The second quarter and first half of 2025 were successful for the Harju Elekter in terms of results. Although we have seen a decline in revenue compared to previous periods, we have continued to improve profitability - a long-term strategic goal of the Group.
The Estonian production unit delivered the strongest performance in the first half-year, supported by continued high demand for substation solutions for distribution networks as well as for more complex E-house type solutions used in data centres. A notable result was also achieved by the Finnish subsidiary Telesilta OY, which specializes in the design and installation of electrical solutions for the shipbuilding industry.
While the results of the Lithuanian, Finnish, and Swedish production units were more modest, the growth in order books in these units indicates increased customer interest and readiness to launch new projects - a development expected to have a positive impact in the second half of the year and into 2026. Although interest in industrial automation and energy efficiency solutions has remained stable or grown, the industrial sector as a whole remains under pressure - primarily due to high input prices and weak export performance, both of which continue to affect our key target markets where investment activity has been cautious.
Overall, we expect strong financial results for the full year 2025. This outlook is supported by declining interest rates, which have improved the investment climate and contributed to a more active economic environment.
In April, AS Harju Elekter Group's Finnish subsidiary Harju Elekter OY exited a financial investment by divesting a 9.15% stake in IGL Technologies OY, a leading Finnish developer and operator of parking and e-mobility solutions. This move aligns with the Group's strategy to focus on core operations and direct more resources toward product development and innovation - particularly the development of next-generation chargers that meet the growing demand for sustainable and smart energy solutions.
Revenue and financial results
The Group's revenue decreased by 19% compared to the same period last year - both in quarterly and half-year comparisons. The revenue for the reporting quarter was 46.1 (Q2 2024: 56.8) million euros, and total revenue for the first half of the year was 83.5 (6M 2024: 103.6) million euros. Although the decline was noticeable compared to the record sales volumes of the past two years, the revenue remained at a good level considering seasonality and is comparable to the more stable in earlier years.
| EUR'000 | Q2 | Q2 | +/- | 6M | 6M | +/- | |
| 2025 | 2024 | 2025 | 2024 | ||||
| Revenue | 46,071 | 56,801 | -18.9% | 83,497 | 103,577 | -19.4% | |
| Gross profit | 7,436 | 8,172 | -9.0% | 13,103 | 13,008 | 0.7% | |
| EBITDA | 4,658 | 5,450 | -14.5% | 8,524 | 7,389 | 15.3% | |
| Operating profit (EBIT) | 3,585 | 4,450 | -19.4% | 6,380 | 5,425 | 17.6% | |
| Profit for the period | 2,628 | 3,467 | -24.2% | 5,263 | 3,827 | 37.5% | |
| Earnings per share (EPS) (euros) | 0.14 | 0.19 | -26.3% | 0.28 | 0.21 | 33.3% |
In the second quarter, the Group continued to adjust its cost structure in line with changes in order volumes and market conditions. Total operating expenses decreased by 18.8% compared to the same period in the previous year, amounting to 42.4 (Q2 2024: 52.2) million euros. A similar reduction continued in the six-month comparison, where total expenses fell by 20.3%, reaching 78.0 (6M 2024: 97.8) million euros.
Distribution and administrative expenses increased slightly in both the second quarter and the first half-year - each by 0.1 million euros on a quarterly basis, reaching 2.4 and 1.4 million euros respectively, and by 0.2 million euros over six months, totaling 2.7 and 4.9 million euros. This increase was necessary to support revenue stability, strengthen customer relationships, and secure new contracts. Labour costs decreased by 0.5 million euros in the second quarter, amounting to 10.1 million euros. Over the six-month period, labour costs declined by 1.0 million euros to 19.6 million euros. The savings primarily resulted from a reduced headcount in Finland and Lithuania. Despite the nominal decrease, the share of labour costs in revenue increased by 3.4 percentage points to 22.0% in the quarter, as the decline in revenue exceeded the reduction in labour costs.
In the second quarter, gross profit decreased to 7.4 (Q2 2024: 8.2) million euros, but the gross margin improved to 16.1% (Q2 2024: 14.4%). The improvement in the margin was supported by more efficient cost control. Operating profit (EBIT) for the quarter was 3.6 (Q2 2024: 4.4) million euros, and the operating margin remained at the same level as in the same period last year - 7.8% (Q2 2024: 7.8%). Net profit was 2.6 (Q2 2024: 3.5) million euros, being close to the result of the first quarter. Despite the decline in sales in the first half of the year, gross profit remained stable at 13.1 (6M 2024: 13.0) million euros and the margin improved to 15.7% (6M 2024: 12.6%). Operating profit grew to 6.4 (6M 2024: 5.4) million euros and the operating margin increased to 7.6% (6M 2024: 5.2%). In addition to improved cost-efficiency, favorable currency exchange movements in the first quarter contributed significantly to the result. Net profit for the six-month period was 5.3 (6M 2024: 3.8) million euros.
Core business and markets
The Group's revenue for the second quarter and first half of 2025 reflected a continued downward trend in the Scandinavian core markets compared to the same period in the previous year. The four largest target markets - Estonia, Finland, Sweden, and Norway - accounted for a total of 80% of the Group's quarterly revenue. Of these, revenue increased in Norway and moderately also in Estonia.
In Estonia, revenue reached 7.0 (Q2 2024: 6.9) million euros in the reporting quarter, marking the highest second-quarter result on the home market to date. Revenue for the first half of the year amounted to 11.8 (6M 2024: 11.4) million euros. The growth was primarily supported by the volume of compact substation orders from electricity distribution network customers, as well as stable rental income from the real estate segment.
Finland remained the largest market in the quarter; however, it also experienced the most significant decline - quarterly revenue decreased by 32.9%, and in the half-year view, by 28.9%. Revenue amounted to 13.8 (Q2 2024: 20.6) million euros in the quarter and 26.7 (6M 2024: 37.5) million euros for the half-year. The main reasons for the decline were the lower sales volume of compact substations and the reduction in contractual manufacturing volumes.
Revenue in the Swedish market also declined - by 40.0% in the quarterly comparison and by 34.9% in the half-year view. Revenue amounted to 5.2 (Q2 2024: 8.7) million euros in the quarter and 10.2 (6M 2024: 15.6) million euros in the six-month period. The decline was a result of a strategic shift in the business model - the offering of turnkey (EPC) projects was discontinued, and the focus shifted to standardized factory-made products. This led to a temporary reduction in volume but helped reduce business risks.
Norway stood out among the Scandinavian markets with positive growth: quarterly revenue increased by 33%, reaching 10.6 (Q2 2024: 8.0) million euros. For the first half of the year, revenue was 17.5 (6M 2024: 17.3) million euros, remaining essentially on the same level as the previous year. The difference in the quarterly comparison was mainly due to the fact that part of the orders signed in 2024 were realized in the second quarter of 2025, resulting in a more modest revenue figure in the first quarter.
Investments
The Group invested a total of 1.9 (6M 2024: 1.5) million euros in non-current assets during the reporting period, including 0.2 (6M 2024: 0.7) million euros in investment properties, 0.8 (6M 2024: 0.4) million euros in property, plant, and equipment, and 0.9 (6M 2024: 0.4) million euros in intangible assets. The investments were aimed at acquiring production technology assets and developing production and process management systems. Investments also included product development activities focusing on the creation of new and improved products.
As of the reporting date, the value of the Group's long-term financial investments was 27.2 (31.12.24: 27.7) million euros. Proceeds from the disposal of the 9.15% stake in IGL-Technologies Oy amounted to 0.9 million euros in the reporting quarter, with a realized gain of 0.4 million euros. The gain was recognized through other comprehensive income.
Share
The company's share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 4.81 euros.
| CONSOLIDATED STATEMENT OF FINANCIAL POSITION | |||||||
| Unaudited | |||||||
| EUR '000 | 30.06.2025 | 31.12.2024 | 30.06.2024 | ||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | 2,925 | 3,773 | 1,632 | ||||
| Trade and other receivables | 42,582 | 29,606 | 48,655 | ||||
| Prepayments | 2,076 | 2,096 | 1,173 | ||||
| Inventories | 25,124 | 19,845 | 28,745 | ||||
| Total current assets | 72,707 | 55,320 | 80,205 | ||||
| Non-current assets | |||||||
| Deferred income tax assets | 526 | 687 | 722 | ||||
| Non-current financial investments | 27,221 | 27,717 | 27,715 | ||||
| Investment properties | 28,927 | 29,432 | 28,901 | ||||
| Property, plant, and equipment | 32,238 | 32,420 | 33,275 | ||||
| Intangible assets | 8,864 | 8,121 | 7,576 | ||||
| Total non-current assets | 97,776 | 98,377 | 98,189 | ||||
| TOTAL ASSETS | 170,483 | 153,697 | 178,394 | ||||
| LIABILITIES AND EQUITY | |||||||
| Liabilities | |||||||
| Borrowings | 9,625 | 9,885 | 17,481 | ||||
| Prepayments from customers | 16,872 | 11,600 | 13,495 | ||||
| Trade and other payables | 26,232 | 17,426 | 27,761 | ||||
| Tax liabilities | 3,502 | 3,260 | 4,598 | ||||
| Current provisions | 671 | 270 | 185 | ||||
| Total current liabilities | 56,902 | 42,441 | 63,520 | ||||
| Borrowings | 19,939 | 20,184 | 23,207 | ||||
| Other non-current liabilities | 17 | 39 | 54 | ||||
| Total non-current liabilities | 19,956 | 20,223 | 23,261 | ||||
| TOTAL LIABILITIES | 76,858 | 62,664 | 86,781 | ||||
| Equity | |||||||
| Share capital | 11,655 | 11,655 | 11,655 | ||||
| Share premium | 3,306 | 3,306 | 3,306 | ||||
| Reserves | 23,035 | 23,135 | 23,063 | ||||
| Retained earnings | 55,629 | 52,937 | 53,589 | ||||
| Total equity attributable to the owners of the parent company | 93,625 | 91,033 | 91,613 | ||||
| TOTAL LIABILITIES AND EQUITY | 170,483 | 153,697 | 178,394 | ||||
| CONSOLIDATED STATEMENT OF PROFIT AND LOSS | |||||||||||
| Unaudited | |||||||||||
| EUR '000 | Q2 | Q2 | 6M | 6M | |||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||
| Revenue | 46,071 | 56,801 | 83,497 | 103,577 | |||||||
| Cost of sales | -38,635 | -48,629 | -70,394 | -90,569 | |||||||
| Gross profit | 7,436 | 8,172 | 13,103 | 13,008 | |||||||
| Distribution costs | -1,395 | -1,328 | -2,681 | -2,524 | |||||||
| Administrative expenses | -2,366 | -2,227 | -4,945 | -4,744 | |||||||
| Other income | 7 | 75 | 1,030 | 94 | |||||||
| Other expenses | -97 | -242 | -127 | -409 | |||||||
| Operating profit | 3,585 | 4,450 | 6,380 | 5,425 | |||||||
| Finance income | 267 | 11 | 900 | 104 | |||||||
| Finance costs | -1,067 | -540 | -1,352 | -1,131 | |||||||
| Profit before tax | 2,785 | 3,921 | 5,928 | 4,398 | |||||||
| Income tax | -157 | -454 | -665 | -571 | |||||||
| Profit for the period | 2,628 | 3,467 | 5,263 | 3,827 | |||||||
| Earnings per share | |||||||||||
| Basic earnings per share (euros) | 0.14 | 0.19 | 0.28 | 0.21 | |||||||
| Diluted earnings per share (euros) | 0.14 | 0.19 | 0.28 | 0.21 | |||||||
| CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||||||
| Unaudited | |||||||||
| EUR '000 | Q2 | Q2 | 6M | 6M | |||||
| 2025 | 2024 | 2025 | 2024 | ||||||
| Profit/loss (-) for the period | 2,628 | 3,467 | 5,263 | 3,827 | |||||
| Other comprehensive income (loss) | |||||||||
| Items that may be reclassified to profit or loss | |||||||||
| Impact of exchange rate changes of a foreign subsidiaries | 300 | -46 | -288 | 60 | |||||
| Items that will not be reclassified to profit or loss | |||||||||
| Gain on sales of financial assets | 385 | 185 | 204 | 185 | |||||
| Net gain on revaluation of financial assets | -1 | -141 | 175 | -72 | |||||
| Total comprehensive income for the period | 684 | -2 | 91 | 173 | |||||
| Other comprehensive income | 3,312 | 3,465 | 5,354 | 4,000 | |||||
Priit Treial
CFO and Member of the Management Board
priit.treial@harjuelekter.com
+372 674 7400
