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The company's revenue in the first six months grew 47.2% to 42.6 million euros, while profit surged from 2 million euros to 26.4 million euros, Harju Elekter told the stock exchange.

The first half of the year was successful for the Harju Elekter Group, the company said. The large agreements and purchase orders concluded at the end of the year increased the sales revenues as well as the operating profit of the group. Extraordinary revenue from the realization of PKC Group Oyj shares resulted in a considerable increase in net profit and provided strong cash flow for prospective investments.

During the second quarter 89% of revenue was earned from the manufacturing segment, while real estate and unallocated activities contributed 11% of the consolidated sales volume. The sale of electrical equipment provided more than 96% of the sales volume of the manufacturing segment. In the second quarter the sale of electrical equipment has increased by 6.5 million euros to 21.6 million euros and by 12.0 million euros to 37.0 million euros in the first six months of this year.

The group's sales revenue earned outside Estonia accounted for 80.8% in the second quarter and 79.4% in the first six months of 2017, both of which were approximately the same as it was the year before. Finland contineus to be the group's largest market. In the reporting quarter, 68.3% of the group's products and services were sold on the Finnish market, growing over the year by 4.8 million euros or 38.9%.

Comparing the reporting half years, the increase was 45.8% or 9.1 million euros to 28.8 million euros, accounting for 67.6% of the consolidated sales revenue. The main reason for the growth were the contracts concluded with Finnish network companies at the end of 2016, whose orders already began in the first quarter of this year.

The group has also increased sales on the Norwegian market. The growth of sales to the Norwegian market in the reporting quarter increased 1.5 million euros and in the first six months 1.8 million euros compared to the same time the year before.

Increasing the sales volume on the Swedish market is a continuous priority of the group and AS Harju Elekter Elektrotehnika. The growth of sales to the Swedish market in the reporting quarter increased 0.4 million euros and in the first six months 0.6 million euros, compared to the same periods last year.

Also sales on the Estonian market grew by 46.6% or 1.5 million euros to 4.8 million euros in the reporting quarter, accounting for 19.2% of the consolidated sales revenue of the reporting quarter. In the first six months of 2017, sales on the Estonian market grew by 37.9% or 2.4 million euro to 8.8 million euros, accounting for 20.6% of the consolidated sales revenue.

Operating expenses increased by 48.3% or 7.7 million euros in the second quarter and 48.2% or 13.2 million euros in the first six months. The main part of operating expenses comprised the cost of sales, which grew faster than the sales revenue. The main reason was the global price appreciation of raw materials, but hiring an additional workforce as well. Increased export has also led to a rise in distribution costs, growing by 30.3% in the reporting quarter and 20.6% in the first six months in respect to the comparable period. Still, the rate of distribution costs dropped, accounting for 4.1% of the sales revenue of the reporting quarter and 4.3% in the first six months. Due to large orders and the development of new products in relation to this, new employees were hired, leading to an increase in the development costs and hence also in administrative expenses. Altogether, the rate of administrative expenses to revenue dropped and made up 5.3% of the sales revenue in the second quarter and 5.9% in the first six months, having decreased by 1.1 and 1.2%age points, respectively.

In the second quarter of 2017, the company employed approximately 542 people, which is an average of 88 employees more than in the same period last year and the average number of employees in the first six months was 516, 62 people more than at the same time last year. As at the end of the reporting period, the group employed 582 people, 112 more than the year before.

Labor costs in the second quarter totaled 3.3 million euros, 19% more than the year before, while labor costs for the first six months totaled 5.9 million euros, 14.9% more than the year before. The growth in wages was due to hiring new employees related to the significant increase in production volumes. The average monthly salary for an employee of the group was 1,914 euros in the first six months, having increased by 1.1%.

In the reporting quarter, the consolidated net profit was 1 million euros. Earnings per share in the second quarter were 0.06 euros. The decrease in net profit is related to PKC Group Oyj dividends worth 766,000 euros received in the second quarter of last year.

Overall, the consolidated net profit of the first six months of the year totaled 26.4 million euros. Earnings per share were 1.49 euros. The large net profit was the result of Motherson Sumi Systems Limited acquiring the shares of PKC Group Oyj at the price of 23.55 euros per share. AS Harju Elekter owned 1,094,641 shares of PKC Group Oyj. Financial income from the sale of shares was 24.8 million euros.

In three months the group has made a total of 4.5 million euros worth of investments to property, plant and equipment and investment properties. Investment growth is related to the ongoing developments of Allika Industrial Park. The company's share on the Tallinn stock exchange in the first six months of the year increased by 46.6% from 2.83 euros to 4.15 euros.