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Harju Elekter Group financial results, 1-6/2026

Written by Customer Service on . Posted in Earnings Releases And Operating Results.

The Group’s results for the second quarter and the first half of 2026 remained significantly below target in terms of both revenue and profitability. Whereas the previous year was characterised by strong profitability supported by efficient operations and the timely execution of major projects, sales volumes during the current year developed below expectations and part of the anticipated revenue has been deferred to future periods. In addition to lower sales volumes, profitability was affected by a higher cost base resulting from investments in strengthening sales capabilities, expanding production capacity and further developing the organisation. 

Although the order books of the Estonian and Swedish operations have continued to grow since the beginning of the year, revenue has not yet followed at the same pace. In Estonia, the main challenge is the timely completion of ongoing projects and the delivery of finished products to customers. In Sweden, a significant portion of the order book consists of long-term projects, with execution extending through 2028. The increase in the average delivery period in Estonia is primarily attributable to changes in the sales mix, as E-house projects account for a larger share of revenue and typically involve longer execution and delivery cycles than other products. In the substation business, delivery periods have lengthened mainly due to extended lead times for certain components and equipment. In Lithuania and Finland, the key focus remains on increasing sales volumes, and efforts continue to strengthen sales activities and secure new projects. 

The higher cost base reflects preparations for the expansion of the Estonian production facility as well as investments in recruiting new employees and developing organisational competencies. The current year can be regarded as a transition period during which the Group is preparing for the next peak periods. The order book for the second half of the year is stronger compared to the first half. The Nordic market continues to be supported by investments in strengthening electricity networks, electrification and the development of new generation and consumption capacities, although the local Estonian market has been affected by lower investment volumes from distribution network operators. The Finnish economy has also shown signs of recovery, albeit with investment decisions remaining cautious. Taken together, these developments provide a basis for expecting a gradual improvement in market conditions. The ongoing preparations, combined with a growing order book, create favourable conditions for servicing larger project volumes and supporting revenue growth and improved profitability in the coming years. 

Revenue and financial results

In the second quarter of 2026, Harju Elekter Group’s consolidated revenue amounted to 42.1 (Q2 2025: 46.1) million euros, decreasing by 8.6% compared to the same period last year. Revenue for the first six months of the year totalled 77.2 (6M 2025: 83.5) million euros, representing a year-on-year decline of 7.5%. The change in revenue was primarily driven by the timing of project-based deliveries and higher sales volumes in certain export markets during the comparison period, while sales increased in both Finland and Sweden. 

EUR’000 Q2Q2+/-6M6M+/-
  20262025 20262025 
Revenue 42,110 46,071 -8.6% 77,223 83,497 -7.5% 
Gross profit 5,128 7,436 -31.0% 10,661 13,103 -18.6% 
EBITDA 2,266 4,658 -51.4% 3,905 8,523 -54.2% 
Operating profit (EBIT) 1,111 3,585 -69.0% 1,587 6,380 -75.1% 
Profit for the period 272 2,628 -89.6% 291 5,263 -94.5% 
Earnings per share (EPS) (euros) 0.01 0.14 -92.9% 0.02 0.28 -92.9% 

During the second quarter, the Group continued to adjust its cost structure in response to changes in order volumes and market conditions. Total operating expenses decreased by 2.2% to 41.5 (Q2 2025: 42.4) in Q2 and by 2.7% to 75.9 (6M 2025: 78.0) million euros during the first six months of the year.

Distribution costs and administrative expenses increased both in the second quarter and during the first six months of the year, reflecting investments made to support sales and market development activities. Selling expenses increased by 33.1% to 1.9 (Q2 2025: 1.4) million euros in Q2 and by 38.9% to 3.7 (6M 2025: 2.7) million euros during the first six months of the year. As a result, the ratio of selling expenses to revenue increased to 4.8% (6M 2025: 3.2%).

Administrative expenses rose by 10.7% to 2.6 (Q2 2025: 2.4) million euros in Q2 and by 13.8% to 5.6 (6M 2025: 4.9) million euros during the first six months of the year, accounting for 7.3% (6M 2025: 5.9%) of revenue. The increase was related to the strengthening of sales and development activities, including participation in international trade fairs, where the Group showcased its HECON EVO low-voltage switchgear and the Elektra Sense electric vehicle charger. 

Total labour costs increased by 7.1% to 10.8 (Q2 2025: 10.1) million euros in Q2 and by 8.8% to 21.4 (6M 2025: 19.6) million euros during the first six months of the year. Of this amount, wages and salaries accounted for 8.4 (Q2 2025: 7.3) million euros and 16.7 (6M 2025: 14.6) million euros, respectively. The ratio of labour costs to revenue increased to 27.7% (6M 2025: 23.5%) during the first six months of the year, as the Group deliberately retained its workforce and production capacity in anticipation of a recovery in demand while revenue declined.

Gross profit decreased by 31.0% to 5.1 (Q2 2025: 7.4) million euros, and the gross margin to 12.2% (Q2 2025: 16.1%), mainly due to lower production volumes and weaker fixed-cost coverage. EBIT was 1.1 (Q2 2025: 3.6) million euros, and operating margin of 2.6% (Q2 2025: 7.8%). In the first six months, gross profit was 10.7 (6M 2025: 13.1) million euros, and the gross margin 13.8% (6M 2025: 15.7%). EBIT fell to 1.6 (6M 2025: 6.4) million euros, resulting in an operating margin of 2.1% (6M 2025: 7.6%). Net profit was 0.3 (6M 2025: 5.3) million euros

Core business and markets

Revenue growth in the second quarter was strongest in Finland and Sweden, both of which increased their share of the Group’s total revenue. At the same time, revenue declined in Estonia, Norway, Germany and the Netherlands, where the comparison base was higher due to large-scale projects completed in the prior year.

Revenue in Estonia amounted to 4.5 (Q2 2025: 7.0) in Q2 and 10.1 (6M 2025: 11.8) million euros during the first six months of the year. The decrease was mainly attributable to the timing of orders related to distribution network projects. While sales volumes in the domestic market were stronger in the first quarter, second-quarter revenue remained below the level of the corresponding period last year. At the same time, production capacity was increasingly allocated to export markets, particularly to fulfil contracts in the Scandinavian region. 

Finland remained the Group’s largest market, generating revenue of 17.9 (Q2 2025: 13.8) in Q2 and 31.0 (6M 2025: 26.7) million euros during the first six months of the year. The growth was supported by stable deliveries of power distribution solutions, particularly compact substations and low-voltage switchgear.

Revenue in Sweden increased to 7.7 (Q2 2025: 5.2) in Q2 and 14.1 (6M 2025: 10.2) million euros during the first six months of the year. Revenue growth was driven by the execution of larger projects and continued demand for substations and technical buildings. 

Investments

During the first six months of 2026, the Group invested a total of 3.9 (6M 2025: 1.9) million euros in non-current assets, including 0.04 (6M 2025: 0.2) in investment property, 3.2 (6M 2025: 0.8) in property, plant and equipment, and 0.7 (6M 2025: 0.9) million euros in intangible assets. 

The majority of investments in property, plant and equipment were related to the expansion of the Group’s Estonian production operations, including the continued construction of the new manufacturing facility in Keila. The 4,000 m² production building, scheduled for completion in October 2026, will increase the Group’s total production area to 28,000 m² and support the growth of the substations and e-houses business lines. In addition, investments were made in production technology equipment to increase manufacturing capacity and improve production efficiency.

As of the reporting date, the carrying amount of long-term financial investments totalled 27.2 (31.12.2025: 27.2) million euros.

Share

The company’s share price on the last trading day of the reporting quarter on the Nasdaq Tallinn Stock Exchange closed at 5.40 euros.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION    
Unaudited    
EUR ‘00030.06.202631.12.202530.06.2025 
ASSETS     
Current assets     
Cash and cash equivalents2,911 1,545 2,925  
Trade and other receivables37,148 46,654 42,582  
Prepayments2,330 1,209 2,076  
Inventories20,456 19,896 25,124  
Total current assets62,845 69,304 72,707  
Non-current assets    
Deferred income tax assets132 142 526  
Non-current financial investments27,223 27,225 27,221  
Non-current receivables2 9 0  
Investment properties27,488 28,228 28,927  
Property, plant, and equipment34,696 33,273 32,238  
Intangible assets10,381 9,880 8,864  
Total non-current assets99,922 98,757 97,776  
TOTAL ASSETS162,767 168,061 170,483  
LIABILITIES AND EQUITY    
Liabilities    
Borrowings20,207 15,452 9,625  
Prepayments from customers6,422 15,326 16,872  
Trade and other payables21,422 19,670 26,232  
Tax liabilities3,998 3,324 3,502  
Current provisions283 336 671  
Total current liabilities52,332 54,108 56,902  
Borrowings15,260 15,072 19,939  
Other non-current liabilities20 20 17  
Total non-current liabilities15,280 15,092 19,956  
TOTAL LIABILITIES67,612 69,200 76,858  
Equity    
Share capital11,706 11,672 11,655  
Share premium3,619 3,410 3,306  
Reserves22,729 22,397 23,035  
Retained earnings57,101 61,382 55,629  
Total equity attributable to the owners of the parent company95,155 98,861 93,625  
TOTAL LIABILITIES AND EQUITY162,767 168,061 170,483  

CONSOLIDATED STATEMENT OF PROFIT AND LOSS      
Unaudited      
       
EUR ‘000Q2Q26M6M  
 2026202520262025  
Revenue42,110 46,071 77,223 83,497   
Cost of sales-36,982 -38,635 -66,562 -70,394   
Gross profit5,128 7,436 10,661 13,103   
Distribution costs-1,857 -1,395 -3,724 -2,681   
Administrative expenses-2,620 -2,366 -5,627 -4,945   
Other income588 7 672 1,030   
Other expenses-128 -97 -395 -127   
Operating profit1,111 3,585 1,587 6,380   
Finance income   74 267 139 900   
Finance costs-778 -1,067 -1,308 -1,352   
Profit before tax407 2,785 418 5,928   
Income tax-135 -157 -127 -665   
Profit for the period272 2,628 291 5,263   
Earnings per share      
Basic earnings per share (euros)0.01 0.14 0.02 0.28   
Diluted earnings per share (euros)0.01 0.14 0.02 0.28   

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME      
Unaudited      
       
EUR ‘000Q2Q26M6M 
 202620252026 2025 
Profit for the period272 2,628 291 5,263  
Other comprehensive income     
Items that may be reclassified to profit or loss     
    Impact of exchange rate changes of foreign subsidiaries200 300 405 -288  
Items that will not be reclassified to profit or loss     
    Realized gain on sales of financial assets0 385 0 204  
    Revaluation of financial assets-3 -1 0 175  
Total other comprehensive income (-loss) for the period197 684 405 91  
Total comprehensive income469 3,312 696 5,354  
        

Priit Treial
CFO and Member of the Management Board

priit.treial@harjuelekter.com
+372 674 7400

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