Harju Elekter Group financial results, 1-9/2026

In the third quarter of 2026, Harju Elekter Group generated sales revenue of 41 million euros, approximately 5% lower than in the corresponding period last year. While sales volumes have not yet reached the desired level, the quarter was the strongest of the year in terms of profitability. Operating profit amounted to 2.3 million euros, and the operating margin increased to 5.7%, exceeding the Group’s minimum target level of 5%.

Profitability continued to be affected by projects that had previously been postponed, the execution of which depends, among other factors, on the delivery of certain customer-specific components. As a result, the realization of part of the planned production volumes was once again delayed. At the same time, workload remained below expectations in several units, particularly at the Lithuanian factory, due to a shortage of orders. In Finland, the key challenge has been growing the project business at the desired pace. Although the economic environment is showing gradual signs of recovery, the volume of higher value-added projects has not yet reached the level envisaged in our targets. Compared to the strong comparative base of the previous year, profitability remained more modest; however, the growth in the order book and improved utilization of production capacity provide grounds for a more positive outlook for the coming periods.

At the same time, we see encouraging developments in the gradual improvement of profitability compared to the first half of the year and the continued strengthening of the order book. Order intake growth is being driven primarily by strong investment activity in the data centre sector and the resulting demand for more advanced power distribution solutions. During the third quarter, we signed a contract worth approximately 15.5 million euros for the design and manufacture of E-house solutions for the electrical distribution system of a data centre being developed in Finland. E-house solutions integrate power distribution and control systems into a factory-built modular solution, reducing the amount of on-site work and shortening overall project implementation time. Demand is further supported by trends in the technology sector, including the rapid adoption of artificial intelligence applications, ongoing digitalisation, and electrification, all of which are driving the need for more reliable and higher-capacity electrical infrastructure solutions. We believe that the combined impact of these developments is creating an attractive long-term growth market for Harju Elekter and will continue to support the strengthening of our order book.

To support the increasing project volumes driven by growing demand from the data centre sector, a new 4,000-square-metre production facility was completed in Keila at the end of the quarter. The new factory expansion will manufacture electrical equipment and power control solutions for data centres, which will be exported to customers across Europe and other global markets. This investment significantly enhances our production capacity and supports the Group’s long-term growth strategy in the rapidly expanding data centre market.

To support the growing order book, we are increasingly managing the Group’s manufacturing network as an integrated whole. We are already seeing higher utilisation levels in our Estonian production units, and one of our key priorities is therefore to increase capacity utilisation at the Lithuanian factory and involve it more extensively in fulfilling the Group’s order backlog. At the same time, we are actively working to broaden the Lithuanian unit’s customer and product portfolio. While its activities have historically been focused largely on customers in the marine sector, our aim is to increase its presence in other market segments going forward. This is supported by the growing expertise of the Lithuanian team, which has been strengthened through participation in projects across other Harju Elekter units. For several ongoing tenders and projects, we already see opportunities to allocate additional production volumes to Lithuania, thereby improving the Group’s overall resource utilisation and creating a more balanced workload across our manufacturing units.

In addition, we continue to transform our operations in Finland. The contract manufacturing market has become increasingly competitive in recent years, and the traditional model based primarily on selling production capacity and labour hours is no longer sustainably competitive in a high-cost environment over the long term. As a result, we have decided to gradually reduce the share of lower value-added contract manufacturing and reallocate resources toward higher-margin project business. Our focus is on larger customers and projects where we can make better use of our engineering expertise and create greater value for our customers.

During the third quarter, we implemented changes in the Group’s leadership. The order book of our Swedish business unit has grown significantly in recent years, while market prospects remain favourable, supported by ongoing investments in electricity grid infrastructure. To support the next phase of development, we appointed Jan Kotka as the new Managing Director of our Swedish subsidiary. Jan brings extensive international experience in leading industrial companies and executing strategic transformation initiatives. The objective of the leadership change is to support sustainable profitability, improve operational efficiency, and strengthen collaboration across the Group.

A significant event also took place after the end of the quarter, when Harju Elekter accepted an offer from Siemens International Holding B.V. for the partial disposal of its shareholding in OÜ Skeleton Technologies Group. The transaction enables us to realise part of the value created by an investment made nearly a decade ago, recover the full amount of the original investment together with a reasonable return, and increase the Group’s financial flexibility. At the same time, we remain a shareholder in Skeleton and see potential to realise the remaining investment in the future under appropriate conditions.

Despite the challenges that remain, the Group’s key performance indicators are moving in the desired direction. A strengthening order book, improving profitability, increased production capacity, and favourable market trends driven by electrification and demand from the data centre sector give us confidence that Harju Elekter is well positioned for its next phase of growth. We will continue to focus on improving capacity utilisation across our manufacturing network, strengthening our order book, and developing the organisation, while looking to the future with cautious optimism.

Revenue and financial results

The Group’s revenue amounted to 41.0 (Q3 2025: 43.0) million euros in the third quarter and 118.2 (9M 2025: 126.5) million euros in the nine months. There are signs of improvement – total volume remained below the previous year’s level, but the decline slowed and sales shifted towards the growing Nordic markets. Growth was driven by the Finnish and Swedish markets, which significantly increased their share of the Group’s sales.

The Group’s operating expenses amounted to 38.6 (Q3 2025: 39.4) million euros in the third quarter and 114.5 (9M 2025: 117.4) million euros in the nine months, decreasing by 2.0% and 2.5%, respectively. The majority of operating expenses consisted of the cost of sales.

Distribution costs increased to 2.1 (Q3 2025: 1.7) million euros in the third quarter and 5.8 (9M 2025: 4.4) million euros in the nine months. The increase is related to strategic investments in sales and marketing activities, including participation in international trade fairs and strengthening of sales teams, with the aim of laying the foundation for a recovery in sales volumes in future periods.

Administrative expenses increased by 12.7% to 2.3 (Q3 2025: 2.1) million euros in the quarter and by 13.5% to 8.0 (9M 2025: 7.0) million euros in the nine months, accounting for 6.7% (9M 2025: 5.5%) of nine-month revenue.

Labour costs increased by 9.0% to 9.2 (Q3 2025: 8.5) million euros in the third quarter and by 8.8% to 30.6 (9M 2025: 28.1) million euros in the nine months, of which wages and salaries amounted to 8.0 (Q3 2025: 7.2) and 24.6 (9M 2025: 21.8) million euros, respectively. Labour costs as a percentage of revenue rose to 22.5% (Q3 2025: 19.7%) in the third quarter and to 25.9% (9M 2025: 22.2%) in the nine months, as the Group retained its team and production capacity to serve upcoming project volumes.

Gross profit decreased to 6.8 (Q3 2025: 7.5) million euros and the gross margin fell to 16.6% (Q3 2025: 17.3%). The decline in margin was mainly due to lower production volumes, which resulted in weaker coverage of fixed costs. Third-quarter operating profit (EBIT) amounted to EUR 2.3 million (Q3 2025: EUR 3.8 million), resulting in an operating margin of 5.7% (Q3 2025: 8.7%). Gross profit for nine months was 17.5 (9M 2025: 20.6) million euros and the gross margin 14.8% (9M 2025: 16.3%), operating profit (EBIT) 3.9 (9M 2025: 10.1) million euros. The operating margin for nine months was 3.3% (9M 2025: 8.0%). Net profit for the nine months was 1.6 (9M 2025: 8.2) million euros.

Core business and markets

The most significant change took place by markets: the Group’s sales are increasingly concentrated in Finland and Sweden. These two markets accounted for 60.1% (Q3 2025: 41.7%) of the Group’s revenue in the third quarter.

Revenue in Finland amounted to 17.0 (Q3 2025: 13.7) million euros in the third quarter and 48.1 (9M 2025: 40.4) million euros in the nine months. Nine-month sales increased by 19.0% and Finland’s share of the Group’s revenue rose to 40.7% (9M 2025: 31.9%). Growth was supported by stable deliveries of electrical distribution solutions, particularly compact secondary substations and low-voltage switchgear.

Sweden recorded the strongest growth among the markets, with revenue of 7.6 (Q3 2025: 4.2) million euros in the quarter and 21.6 (9M 2025: 14.4) million euros in the nine months, an increase of 50.8% over the nine months. Sales were supported by the realisation of larger projects and demand for substations and technical buildings.

In the third quarter, sales decreased in Norway, Estonia and the Netherlands, mainly due to the high comparison base: in the previous year, sales in these markets were shaped by individual large projects whose timing has changed. Revenue in Norway amounted to 5.0 (Q3 2025: 10.7) million euros in the quarter and 14.8 (9M 2025: 28.2) million euros in the nine months, decreasing by 53.0% and 47.4%, respectively. Revenue in Estonia amounted to 4.6 (Q3 2025: 8.7) million euros in the quarter and 14.7 (9M 2025: 20.6) million euros in the nine months, decreasing by 47.1% and 28.5%, respectively. The decline was affected by the timing of orders related to distribution networks, while part of the production volume was directed at fulfilling Scandinavian contracts. As a positive sign, the Group’s sales are expanding into new and smaller markets.

Investments

During the nine months, the Group invested 5.5 (9M 2025: 2.9) million euros in non-current assets, almost twice as much as a year earlier. Of this amount, 4.4 (9M 2025: 1.2) million euros was invested in property, plant and equipment, 1.1 (9M 2025: 1.4) million euros in intangible assets and 0.04 (9M 2025: 0.3) million euros in investment property.

The largest investment was the new 4,000 m² production building in Keila, which increased the total production area of the Keila factories to 30,000 m². The new factory produces electrical equipment and control solutions for data centres, supporting the Group’s growth in this strategically important sector. In addition, production equipment was acquired to increase production capacity and improve process efficiency. In Finland, production was consolidated in Ulvila and the 850 m² Kerava production building was sold during the reporting period. Investments in intangible assets were mainly related to the development of the next-generation electric vehicle charger Elektra Sense and the Group’s digital solutions. The value of long-term financial investments remained at 27.2 (31.12.25: 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 5.16 euros.

Priit Treial
CFO and Member of the Management Board

[email protected]
+372 674 7400

• HEG interim report Q3 2026