Financial results, 1-12/2011

Estonia, 2012-02-28 11:13 CET (GLOBE NEWSWIRE) -- The economic results of AS Harju Elekter in 2011 were as good as expected. As a result of efficient sales work and development, sales revenue increased in all Groups’ companies. In the product portfolio, we managed to increase the share of products with the highest additional value, thus achieving an increase in profitability by one third. According to our estimations, the prognosis for the upcoming periods will also remain positive. We are flexible enough to offer high-quality services and suitable solutions for our clients in today’s market situation.

Over the 12 month period the sales volume of the Group increased by 14.2% to 46.7 million euros, with 5.5 million euros of the 5.8 million euros increase coming from the sales of the Group’s own products. The sales of electrical equipment increased by almost 18% during the year up to 37.9 million euros, accounting for 81% of consolidated sales revenue.

93.5% of the consolidated sales revenue (in 2010: 85%) earned from the domestic markets of the Group in Estonia, Lithuania and Finland. The sales volumes increased the most on the Finnish (29.7%) and Estonian (28.4%) markets; sales to the Lithuanian market remained at the level of 2010. At the same time, the sales revenues of the Lithuanian segment increased by 3.6% in the accounting year to 6 million euros, from which sales to the domestic market formed 67% (in 2010: 72 %). The Lithuanian business significantly increased its sales volumes on the markets of Latvia, Denmark, Poland and Norway; the United States and Brazil were added as new markets.

In Q4, expenses of the operating activities increased by 0.4%; at the same time, cost of sales decreased by 0.8% and distribution costs by 2.1% and admin costs increased by 17.9%. Total operating expenses increased by 13.3% during the year; at the same time, cost of sales decreased by 12.0% and the distribution costs as well as admin expenses by more than 20%. In total, the increase in operational expenditure, both in Q4 and annually, was lower than the growth of sales revenue.

One of the reasons for the increase in operational expenditure is the increased labour costs. Expenses on staff in Q4 2011 were 3.2 million euros, increasing by 21% and in 2011 10.9 million euros, increasing by 19.6%. In 2010, a costs savings regime was implemented at the Group, wages were frozen and employees worked temporarily on a part-time basis. Due to the increase in the volume of orders this year the staff turn back to full-time basis as well as new employees has been hired at Group companies and temporary employees were used in the third quarter. In the reporting quarter, the average number of employees was 436 which are on the average 16 employees more than in the comparable period. The average number of employees within 12 months was 427 which are on the average 3 employees more than in 2010. As at the balance day on 31 December, there were 457 people working in the Group, which were 17 employees more than a year before. In the reporting period, additional remuneration was paid to the employees under the current bonus system. In the fourth quarter, employee wages and salaries totalled 1,900 (Q4 2010: 1,618) thousand euros and they totalled 7,699 (2010: 6,672) thousand euros in the year 2011. The average wages per employee per month have increased by 14% amounted 1,502 euros. The average wage in Finland and Sweden exceed those in Estonia and Lithuania by almost triple.

Operating profit of Q4 2011 was 520 (Q4 2010: 352) thousand euros and EBITDA was 834 (Q4 2010:698) thousand euros. Return of sales for the period improved by 1.3 per cent point and return of sales before depreciation by 1 per cent point, being 4.0% and 6.4% respectively. Operating profit of the 2011 was 2,025 thousand euros, which was 506 thousand euros more than comparing period. EBITDA was 3,378 thousand euros, increasing by 16.5% compared to the same period a year before. Return of sales before depreciation in 2011was 7.2% (2010: 7.1%) and return of sales for the period 4.3%, which was 0.6 per cent point better than a year before.

In the accounting quarter the Group consolidated from the related company a profit of 97,000 (Q4 2010: 5,000) euros and within 12 months 497,000 (2010: 61,000) euros. In the Q4, net financial income amounted 16,000 (Q4 2010: 14,000) euros. Within the year net financial income amounted 744,000 euros, which was 298,000 euros less than comparing period. In the reporting period, dividend income was received by 235 thousand euros more than comparing period, totalling 795 thousand euros. At the same time, 80,000 shares in PKC Group Oyj were sold in the Q1 2010 and financial income from selling the shares was 522 thousand euros.

Overall, the consolidated net profit of the Q4 2011 was 624 (Q4 2010: 281) thousand euros, of which the share of the owners of the parent company was 571 (Q4 2010: 173) thousand euros. EPS in the Q4 was 0.03 (Q4 2010: 0.01) euros. During the year earnings per share were 0.17 (2010: 0.13) euros. The consolidated net profit increased during the year 2011 by 28.5% and was 2,948 thousand euros, of which the share of the owners of the parent company was 2,773 (2010: 2,173) thousand euros.

The amount of the consolidated balance sheet as of 31 December 2011 was 52.9 (31.12.2010: 55.1) million euros, decreasing by 2.2 million euros during the year.

During the Q4 the market price of the PKC Group share increased by 1.07 euros, but decreased during the year by 3.94 euros to 11.43 euros. The cost of investment in assets and reserves in equity capital increased by the profit of 1.5 million euros in Q4 and during the year totally -5.5 million euros received from stock revaluation. In the comparing period, the book value of financial assets increased by 12.3 million euros, included 5.8 million euros in Q4.

During the accounting year the Group invested 2.5 million euros in real estate, 0.5 million euros in tangible fixed assets and 0.1 million euros in intangible fixed assets, totally 3.1 million euros. During the compared period the Group invested 0.3 in real estate, 2.3 in tangible fixed assets and 0.1 million euros in intangible fixed assets, totally 2.7 million euros.

Therefore, overdraft decreased during the 12 months period by 447 thousand euros to 3.8 million euros. Within the year 2011, long-term loan was repaid in the amount of 65 (2010: 235) thousand euros and principal payments of financial lease were made in the amount of 272 (2010: 289) thousand euros. The overdraft facility decreased by 771,000 euros to 2.0 million euros. 

During the year, cash and cash equivalents decreased by 1,585 thousand euros to 815 thousand euros. The cash inflow from business was 1,246 thousand euros; the cash outflow from investing activities was 2,214 thousand euros and from financing activities 617 thousand euros. Within the comparable period cash and its equivalents increased by 119 thousand euros to 2,400 thousand euros. Cash inflow from business was 965 thousand euros and from investing activities 193 thousand euros; cash outflow from financing activity was 1,039 thousand euros.

Andres Allikmäe
Managing Director/CEO

For more information: Interim report 1-12/2011; Mrs Karin Padjus, FO, phone +372 674 7403