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Electronics Production | November 05, 2008

Harju Elekter with increase in sales revenue for 3Q

The Group's consolidated sales revenue for the third quarter was MEUR 14.5, which exceeded the figure of the reference quarter by MEUR 2.0. The growth pace of sales revenue was 16%.
The sales volume of nine months reached MEUR 42.6, exceeding the figure of the reference period by MEUR 9.0. Despite the prevailing economic recession, the growth pace of sales revenue was 16% and 27%, respectively, in the third quarter and the nine months as a whole.

The Group's profitability in the reporting period was affected by pressure from intensifying competition, price increase of raw materials, fuel and energy, and growth of labour costs. Deterioration of the payment habits of clients also had an impact, therefore the cost from the discounting of claims was larger than usual during the reporting period. The business revenue for 3Q2008 was MEUR 0.8 (3Q2007: MEUR 1.3) and the nine-month business revenue was MEUR 2.5 (9 months of 2007: MEUR 2.7).

The Group's net profit was most influenced by the financial income earned on financial investments. In 2007, an extraordinary profit of MEUR 2.1 was made from the sale of financial investments. This year no financial assets have been sold. In connection with the payment of dividends, the Estonian companies paid a total of EUR 541 000 in income tax, which is by EUR 131 000 more than in 2007. All in all, the income tax expenditure of the Group increased within nine months by EUR 211 000 up to EUR 765 000.

The Group's net profit for the third quarter was MEUR 0.7 (3Q2007: MEUR 1.3) and the net profit for nine months was MEUR 2.5 (9 months of 2007: MEUR 5.2). The share of the owners of the parent company in the net profit comprised EUR 656 000 in the third quarter and MEUR 1.2 in the reference period. The net profit per share was EUR 0.04 and in the reference period EUR 0.07. Within nine months, net profit per share of EUR 0.14 was earned and in the reference period EUR 0.30, the share of the owners of the parent company in the net profit comprised MEUR 2.4 and in the reference period the corresponding figure was MEUR 5.1.

As of 30 September 2008 there were 521 employees in the Group, which is 52 employees more than a year ago. In the third quarter, the average number of employees in the Group was 523 (3Q2007: 462) and in 9M 501 (9 months of 2007: 437). Students of vocational schools are temporarily hired during summer months, as a result of which the average number of employees in the third quarter is a little larger and the average salary a little lower compared to the other quarters. In the reporting period the average salary in the Group have increased by EUR 47.90 up to EUR 1 400 compared to the same period during the previous year. The costs on labour force have increased by MEUR 0.9 in the nine months of 2008 up to MEUR 8.1.

In 3Q2008, a production and office building will be completed in Lithuania; its construction was commenced in the 2Q2007. During 2008 the volume of construction output amounted to 364 thousand euros. In total, the construction has cost EUR 813 000. In the nine months, the Group has invested a total of EUR 873 000 in buildings, EUR 366 000 in production equipment and means of transport.

To finance new construction in Lithuania, the Group took out an additional long-term loan in the amount of EUR 192 000. AS of September, 30 long-term loans have been used in the amount of EUR 473 000. The loan contract has been concluded for five years. Long-term loans were repaid within nine months in the amount of EUR 534 000 and in the reference period in the amount of EUR 481 000.

On a financial lease, a total of EUR 53 000 of machinery and equipment were acquired, and a total of EUR 70 000 of principal repayments on the financial lease were made in nine months, and on the comparable period EUR 64 000 and EUR 54 000, respectively.

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