LHV Institutional Baltic Insight, July 29th, 2021
* Harju Elekter (HAE1T ET) along with its subsidiaries, referred to as the ‘Group’, published its Q2 2021 results, revealing a decline in revenues as well as profit numbers. As expected, the Group’s business is affected by the COVID-19 pandemic with a lag of one year, and the impact is clearly visible now. The COVID-19 pandemic led to short-term disruptions in the supply chain worldwide, leading to a shortage of raw materials and electrical components as well as an increase in the prices of these materials. The Group’s consolidated revenues declined 6.9% y-o-y to EUR 36.3m (Q2 FY20: EUR 39.0m), within our estimate of EUR 33-37m, as sales volume dropped.* The Group has shown some recovery at the top-line level in Q2 compared to Q1, and it can have further recovery in the coming quarters on the back of several large orders procured recently. Several cost optimisation measures and automation initiatives taken by the Group may improve profitability in the medium to long run; however, the management indicated that the increase in the cost of raw materials such as sheet metal and electrical components is expected to continue over the next quarter and could potentially affect the Group’s procurement contracts and profitability.
* Please also refer to the tables in the attachment.
Harju Electrics Ltd. Harju Electrics Ltd (formerly Harju Elekter AS), is an Estonia-based electrical equipment manufacturer. The Company specializes in the production of electrical distribution systems, control panels, cables and substations; wholesale and mediation of light fittings and electrical appliances; real estate holding and information technology (IT) services, among others. Harju Elekter AS is a parent company of Harju Elekter Group, which consists of five subsidiaries: Harju Elekter Elektrotehnika AS, Harju Elekter Teletehnika AS, Satmatic OY, Rifas UAB and Harju Elekter AB. It is active domestically and abroad in such countries as Latvia, Poland, Norway and the United States and others.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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