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 | Q2 | Q2 | +/- | 6M | 6M | +/- | |
| 2026 | 2025 | 2026 | 2025 | ||||
| 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 ‘000 | 30.06.2026 | 31.12.2025 | 30.06.2025 | ||||
| ASSETS | |||||||
| Current assets | |||||||
| Cash and cash equivalents | 2,911 | 1,545 | 2,925 | ||||
| Trade and other receivables | 37,148 | 46,654 | 42,582 | ||||
| Prepayments | 2,330 | 1,209 | 2,076 | ||||
| Inventories | 20,456 | 19,896 | 25,124 | ||||
| Total current assets | 62,845 | 69,304 | 72,707 | ||||
| Non-current assets | |||||||
| Deferred income tax assets | 132 | 142 | 526 | ||||
| Non-current financial investments | 27,223 | 27,225 | 27,221 | ||||
| Non-current receivables | 2 | 9 | 0 | ||||
| Investment properties | 27,488 | 28,228 | 28,927 | ||||
| Property, plant, and equipment | 34,696 | 33,273 | 32,238 | ||||
| Intangible assets | 10,381 | 9,880 | 8,864 | ||||
| Total non-current assets | 99,922 | 98,757 | 97,776 | ||||
| TOTAL ASSETS | 162,767 | 168,061 | 170,483 | ||||
| LIABILITIES AND EQUITY | |||||||
| Liabilities | |||||||
| Borrowings | 20,207 | 15,452 | 9,625 | ||||
| Prepayments from customers | 6,422 | 15,326 | 16,872 | ||||
| Trade and other payables | 21,422 | 19,670 | 26,232 | ||||
| Tax liabilities | 3,998 | 3,324 | 3,502 | ||||
| Current provisions | 283 | 336 | 671 | ||||
| Total current liabilities | 52,332 | 54,108 | 56,902 | ||||
| Borrowings | 15,260 | 15,072 | 19,939 | ||||
| Other non-current liabilities | 20 | 20 | 17 | ||||
| Total non-current liabilities | 15,280 | 15,092 | 19,956 | ||||
| TOTAL LIABILITIES | 67,612 | 69,200 | 76,858 | ||||
| Equity | |||||||
| Share capital | 11,706 | 11,672 | 11,655 | ||||
| Share premium | 3,619 | 3,410 | 3,306 | ||||
| Reserves | 22,729 | 22,397 | 23,035 | ||||
| Retained earnings | 57,101 | 61,382 | 55,629 | ||||
| Total equity attributable to the owners of the parent company | 95,155 | 98,861 | 93,625 | ||||
| TOTAL LIABILITIES AND EQUITY | 162,767 | 168,061 | 170,483 | ||||
| CONSOLIDATED STATEMENT OF PROFIT AND LOSS | |||||||||||
| Unaudited | |||||||||||
| EUR ‘000 | Q2 | Q2 | 6M | 6M | |||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||
| Revenue | 42,110 | 46,071 | 77,223 | 83,497 | |||||||
| Cost of sales | -36,982 | -38,635 | -66,562 | -70,394 | |||||||
| Gross profit | 5,128 | 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 income | 588 | 7 | 672 | 1,030 | |||||||
| Other expenses | -128 | -97 | -395 | -127 | |||||||
| Operating profit | 1,111 | 3,585 | 1,587 | 6,380 | |||||||
| Finance income | 74 | 267 | 139 | 900 | |||||||
| Finance costs | -778 | -1,067 | -1,308 | -1,352 | |||||||
| Profit before tax | 407 | 2,785 | 418 | 5,928 | |||||||
| Income tax | -135 | -157 | -127 | -665 | |||||||
| Profit for the period | 272 | 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 ‘000 | Q2 | Q2 | 6M | 6M | |||||
| 2026 | 2025 | 2026 | 2025 | ||||||
| Profit for the period | 272 | 2,628 | 291 | 5,263 | |||||
| Other comprehensive income | |||||||||
| Items that may be reclassified to profit or loss | |||||||||
| Impact of exchange rate changes of foreign subsidiaries | 200 | 300 | 405 | -288 | |||||
| Items that will not be reclassified to profit or loss | |||||||||
| Realized gain on sales of financial assets | 0 | 385 | 0 | 204 | |||||
| Revaluation of financial assets | -3 | -1 | 0 | 175 | |||||
| Total other comprehensive income (-loss) for the period | 197 | 684 | 405 | 91 | |||||
| Total comprehensive income | 469 | 3,312 | 696 | 5,354 | |||||
Priit Treial
CFO and Member of the Management Board
priit.treial@harjuelekter.com
+372 674 7400
