OREANDA-NEWS. August 08, 2008. The sales revenue of the Group in the second quarter of 2008 was 236.2 million kroons (15.1 million euros), growing 32.5% and in the first six months 440.1 million kroons (28.1 million euros), growing 33.4% compared to the same period during the previous year, reported the press-centre of Harju Elekter.

The fastest growth paces were in the Finnish and Estonian segments. The steady increase of orders by the Finnish machinery sector (exporters) ensured the continued growth of the Finnish subsidiary's sales volume. In total, the Finnish subsidiary sold 34.8 million kroons (2.2 million euros) more worth of products and services in 2Q2008 and a total of 65.6 million kroons (4.2 million euros) more in the six months, than the year before.

Sales to clients outside the Group grew by 23.9 million kroons (1.5 million euros) and a total of 25.3 million kroons (1.6 million euros) in the six months, a growth of 2.4 and 1.7 times, respectively, in comparison with the corresponding periods of the year before. This year, several significant industrial site construction projects were won in Lithuania.

Compared to the year before, also the sales revenue from the execution of projects has nearly doubled. Also grew Lithuanian subsidiary's sales to markets abroad in the first half year by 7.0 million kroons (400 thousand euros).

New markets were added in Denmark and Byelorussia; supplies to Norway and Latvia have grown. During the quarter reported, sales by the Estonian segment to clients outside the Group remained at virtually the same level as the previous year, yet grew 10.8% in the six months. At the same time, sales to other geographical segments have grown significantly (four-fold). In the end, the sales volume for the Estonian segment in 2Q2008 was 120.7 million kroons (7.7 million euros) and in the first half year, as a whole, 232.0 million kroons (14.8 million euros), growing 14.5% and 24.4%, respectively.

Of the markets, the domestic markets of the Group's companies prevailed, where 95.5% (92.6%) of the Group's products and services were sold. The Group has sold its products to the markets of Latvia, Sweden and Poland, as well as Byelorussia, Russia and Norway.

Under the conditions of intensifying competition and a rise in payroll expenses, the expenses for products and services sold grew by more than 37%, outstripping the sales revenue growth rate by 4.8 percentage points in 2Q2008 and 4.3 percentage points in the six months Yet the average growth rate of other business operation expenses was significantly more modest, growing 12.8% to 22.9 million kroons (1.5 million euros) in 2Q2008 and only 12.0% to 41.2 million kroons (2.6 million euros) in the six months.

Business expenses grew in total by more than 34%, outstripping the sales revenue growth rate by
1.8 percentage points in 2Q2008 and 1.3 percentage points in the six months.

In the second quarter, the average number of employees in the Group was 502 (2Q2007:433) and in the first half of the year 486 (H12007: 425). As of 30 June 2008 there were 559, which is 112 employees more than a year ago. The growth in production volumes has brought about an increase in both the number of employees and labour expenses.

Yet due to the dearth of qualified labour, the pressure from salary increases has been strong in both Estonia and Lithuania. In H1 2008 the average salary in the Group have increased by 1,400 kroons (89 euros) up to 23.0 thousand kroons (1.5 thousand euros) compared to the same period during the previous year.

The costs on labour force have increased by 13.0 million kroons (0.8 million euros) in the first six months of 2008, compared to the same period of 2007.

Despite the current low level in the economy, a good growth rates for business revenue were assured both in 2Q2008 and also in the first half year. The business revenue for 2Q2008 was 14.3 million kroons (0.9 million euros), 10.5% more than during comparable periods. The six-month business revenue was 25.6 million kroons (1.6 million euros), a growth of 16.7%. The business profitability for 2Q2008 turned out to be 6.0% (7.2%) and the indicator for the six months was 5.8% (6.6%).

The consolidated net profit for the Group in 2Q2008 was 18.6 million kroons or 1.2 million euros (2Q2007: 52.5 million kroons or 3.4 million euros), of which the parent company's owners' share accounted for 17.4 million kroons (1.1 million euros).

The net profit for the six months was 28.3 million kroons or 1.8 million euros (H1 2007: 61.3 million kroons or 3.9 million euros), of which the parent company's owners' share accounted for 27.2 million kroons or 1.7 million euros (H1 2007: 60.4 million kroons or 3.9 million euros). In the six months in 2007, an extraordinary profit of 32.8 million kroons (2.1 million euros) was made from the sale of financial investments.

Hereby, the net profit for the first half year remained at the 2007 level. Net profit was impacted also by the increased income tax expense, which, due to the growth in the profitability of the Finnish operation and the payment of bigger dividends in Estonia, grew by 2.9 million kroons (0.2 million euros). Net profit per share in the H1 2008 was 1.62 kroons or 0.10 euros (H1 2007: 3.60 kroons or 0.23 euros).

In first six months the Group invested 0.5 million kroons (35 thousand euros) more than compared period, totally 12.8 million kroons (0.8 million euros) in tangible and intangible fixed assets and real estate, of which buildings accounted for 7.1 million kroons (0.5 million euros) and manufacturing equipment and means of transport together for 4.7 million kroons (0.3 million euros).