1-9/2010

The economic results of AS Harju Elekter have exceeded expectations in Q3
2010. We hope for the continuation of positive trends. The consolidated sales
revenue of the Group in the third quarter was 173.7 million kroons (11.1
million euros), which was 44% more than the result of the comparable period
and the operating profit of Q3 2010 14.3 million kroons (920,000 euros),
which was 2.4 times more compared to the Q3 2009. The sales volume for the
nine months dropped in comparison with the reference period by 7.6% to 438.2
million kroons (28.0 million euros).

Key figures                     million EEK            million EUR
                              Q 3       9 months     Q 3      9 months
                          2010   2009  2010  2009 2010  2009  2010  2009
Sales revenue             173.7 120.6 438.2 474.3 11.1   7.7  28.0  30.3
EBITDA                     19.6  11.0  34.4  37.1  1.3   0.7   2.2   2.4
EBIT                       14.3   6.0  18.2  22.2  0.9   0.4   1.2   1.4
Net profit for the period  13.3   6.1  31.5  17.2  0.9   0.4   2.0   1.1
incl equity holders of 
the Parent                 13.2   5.7  31.3  15.4  0.8   0.4   2.0   1.0
EPS (EEK/EUR)              0.78   0.34 1.86  0.92  0.05  0.02  0.12  0.06

The core business of the Group is the production and sales of electrical
distribution systems and control panels, which was the largest share of sales
revenues, almost 90%. The sales revenue on production received from customers
outside of the Group increased by 51% to 156.0 million kroons (10.0 million
euros) in third quarter and were 386.4 million kroons (24.7 million euros) in
9M 2010. This is 8.4% less than in comparable period.

Of the markets, the domestic markets (Estonia, Lithuania and Finland) of the
Group's companies prevailed, where 84.6% (93.6%) of the Group's products and
services were sold. 65% (65%) of Group products were sold outside of Estonia.
In the current year, a sale to other countries has grown up to 67.3 million
kroons (4.3 million euros) in the 9 month period, growing by 22.9 million
kroons (1.5 million euros) year-over-year. France, Czech Republic and
Malaysia have been added as new markets and the Group has sold during the 9M
2010 its products to those markets totally in amount 26.7 million kroons (1.7
million euros). The Group has also sold its products to Latvia, Portugal and
Poland and outside of the European Union to the markets of Belarus, Ukraine,
Russia and Norway.

Sales to the Estonian market increased by 8% within the reporting quarter. At
the same time, the sales revenue from the other geographic segments amounted
to 13.2 million kroons (840,000 euros), which was almost twice as much as in
the reference period. The total operating income of the Estonian segment
increased by 13.1% up to 90.2 million kroons (5.77 million euros) in the
reporting quarter. The main growth resulted from sales to foreign markets,
where 32% (Q3 2009: 28%) of the products were sold. The growth was mainly
achieved owing to an increase in the sales of medium voltage distribution and
outdoor substation units in Finland. The sales revenue of the Estonian
segment within the 9 month period was 196.5 million kroons (12.6 million
euros), decreasing by 9.4% compared to the reference period.

Signs of recovery may be noticed in the Finnish economy, mainly in export.
The domestic investments of Finland during the accounting period were slight
as well as Finnish metallurgical and engineering industry enterprises are
still struggling. Vehicle heating panels for car parks have become a very
good sales article for the Finnish company. In the reporting quarter the
market share of the company increased and the sale of products also
demonstrates a continuing growing trend. In Q3, the sales volume of the
Finnish segment increased by 2.8 times and the 9M 2009 level was outperformed
by 0.9% within the 9 month period. While 99% of the sales revenue was
received from the Finnish market in 2009, it has dropped to 75% in the
current year. The domestic decrease is compensated by the increase in export
to Sweden. As a new market was added Malaysia.

In the reporting quarter, the sales volume of the Lithuanian segment
accounted for 87% and the sales volume within the 9 month period comprised
77% of the results in 9M 2009. In Q3, sales to the Lithuanian market dropped
by one-third compared to the reference period; at the same time, sales to
foreign markets increased by 88%, accounting for 43% of the sales revenue in
Q3 (Q3 2009: 25%). At the same time, in 9 month period, the decline occurred
mainly in foreign markets. In 2009 the Lithuanian company had the large-scale
agreements with Norwegian and Danish clients, what gave 27% from the sales
volumes of the period, this year supplies to those markets have been modest.
Finland, France and the Czech Republic were added as new markets. Almost 80%
of the sales revenue for the 9M 2010 was obtained from Lithuanian customers;
major part here is on several large-scale projects were carried out in local
market in June.

In the third quarter, there was an average of 421 (448) people working in the
Group, included 270 (293) employees in Estonia, 69 (77) employees in
Lithuania and 82 (78) employees in Finland. In 9M 2010, the average number of
employees was 425 (454). As at the balance day on 30 September, there were
440 people working in the Group, whish is 24 employees less than on the
beginning of the year and 31 employees less than a year before. During the
third quarter, labour costs increased by more than 9% compared to the
previous year, reaching 26.5 million kroons (1.69 million euros). During the
nine months period, expenses on staff decreased by more than 7% reaching
101.0 million kroons (6.45 million euros); employees were paid 79.1 million
kroons (5.05 million euros) in salaries, bonuses and compensation, which was
8.4% lower than during the comparable period. The average wage per employee
was 20,650 kroons (1,320 euros) and 21,140 kroons (1,350 euros) in the
compared period.

The gross profit of the Group was 30.3 million kroons (1.94 million euros) in
Q3 2010 and 68.2 million kroons (4.36 million euros) in 9M 2010, increasing
by 36.6% and decreasing 10.9% respectively compared to the same periods last
year. The gross profit margin was 17.5% in Q3 and 15.6% in 9M 2010, which is
1 and 0.9 per cent points lower compared respectively to the same periods
last year. Operating profit of Q3 2010 was 14.3 million kroons (920,000
euros), which was 2.4 times more compared to the Q3 2009. Return of sales for
the period was 8.3% (5.0%). In Q3 2010 EBITDA was 19.6 million kroons or 1.25
million euros, which is 8.7 million kroons (550,000 euros) more than in
comparable quarter; return of sales before depreciation was 11.3% being 2.2
per cent points better. In 9M 2010 EBIT was 18.2 million kroons (1.17 million
euros) and EBITDA was 34.4 million kroons (2.20 million euros); 22.2 million
kroons (1.42 million euros) and 37.1 million kroons (2.41 million euros)
respectively compared to the same periods last year. Return of sales of 9M
2010 was 4.2% (4.7%) and return of sales before depreciation 7.9% (7.8%).

The consolidated net profit of the Q3 2010 was 13.3 million kroons or 850,000
euros (Q3 2009: 6.1 million kroons or 390,000 euros), of which the share of
the owners of the parent company was 13.2 million kroons or 840,000 euros.
EPS of the Q3 was 0.78 kroons or 0.05 euros (Q3 2009: 0.34 kroons or 0.02
euros). The consolidated net profit of the 9M 2010 was 31.5 million kroons
(2.01 million euros), which is 83.6% more than in compared period. The share
of the owners of the parent company was 31.3 million kroons (2.0 million
euros), increasing twice comparing to the 9M 2009. EPS of the reporting
period was 1.86 kroons or 0.12 euros (9M 2009: 0.92 kroons or 0.06 euros).

In 9M 2010 the Group invested in real estate, in tangible fixed assets and in
intangible fixed assets, totally 37.9 million kroons or 2.42 million euros
(9M 2009: 16.8 million kroons or 1.07 million euros).

During 9M 2010 short-term liabilities were increased by 5.8 million kroons
(370,000 euros) up to 18.8 million kroons (1.20 million euros); in the
comparable period short-term liabilities were decreased by 25.4 million
kroons (1.62 million euros) up to 2.5 million kroons (0.16 million euros).
3.3 million kroons or 210,000 euros (9M 2009: 13.8 million kroons or 880,000
euros) worth of a long-term loan and 3.4 million kroons or 220,000 euros (9M
2009: 1.6 million kroons or 100,000 euros) worth of principal amounts of the
financial lease were repaid during the reporting period.

As at September 30 2010 the current assets constituted 29% (34%) and the non-
current assets 71% (66%); and the other side external finance 20% (22%) and
equity 80% (78%) of the balance sheet total.

Andres Allikmäe
Chairman of the Board
+372 674 7400

For more information: Internal report 1-9/2010 of Harju Elekter and Mrs.
Karin Padjus, Member of the Board (phone +372 674 7403).

AS HARJU ELEKTER
BALANCE SHEET, 30.9.2010
Consolidated, unaudited

in thousands                             EEK              EUR
ASSETS                                 30.09.10 31.12.09 30.09.10 31.12.09
Cash and cash equivalents                27 038  35 640    1 728    2 278
Trade receivables and other receivables  89 611  70 238    5 727    4 489
Prepayments                               1 761   2 499      113      160
   Inclusive income tax                   1 180       0       75        0
Inventories                             108 964  79 352    6 964    5 071
TOTAL CURRENT ASSETS                    227 374 187 729   14 532   11 998
Investments in associates                10 560   9 681      676      619
Other long-term financial investments   246 770 153 172   15 771    9 789
Investment property                     137 524 137 176    8 790    8 768
Property, plant and equipment           146 092 124 575    9 337    7 962
Intangible assets                         5 712   5 815      364      371
Total non-current assets                546 658 430 419   34 938   27 509
TOTAL ASSETS                            774 032 618 148   49 470   39 507
LIABILITIES AND OWNERS' EQUITY
Interest-bearing loans and borrowings    20 251  18 166    1 294    1 161
Trade payables and other payables        89 228  75 890    5 703    4 850
Tax liabilities                          12 357  10 367      790      663
   Inclusive income tax                     188     620       12       39
Short-term provision                      1 044   1 157       67       74
Deferred income                               0   1 564        0      100
TOTAL CURRENT LIABILITIES               122 880 107 144    7 854    6 848
NON-CURRENT LIABILITIES                  33 842   7 016    2 163      448
TOTAL LIABILITIES                       156 722 114 160   10 017    7 296
Share capital                           168 000 168 000   10 737   10 737
Paid-in capital over/under par            6 000   6 000      384      384
Restricted reserves                     244 433 149 760   15 621    9 571
Retained earnings                       175 878 156 770   11 241   10 020
TOTAL OWNERS' EQUITY                    594 311 480 530   37 983   30 712
Non-controlling interests                22 999  23 458    1 470    1 499
TOTAL EQUITY                            617 310 503 988   39 453   32 211
TOT.LIABILITIES AND OWNERS' EQUITY      774 032 618 148   49 470   39 507


INCOME STATEMENT,  1-9/2010
Consolidated,unaudited

EEK'000
GROUP                                   Q3 2010 Q3 2009 1-9/2010 1-9/2009
NET SALES                               173 666 120 571  438 241  474 275
Cost of goods sold                     -143 343 -98 370 -370 042 -397 702
Gross profit                             30 323  22 201   68 199   76 573
Marketing expenses                       -6 682  -6 715  -19 842  -22 253
Administrative expenses                  -9 584  -9 700  -30 458  -32 652
Other revenue                               408     376      783    1 038
Other expenses                             -117    -113     -433     -461
Operating profit                         14 348   6 049   18 249   22 245
Net financial incomes/expenses             -208     -30   16 516    7 991
Income/loss(-) from subsidiaries             -9       5      879   -8 121
Profit from normal operations            14 131   6 024   35 644   22 115
Corporate Income tax                       -807      87   -4 133   -4 952
Profit after taxes, incl                 13 324   6 111   31 511   17 163
Attributable to:
    Equity holders of the parent         13 157   5 700   31 304   15 396
    Non-controlling interests               167     411      207    1 767
Basic  earnings per share  (EEK)           0,78    0,34     1,86     0,92
Diluted earnings per share (EEK)           0,78    0,34     1,84     0,92

EUR'000
GROUP                                   Q3 2010 Q3 2009 1-9/2010 1-9/2009
NET SALES                                11 099   7 706   28 009   30 311
Cost of goods sold                       -9 161  -6 287  -23 650  -25 418
Gross profit                              1 938   1 419    4 359    4 893
Marketing expenses                         -427    -429   -1 268   -1 422
Administrative expenses                    -613    -620   -1 947   -2 087
Other revenue                                26      24       50       66
Other expenses                               -7      -7      -28      -29
Operating profit                            917     387    1 166    1 421
Net financial incomes/expenses              -13      -2    1 055      510
Income/loss(-) from subsidiaries             -1       0       57     -519
Profit from normal operations               903     385    2 278    1 412
Corporate Income tax                        -51       6     -264     -316
Profit after taxes, incl                    852     391    2 014    1 096
Attributable to:
    Equity holders of the parent            841     365    2 000      983
    Non-controlling interests                11      26       14      113
Basic earnings per share  (EUR)            0,05    0,02     0,12     0,06
Diluted earnings per share  (EUR)          0,05    0,02     0,12     0,06

Karin Padjus
Financial manager
+372 674 7403



1. he_9m2010_eng.pdf <PDF>
   (https://newsclient.omxgroup.com/cds/DisclosureAttachmentServlet?messageAttachmentId=325004)