Harju Elekter’s revenue for the first quarter was 37.4 million euros, which is 20% less than in the same period last year. At the same time, operating profit was 2.8 million euros, which is 186% more than in the comparable period. The improvement in operating profit was driven by a number of targeted actions to improve low season profitability, including lower than usual labour costs in the first quarter.
At the same time, net profit was 2.6 million euros, which is 630% more than in the comparable period. The result was impacted significantly by the notable change in the EUR/SEK exchange rate towards the stronger Swedish krona and the resulting revaluation of receivables and liabilities.
Although the Group’s financial results showed signs of improvement, the economic environment is once again full of challenges. This will be influenced by internal political developments in the countries in which we operate, as well as by the overall transformation of world politics. Controversial news from the United States and frequent changes of direction increase customer uncertainty, resulting in many orders being delayed or temporarily put on hold. The Baltic and Scandinavian economies have not yet returned to stable growth, while the tax burden is increasing, and wages are rising.
Despite the turbulent times, we are going into the peak season with a strong order book. Restructuring and organisational changes in recent years have helped to set the cost base, both in terms of overhead and labour costs, in line with expected volumes, while at the same time striving to maintain competence in low seasons.
2025 has the potential to be a strong financial year, which in turn will enable the continuation of the development strategy and support sustainable growth in the coming periods.
Revenue and financial results
Although the decline in first quarter revenue compared to last year’s record sales volumes is noticeable, seasonality in turnover remained at a similar level to before the period of exceptional results. The revenue from the sale of electrical equipment amounted to 34.1 million euros in the quarter, or 91.1% of total revenue, decreasing by 21.6% compared to the same period last year. The main product and service groups continued to be substations, low-voltage distribution equipment, technical buildings, and subcontracting and engineering services.
| Key indicators |
| 3M | 3M | +/-
| ||
| (EUR´000) | 2025 | 2024 | ||||
| Revenue | 37,427 | 46,775 | -20.0% | |||
| Gross profit | 5,667 | 4,836 | 17.2% | |||
| EBITDA | 3,866 | 1,941 | 99.2% | |||
| Operating profit (EBIT) | 2,795 | 976 | 186.4% | |||
| Profit for the period | 2,636 | 361 | 630.2% | |||
| Earnings per share (EPS) (euros) | 0.14 | 0.02 | 600.0% |
Operating expenses for the reporting quarter totaled 35.6 (Q1 2024: 45.7) million euros, which is 22% less than the previous year. The decrease in expenses was mainly due to the cost of sales, which fell to 31.8 (Q1 2024: 41.9) million euros, a reduction of 24.3%. This was achieved through adjustments in production volumes and better cost management regarding input prices and supply solutions. Distribution costs were 1.3 (Q1 2024: 1.2) million euros, accounting for 3.6% (Q1 2024: 2.6%) of the Group’s operating expenses and 3.4% (Q1 2024: 2.6%) of revenue. The increase in costs has been necessary to maintain revenue, strengthen customer relationships, and secure new contracts. Administrative expenses were 2.6 (Q1 2024: 2.5) million euros, accounting for 7.2% (Q1 2024: 5.5%) of the Group’s operating expenses for the reporting quarter and 6.9% (Q1 2024: 5.4%) of revenue.
Depreciation expenses for fixed assets amounted to 1.1 (Q1 2024: 1.0) million euros in the quarter. A slight increase in costs was expected, reflecting the continued impact of previous investments. Labour costs for the quarter were 9.5 (Q1 2024: 10.1) million euros, which is 5.2% less than a year earlier. The cost savings resulted from adjustments in the number of employees in production units in Estonia, Finland, and Lithuania. However, the share of labour costs in revenue increased to 25.5% (Q1 2024: 21.5%).
The gross profit for the first quarter was 5.7 (Q1 2024: 4.8) million euros, with a gross profit margin of 15.1% (Q1 2024: 10.3%). Operating profit (EBIT) was 2.8 (Q1 2024: 1.0) million euros, and the operating margin was 7.5% (Q1 2024: 2.1%). Net profit for the first quarter was 2.6 (Q1 2024: 0.4) million euros. Earnings per share for the first quarter were 0.14 (Q1 2024: 0.02) euros.
Core business and markets
The Group’s revenue for the first quarter of 2025 by markets reflected the overall downward trend in most key markets compared to the same period in 2024. The Group’s four largest target markets – Estonia, Finland, Sweden, and Norway – accounted for a total of 79% of the total quarterly revenue, which is 2 percentage points less than a year earlier.
In Estonia, revenue reached 4.8 (Q1 2024: 4.5) million euros, growing by 7.4% and accounting for 12.8% (Q1 2024: 9.6%) of the Group’s total quarterly revenue. Sales were supported by an increase in orders for compact substations from electricity distribution network customers. Rental income in the real estate segment remained at the same level as the previous year.
The Finnish market continued to be the largest for the Group in the quarter, despite revenues decreasing by 24.1% to 12.9 (Q1 2024: 17.0) million euros. The main reason for the decline was the decrease in the sale of compact substations and the decline in contractual manufacturing volumes.
Revenue in the Norwegian market fell to 6.9 (Q1 2024: 9.3) million euros, decreasing by 26.2% compared to the previous year. The decline was mainly due to the high comparison base from the previous year, when Norwegian revenue was significantly higher. The market downturn also contributed to the decline, resulting in smaller contractual manufacturing new order volumes in 2024 for 2025.
Revenue in the Swedish market decreased by 28.5%, reaching 4.9 (Q1 2024: 6.9) million euros, which was similar to the level of the fourth quarter of 2024. The decline was influenced by a business model change, where the offering of EPC (Turnkey solutions) projects was discontinued. Now focusing on factory-made solutions, sales volume is temporarily smaller, but the company’s risk profile is more stable.
As a significant positive change, the Germany market grew, with revenue tripling due to increased project-based orders in the substation product group, reaching 6.5 (Q1 2024: 2.2) million euros.
Investments
The Group invested a total of 0.8 (Q1 2024: 0.7) million euros in non-current assets during the reporting period, including 0.1 (Q1 2024: 0.4) million euros in investment properties, 0.3 (Q1 2024: 0.1) million euros in property, plant, and equipment, and 0.4 (Q1 2024: 0.2) million euros in intangible fixed assets. Investments included the acquisition of production technology assets and the development of production and process management systems. Investments also included product development.
The value of the Group’s long-term financial investments was 27.7 (31.12.24: 27.7) million euros as of the reporting date. During the reporting quarter, the fair value of remaining securities decreased by 5 thousand euros and proceeds from the sale of listed securities amounted to 17 thousand euros.
Share
The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.67 euros.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Unaudited
| (EUR´000) | 31.03.2025 | 31.12.2024 | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 1,556 | 3,773 | |
| Trade and other receivables | 38,351 | 29,606 | |
| Prepayments | 2,270 | 2,096 | |
| Inventories | 27,308 | 19,845 | |
| Total current assets | 69,485 | 55,320 | |
| Non-current assets | |||
| Deferred income tax assets | 597 | 687 | |
| Non-current financial investments | 27,708 | 27,717 | |
| Investment properties | 29,198 | 29,432 | |
| Property, plant, and equipment | 32,706 | 32,420 | |
| Intangible assets | 8,429 | 8,121 | |
| Total non-current assets | 98,638 | 98,377 | |
| TOTAL ASSETS | 168,123 | 153,697 | |
| LIABILITIES AND EQUITY | |||
| Liabilities | |||
| Borrowings | 10,500 | 9,839 | |
| Prepayments from customers | 13,181 | 11,600 | |
| Trade and other payables | 26,657 | 17,472 | |
| Tax liabilities | 3,887 | 3,260 | |
| Current provisions | 588 | 270 | |
| Total current liabilities | 54,813 | 42,441 | |
| Borrowings | 20,183 | 20,184 | |
| Other non-current liabilities | 40 | 39 | |
| Total non-current liabilities | 20,223 | 20,223 | |
| Total liabilities | 75,036 | 62,664 | |
| Equity | |||
| Share capital | 11,655 | 11,655 | |
| Share premium | 3,306 | 3,306 | |
| Reserves | 22,734 | 23,135 | |
| Retained earnings | 55,392 | 52,937 | |
| Total equity attributable to the owners of the parent company | 93,087 | 91,033 | |
| TOTAL LIABILITIES AND EQUITY | 168,123 | 153,697 |
CONSOLIDATED STATEMENT OF PROFIT AND LOSS
| (EUR´000)
| |||||
| 3M 2025 | 3M 2024 | ||||
| Revenue | 37,427 | 46,775 | |||
| Cost of sales | -31,760 | -41,939 | |||
| Gross profit | 5,667 | 4,836 | |||
| Distribution costs | -1,285 | -1,195 | |||
| Administrative expenses | -2,580 | -2,517 | |||
| Other income | 1,024 | 19 | |||
| Other expenses | -31 | -167 | |||
| Operating profit | 2,795 | 976 | |||
| Finance income | 633 | 92 | |||
| Finance costs | -284 | -590 | |||
| Profit before tax | 3,144 | 478 | |||
| Income tax | -508 | -117 | |||
| Profit for the period | 2,636 | 361 | |||
| Earnings per share | |||||
| Basic earnings per share (euros) | 0.14 | 0.02 | |||
| Diluted earnings per share (euros) | 0.14 | 0.02 | |||
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
| (EUR´000) | 3M 2025 | 3M 2024 | |
| Profit for the period | 2,636 | 361 | |
| Other comprehensive income | |||
| Items that may be reclassified to profit or loss | |||
| Impact of exchange rate changes of a foreign subsidiaries | -588 | 106 | |
| Items that will not be reclassified to profit or loss | |||
| Revaluation of financial assets | -5 | 70 | |
| Total comprehensive income (-loss) for the period | -593 | 176 | |
| Other comprehensive income | 2,043 | 537 |
Priit Treial
CFO and Member of the Management Board
+372 674 7400
priit.treial@harjuelekter.com
Attachment
- HEG interim report Q1 2025
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