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Electronics Production | March 02, 2009

Harju Elekter to implement part-time work for 169 staff

Harju Elekter Group has submitted requests to the Labour Inspectorate and has also received permission for the application of part-time working time in subsidiaries AS Harju Elekter Elektrotehnika and AS Eltek.
According to need, it will be possible to apply part-time working time in the case of up to 169 people, in the period of time from 23 February to 30 April 2009. The need to apply part-time working time arises from a decline in production volumes due to a decrease in orders in the first half of this year. Part-time working time is 60% of the standard for working time or 24 hours a week, increasing the flexibility of the company in the organisation of work in a changing economic environment. At the present time, it is difficult to estimate when the situation will stabilise and normal business and production organisation will recover.

The consolidated sales profit of the group in the fourth quarter was €13.1 million (4th quarter of 2007: €13.2 million), which was 1% less than the result of the comparable quarter. The sales volume of 2008 amounted to €55.7 million, exceeding the result of last year by €8.9 million. Regardless of the recession in the economy, the growth speed of sales profit in the financial year was 19.1%.

During the financial year, the profitability of the group was affected the most by toughening competition, which resulted in pressure on sales prices, and a price drop that brought about the markdown of stock reserves in the final quarter of the year. The worsening of the payment habits of clients also had an effect, so the expenditure was higher than usual in the financial year due to the markdown of claims. The business profit of the reporting quarter before depreciation was €1.1 million, surpassing the results of the same period last year by more than 8%, and business profit was €0.7 million, which was 25% more than in the comparable period. The business profitability of the fourth quarter was 5.7%, exceeding the result of the fourth quarter of last year by 1.2 percentage points. The business profit of the financial year before depreciation was €4.4 million (2007: €4.5 million) and business profit was €3.2 million (2007: €3.3 million), decreasing by 2.8% and 2.6% compared to the year 2007, respectively. Operating margin was 5.8% (2007: 7.0%).

The net profit of the group was affected the most by the financial income earned on financial investments. In 2007, a one-time income in the amount of €2.1 million was earned from the sale of financial investments. No financial assets have been sold this year. The reassessment of the reserves and financial instruments due to the drop in the market prices of raw material was the reason for consolidating a loss of €499 thousand from affiliated companies in the fourth quarter (Q42007: € -253 thousand) and the total of 2008 was € -260 thousand (2007: €5000).

The consolidated net profit of the fourth quarter was €173 thousand (in Q42007: €287 thousand) and in twelve months, a net profit of €2.7 million was earned (in 2007: €5.5 million).

As at the balance day on 31 December, there were 515 people working in the group, which is 29 employees more than a year ago. The increase in production volumes has brought about an increase in the number of employees as well as an increase in labour costs. In the fourth quarter, there was an average of 503 people working in the group (Q42007: 458). The annual average number of employees increased by 45 to 503 and the average monthly wages of the employees of the group increased by €25.56 to €1400. In the reporting year, wage costs increased by 10.7% to €8.2 million.

In the 12 months, the Group has invested a total of €2.0 million in buildings, €241 thousand in production equipment and means of transport.

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