Harju Elekter                 FINANCIAL RESULTS                 05/15/2002



FINANCIAL RESULTS, Q1 2002



COMMENTARY TO FINANCIAL RESULTS, Q1 2002



Sales and revenues

The consolidated net sales of AS Harju Elekter for Q1 2002 amounted to 52.2

MEEK (3.3 MEUR). Compared to the same period last year,the company's turnover

grew by 17.5% and sales on the domestic market by 12.1%, thus accounting for

53.0% (Q1 2001: 55.6%) of the consolidated net sales.Export sales amounted to

24.5 MEEK (1.6 MEUR) which is 24.3% more than for the same period last year.

Compared to the 1st quarter of the previous year, the sales volume of the

parent company increased by 20.7%.



The sale of electrical equipment increased 1.3 times in Q1 2002 in comparison

with the same period last year, incl.1.2 times on the domestic market and 2.2

times on the export markets. The share of export in total sales was 18% (Q1

2001: 11%). The increase on the domestic market was triggered by the growing

number of purchase orders for the energy sector products. The increase on the

foreign market is attributable primarily to the growing number of orders from

Latvia and Finland.



The turnover of the Cable Harnesses Factory grew by 17.7%. Beginning from the

current year the cost of material used in manufacturing of some products is

reflected in the turnover which is the main reason for the turnover increase.



The order volume for fibre-optic products more than doubled in comparison with

the previous quarter and accounted for 1.4 MEEK (96 TEUR) in the total sales

for the telecommunications sector.



Profit

The Group's operating profit was 2.8 million EEK or 178 thousand EUR(Q1 2001:

3.4 MEEK or 215 TEUR). The parent company's operating profit grew in

comparison with the same period of the previous year and the profit margin

improved by 0.3 points. The Group's return on sales settled at 5.3% (Q1 2001:

7.6%). The latter was caused by an extremely high return on sales of

telecommunication sector in the 1st quarter of 2001 when the entire stock of

the consignment warehouse was disposed of. The 9% profitability achieved in

the 1st quarter of 2002 is thus quite normal.



Prompted by the need to improve customer services and to create preconditions

for the entry into new markets, the number of salespeople was increased and

marketing intensified in Latvia and Estonia in the second half-year of 2001

that lead to a rise in marketing expenses and laid the foundation for further

sales growth on the domestic as well as foreign markets.



Financial income was 2 666 thousand EEK or 171 thousand EUR (Q1 2001: 169 TEEK

or 11 TEUR). PKC Group paid dividends for the year 2001 in the 1st quarter. 

In 2001 the dividends were received in the 2nd quarter. Therefore the 2.1 MEEK

(132 TEUR) income from dividends affected the net profit and the net profit

margin for Q1 2002.



In total, the Group's net profit for the 1st quarter of 2002 was 5.5 million

EEK or 348 thousand EUR (Q1 2001: 3.5 MEEK or 226 TEUR). Net profit margin

settled at 10.4% (Q1 2001: 8.0%). EPS was 1.01 EEK or 0.06 EUR (Q1 2001: 0.65

EEK or 0.04 EUR).



Cash flow, investments and capital employed

Cash flow from operating activities was 6.5 million EEK or 409 thousand EUR

(Q1 2001: 3.6 MEEK or 231 TEUR),  outflow due to investing and financing

activities 5.1 million EEK or 324 thousand EUR (Q1 2001: 3.7 MEEK or 236

TEUR). During the quarter cash balance on hand and in bank increased by 1.3

MEEK or 85 TEUR whereas in Q1 2001 it had decreased by 65 TEEK or 4 TEUR.



During the accounting period the Group invested 3.1 MEEK or 199 TEUR in

tangible and intangible fixed assets (Q1 2001: 1.5 MEEK or 94 TEUR).

Investments in plant and technology were 1.1 MEEK or 68 TEUR,the bulk of this 

amount was spent on the rehabilitation of the washing units of the powder-

coating line with the aim to ensure better product quality and considerable

reduction in environmental pollution. 1.0 MEEK or 66 TEUR was spent on the

reconstruction projects of buildings and installations.



In March Harju Elekter paid 6 MEEK (383 TEUR) as a monetary contribution into

the share capital of its 100% subsidiary AJT Harju Elekter to be founded on

the basis of the Cable Harnesses Factory.



Long-term loan and capital lease repayments during the accounting period

accounted for 2.1 MEEK or 0.1 TEUR (Q1 2001: 2.2 MEEK or 136 TEUR).



Balance sheet

The consolidated balance sheet volume as of end of March 2002 was 189.5 MEEK

(12.1 MEUR).The balance sheet volume increased by 12.9 MEEK (0.8 MEUR) during

the 1ST quarter of 2002. On one hand, current  receivables grew by 3.5 MEEK

(225 TEUR) and inventories 6.7 MEEK (426 TEUR), on the other hand, trade

accounts payable by 8.9 MEEK (566 TEUR). The increase in inventories was

caused by stock on hand procured in the 1st quarter for the manufacturing of

wiring systems for the automotive and electronic industries as well as growing

orders for electrical equipment that, in turn, lead to an increase in trade

accounts payable and in prepaid sales tax to the customs.



As of the balance sheet date, owners’ equity accounted for 69% (72% in 2001).







Andres Allikmäe

Chairman of the Board

Phone (372) 6 747 400



BALANCE SHEET, 31.03.2002

Consolidated, unaudited



in thousand                        EEK             EUR

ASSETS                         31.03.0231.12.0131.03.0231.12.01

Cash, bank                       12 372  11 039     791     706

Marketable securities                 0     468       0      30

Total customer receivables       18 695  15 305   1 195     978

Other current receivables         1 807   3 343     115     214

Accrued income                      103      35       7       2

Prepaid expenses                  2 832   1 242     181      79

Total current receivables        23 437  19 925   1 498   1 273

Raw materials and inventories    28 191  21 557   1 802   1 378

Goods                             3 662   3 730     234     238

Prepayments to suppliers             97       0       6       0

Total inventories                31 950  25 286   2 042   1 616

TOTAL CURRENT ASSETS             67 759  56 718   4 331   3 625

Stock and shares in ass.comp.    23 360  22 580   1 493   1 443

Other shares                      4 521   4 521     289     289

Other long-term receivables         513     473      33      30

Total financial investments      28 394  27 574   1 815   1 762

Plant and equipment              75 384  75 284   4 818   4 812

Other equipment and fixtures     43 787  43 845   2 798   2 802

Other inventory                   3 803   3 757     243     240

Accumulated depreciation        -33 304 -31 751  -2 129  -2 029

Construction-in-progress          1 660     716     106      46

Prepayments for fixed assets      1 431       0      91       0

Total tangible assets            92 761  91 851   5 929   5 870

Licences                            468     309      30      20

Goodwill                             88     112       6       7

Total intangible assets             557     421      36      27

TOTAL NON-CURRENT ASSETS        121 711 119 845   7 779   7 660

TOTAL ASSETS                    189 470 176 563  12 109  11 284

LIABIL.AND OWNERS' EQUITY

Debt obligations                 13 048  14 929     834     954

Customer prepayments                126      94       8       6

Supplier payables                21 287  12 433   1 361     795

Other sh.-term borrowings           864     499      55      32

Tax liabilities                   4 079   4 931     261     315

Accrued expenses                  6 949   6 010     444     384

TOTAL CURRENT LIABILITIES        46 353  38 896   2 962   2 486

TOTAL NON-CURRENT LIABIL.        12 254  12 254     783     783

TOTAL LIABILITIES                58 606  51 150   3 746   3 269

Share capital                    54 000  54 000   3 451   3 451

Restricted reserves               8 600   6 510     550     416

Retained earnings                62 813  44 161   4 015   2 822

Net profit for the year           5 450  20 742     348   1 326

TOTAL OWNERS' EQUITY            130 864 125 413   8 364   8 015

TOT.LIABIL.AND OWNERS' EQ.      189 470 176 563  12 109  11 284





PARENT COMPANY

in thousand                        EEK             EUR

ASSETS                         31.03.0231.12.0131.03.0231.12.01.

Cash, bank                        5 769  10 260     369     656

Marketable securities                 0     468       0      30

Total customer receivables       14 339  10 718     916     685

Other current receivables         3 824   5 422     244     347

Accrued income                      103      35       7       2

Prepaid expenses                  2 539     938     162      60

Total current receivables        20 804  17 113   1 330   1 094

Raw materials and inventories    20 056  14 275   1 282     912

Goods                             3 612   3 679     231     235

Prepayments to suppliers             45       0       3       0

Total inventories                23 713  17 954   1 516   1 147

TOTAL CURRENT ASSETS             50 286  45 795   3 214   2 927

Stock and shares in subs.        15 138   8 602     967     550

Stock and shares in ass.comp.    23 360  22 580   1 493   1 443

Other shares                      4 521   4 521     289     289

Other long-term receivables         513     473      33      30

Total financial investments      43 531  36 175   2 782   2 312

Plant and equipment              75 251  75 151   4 809   4 803

Other equipment and fixtures     25 607  25 665   1 637   1 640

Other inventory                   2 710   2 693     173     172

Accumulated depreciation        -28 468 -27 426  -1 819  -1 753

Construction-in-progress          1 660     716     106      46

Prepayments for fixed assets      1 431       0      91       0

Total tangible assets            78 190  76 799   4 997   4 908

Licences                            468     309      30      20

Total intangible assets             468     309      30      20

TOTAL NON-CURRENT ASSETS        122 190 113 283   7 809   7 240

TOTAL ASSETS                    172 475 159 078  11 023  10 167

LIABIL.AND OWNERS' EQUITY

Debt obligations                  6 145   7 299     393     466

Customer prepayments                 74      11       5       1

Supplier payables                19 059  10 703   1 218     684

Other short-term borrowings         908     483      58      31

Tax liabilities                   3 764   4 345     241     278

Accrued expenses                  6 160   5 320     394     340

TOTAL CURRENT LIABILITIES        36 109  28 161   2 308   1 800

TOTAL NON-CURRENT LIABIL.         5 503   5 503     352     352

TOTAL LIABILITIES                41 612  33 664   2 659   2 152

Share capital                    54 000  54 000   3 451   3 451

Restricted reserves               8 600   6 510     550     416

Retained earnings                62 813  44 161   4 015   2 822

Net profit for the year           5 450  20 742     348   1 326

TOTAL OWNERS' EQUITY            130 864 125 413   8 364   8 015

TOT.LIABIL.AND OWNERS' EQ.      172 475 159 078  11 023  10 167





INCOME STATEMENT,  2002 Q1

Consolidated,unaudited



in thousand                        EEK             EUR

                               Q1 2002 Q1 2001 Q1 2002 Q1 2001



NET SALES                        52 181  44 398   3 335   2 838

Cost of goods sold               42 888  35 420   2 741   2 264



Gross profit                      9 293   8 978     594     574



Operating expenses, incl.         6 521   5 604     417     358

Marketing expenses                2 586   1 904     165     122

Administrative expenses           3 935   3 701     251     237

Other revenue                       196     108      13       7

Other expenses                      184     117      12       7



Operating profit                  2 784   3 365     178     215



Financial income, incl.

Fin.income from ass.comp.           780     660      50      42

Fin.income from other holdings    2 216      13     142       1

Other interest and fin.income        51      39       3       2

Total financial income            3 046     712     195      46

Financial expenses, incl.

Interest expense                    334     508      21      32

Other financial expenses             46      36       3       2

Total financial expenses            380     544      24      35



Profit from normal operations     5 450   3 533     348     226



Net profit for the year           5 450   3 533     348     226



Basic and diluted earn.per shar    1,01    0,65    0,06    0,04





PARENT COMPANY

in thousand                        EEK             EUR

                               Q1 2002 Q1 2001 Q1 2002 Q1 2001



NET SALES                        44 322  36 726   2 833   2 347

Cost of goods sold               37 184  30 826   2 376   1 970



Gross profit                      7 139   5 900     456     377



Operating expenses, incl.         5 085   4 329     379     342

Marketing expenses                1 866   1 398     137     123

Administrative expenses           3 219   2 931     242     219

Other revenue                       160     104       4       3

Other expenses                      183      88       9      14



Operating profit                  2 032   1 587     168     160



Financial income, incl.

Fin.income from subsidiaries        536   1 556      34      99

Fin.income from ass.comp.           780     660      50      42

Fin.income from other holdings    2 216      18     142       1

Other interest and fin.income        66      91       4       6

Total financial income            3 599   2 325     230     149

Financial expenses, incl.

Interest expense                    174     357      11      23

Other financial expenses              6      22       0       1

Total financial expenses            180     379      12      24



Profit from normal operations     5 450   3 533     348     226



Net profit for the year           5 450   3 533     348     226



Basic and diluted earn.per shar    1,01    0,65    0,06    0,04







Karin Padjus

Chief accountant

(372) 6 747 403





Moonika Vetevool

PR manager

(372) 6 712 761