OREANDA-NEWS. March 01, 2010. Regardless of the present economic situation, the financial results of the Group were as expected and the Group was profitable. The consolidated sales revenue of the Group in the fourth quarter was 158.4 million kroons (10.1 million euros), which was 22.6% less than the result of the com parable quarter, reported the press-centre of Harju Elekter.

During the reporting period the Group sold its products and services 27.4% less, totally 632.7 million kroons (40.4 million euros).  The core business of the Group is the production and sales of electrical distribution systems and control panels as well as other supportive side-activities, which was traditionally the largest share of sales revenues - approx. 90%. Real estate and income from other commercial activities together formed 10% of the consolidated sales revenue.

Of the Group's products and services, 36.8% (37.2%) were sold on the Estonian, 42.7% (44.8%) on the Finnish and 10.5% (11.3%) on the Lithuanian markets; to the other European markets - Latvia, Germany, Denmark and Portugal - a total of 3.7% (5.4%) were sold, which is approximately 24 million kroons (1.5 million euros) less than in the year before.

In 2008, an order in the amount of 16.6 million kroons (1.1 million euros) to Poland was executed. In 2009, sales to the Polish market accounted to 1.2 million kroons (75,000 euros). The drop in demand on domestic markets has forced a search for new markets. Outside the European Union - in Russia, Belarus and Norway - a total of 6.3% (1.3%) of products were sold. Sales by the Group outside the European Union increased by 29.0 million kroons (1.8 million euros), compensating for the drop in the volumes of sales into other European Union countries.

Primarily due to a decline on both the Estonian and Finnish markets the sales volume of the Estonian segment this year has declined by 23.9% and in Q4 the decline was smaller - 18.4%. The companies in the Lithuanian segment produced a strong Q4, in which the sales volume increased by as much as 11.7% compared to the comparable quarter.

The sale of products and services to the Lithuanian market in Q4 was also 8.3% higher than in the same period of the previous year. A sale by Lithuanian companies to clients outside of the Group in 2009 was 106.5 million kroons (6.8 million euros), which was 16.8% less than in 2008. At the same time, during the accounting year the sales volume to the Lithuanian market declined by one-third, which is compensated by the increasing of sales volumes to foreign markets. Recession reached Finland somewhat later than the Baltic States.

The sales volume of the Finnish segment in the Q1 remained at the Q1 2008 level; however, in Q2, a decline in sales volume began to decrease, which deepened further in Q4 due to a decline in domestic demand in the Finnish market. Sale to the Finnish market fell by 40% in the accounting quarter and by 31% over 12 months.

As a result of the drop in demand, production and sales volumes, the Group has been engaging in saving on and optimising both operational and fixed expenses. The business expenses of the Group declined at the same rate as the sales revenue - by -21.6% in Q4 and -26.5% in the year 2009. Compared to the sales revenue, the expenses of products and services sold dropped even more: by -28.2% in 12 months period and by -23.2% in the accounting quarter. The marketing and general administration expenses for the accounting quarter is, on average, 11.6% less than the indicators for the comparable period.

As at the balance day on 31 December, there were 464 people working in the Group, whish is 51 people less than a year before. People left during the accounting period of their own accord, due to retirement or as a result of redundancy. In the fourth quarter, there was an average of 445 people working in the Group (Q4 2008: 503), included 286 (327) employees in Estonia, 78 (88) employees in Lithuania and 81 (88) employees in Finland.

The annual average number of employees was 452 (501). All labour cost in Q4 2009 were 39.1 million kroons (2.5 million euros), which was 13.4% less than in the comparable period. Labour expenses in the 12 months dropped by over 14% to 147.6 million kroons (9.4 million euros). Spending on wages and salaries decreased by more than 16.1% to 27.9 million kroons (1.8 million euros) in the Q4 2009. Salaries, bonuses and termination payments of the twelve months amounted to 114.3 million kroons (7.3 million euros) and 132.4 million kroons (8.5 million euros) in the compared period.

Business activity of the Group in Q4 was profitable - the operating profit was 7.2 million kroons (0.46 million euros), decreased more than 38% compared to the Q4 2008. The operating margin was 4.6% (5.7%). Depreciation of fixed assets in Q4 was 5.1 million kroons or 0.33 million euros (during the comparable period, 4.5 million kroons or 0.30 million euros), EBITDA was 12.4 million kroons (0.79 million euros), which is 25% less than in the comparable period. EBITDA was 7.8%, which is 0.3 percentage points better than the figure for the comparable period.

The operating profit for the 12 months was 29.5 million kroons or 1.88 million euros (50.1 million kroons or 3.20 million euros during the comparable period), with the operating profit margin for the account period at 4.7% (5.7%). Depreciation of fixed assets amounted to 19.9 million kroons (1.28 million euros) and 18.9 million kroons (1.21 million euros) during the comparable period. EBITDA was 7.8% (7.9%).
 
The consolidated net profit of the Q4 2009 was 5.7 million kroons or 0.36 million euros (in Q4 2008:2.6 million kroons or 0.17 million euros), of which the share of the owners of the parent company was 5.0 million kroons or 0.32 million euros (in Q4 2008: 1.1 million kroons or 0.07 million euros). The net profit margin on the turnover was 3.6%, which is 2.3 percentage points better than the figure for the comparable period. EPS of the reporting period was 0.30 kroons or 0.02 euros (in Q4 2008: 0.07 kroons or 0.00 euros).

The consolidated net profit of 2009 was 22.8 million kroons or 1.46 million euros (in 2008:42.1 million kroons or 2.69 million euros), of which the share of the owners of the parent company was 20.4 million kroons or 1.30 million euros (in 2008: 38.6 million kroons or 2.46 million euros). The net profit margin on the turnover came out at 3.6% (4.8%). EPS of the reporting period was 1.20 kroons or 0.08 euros (in 2008: 2.29 kroons or 0.15 euros).

In 2009 the Group invested 9.2 million kroons or 0.6 million euros in real estate (in 2008: 5.2 million kroons or 0.3 million euros), 16.3 million kroons (1.0 million euros) in tangible fixed assets and 30.9 million kroons (2.0 million euros) in the compared period and 3.8 million kroons or 0.2 million euros in tangible fixed assets (in 2008: 1.1 million kroons or 71 thousand euros).

During the year 2009 the liability of the Group decreased by 68.7 million kroons (4.4 million euros) to 114.5 million kroons (7.3 million euros). During the 12 months, the Group companies repaid a total of 16.3 million kroons (1.04 million euros) of the long-term loan and the short-term loan in the amount of 14.9 million kroons (0.95 million euros) along with the capital lease in the amount of 2.1 million kroons, i.e. 137,000 euros. Interest-bearing debt obligations declined on the balance sheet by a total of 33.2 million kroons (2.1 million euros) to 25.2 million kroons (1.6 million euros).

The cash flow from operations amounted to 77.5 million kroons, i.e. 5.0 million euros (45.0 million kroons, i.e. 2.9 million euros in the comparable period). The cash flow from investments was a negative 14.4 million kroons, i.e.917,000 euros (in the accounting period 12.9 million kroons i.e.825,000 euros). In financing activity, 50.7 million kroons or 3.2 million euros in cash was disbursed (34.9 million kroons or 2.2 million euros during the comparable period). In 2009 cash and cash equivalents increased by 12.4 million kroons (790,000 euros) up to 35.6 million kroons (2.3 million euros) and decreased by 2.8 million kroons (181,000 euros) to the 23.4 million kroons (1.5 million euros) during the comparable period.