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Friday, 29.03.2024, 09:04
Estonia: Harju Elekter's quarterly sales up 12.7% at EUR 29 mln
The consolidated net profit of the reporting quarter grew to
165,000 euros from 102,000 euros in the first quarter of 2018, the company
told the stock exchange.
Operating profit totaled 300,000 euros.
The company said that low profitability was the result
of an increase in input prices and wages and lower-than-expected order volume
from Finnish electricity networks. Usually, seasonality has a certain effect in
the first quarter.
The consolidated gross profit for the reporting quarter was
3.8 mln euros, marking an increase of 13.3% year over year. At 12.9%, the gross
profit margin was unchanged from the first quarter of 2018.
Sales in the Estonian market grew by 24.7% year over year to
3.5 mln euros and made up 12.0% of the consolidated sales revenue of the
reporting quarter.
"Competition on the home market is tight and winning a
procurement is difficult. The group's Estonian companies make a significant
contribution to increasing our market share in the Estonian market, both in
potential procurements and in offering rental premises to corporate
customers," Harju Elekter
CEO Andres Allikmae
said.
Products and services sold to the group's largest market,
Finland, made up 55.1% of total sales in the reporting quarter. A y-o-y
decrease by 1.8 mln euros to 16.1 mln euros was registered in sales to the
Finnish market. The decrease in sales revenue was mostly a result of a
postponement of electricity and grid projects in Finland to the second half of
the year, which shifted the works planned for the beginning of the year to the
second and third quarter.
Sales to the Swedish market increased the most, growing by
1.7 mln euros to 3.7 mln euros in the first quarter. The share of the Swedish
market in the consolidated sales revenue rose to 12.7%. The growth was due to
the added sales revenue of the Swedish subsidiaries acquired in 2018, as well
as the goal-orientated work of other subsidiaries towards Sweden, the company
said.
"We expect Swedish sales volumes to increase further in the coming quarters, as indicated by the continued growth of orders from Sweden's largest grid company E.ON Energidistribution AB, as well as several new major projects with orders starting from the second quarter. In early May, the Group's subsidiaries will participate in the Scandinavian largest electricity fair Elfack, in Goteborg," Allikmae said.
Sales on the Norwegian market doubled year over year to four
mln euros, making up 13.7% of the consolidated sales revenue of the reporting
quarter. Deliveries and supplies to the Netherlands, where the group has
managed to retain a stable sales revenue for the third quarter in a row, also
continued. The Netherlands made up 5.4% of the consolidated sales revenue in
the reporting quarter.
Operating expenses in the first quarter totaled 28.9 mln
euros, being bigger by 3.2 mln euros or 12.3% than in the same period the year
before. The main factor behind the increase was a rise in the cost of sales
by 2.9 mln euros.
Demand for local labor and related wage pressure, but also
the increased share of employees in Finland and Sweden where the salary level
is notably higher than in other companies of the group, raised labor costs of
the reporting period. Labor costs increased by 12.9%, to 6.4 mln euros y-o-y.
The labor cost rate accounted for 21.8% of the sales revenue in the reporting
quarter.
As at the end of the reporting period, the group had 744
employees, 45 more than a year ago. In the first quarter of 2019, the group
employed an average of 733 people, 54 more than in the same quarter in 2018.
In the reporting quarter, 5.1 mln euros was paid to
employees in salaries and remuneration. The average pay per employee of
the group was 2,368 euros, representing an increase of 10.3% compared to the
first quarter of 2018. Labor costs were affected by the hiring of new workers
in Sweden, but also by the decision of the Republic of Lithuania to calculate a
part of the social tax as the gross salary of the employee. The latter did not
have a significant impact on the labor costs of the group.