AS HARJU ELEKTER                  FINANCIAL RESULTS               2005-11-02



FINANCIAL RESULTS, 1-9/2005



The economic results of the Harju Elekter group for the 9 months of 2005 are

good and in line with the estimates. The Estonian companies of the group have

again grown rapidly; the progress of the subsidiaries outside Estonia has been

more stable. The group as a whole achieved a remarkable growth of both sales

income (+13,9%) and EBIT (+19,2%). The rapid economic growth and market demand

favor the group’s further development. The share price of PKC Group on the

Helsinki Stock Exchange rose in Q3, having grown by nearly one-fifth since the

beginning of the year.



Key indicators (MEUR)                         1-9/2005       1-9/2004

Net sales                                         22,9        20,1

Operating profit                                  1,8          1,5

Profit from ordinary activities                   5,5          6,2

Net profit for the current period                 5,3          6,1



At the end of the period

Total current assets                               9,8        10,4

Total fixed assets                                36,2        28,1

Total assets                                      46,0        38,5

Total liabilities                                  8,0         7,5

Minority interests                                 1,0         1,0

Total owners’ equity                              37,0        30,1



Performance indicators

Return of sales (operating profit/net sales *100)  8,0%       7,6%

Net profit margin (net profit /net sales *100)    22,9%      30,1%

Owners’ equity margin                             80,4%      78,0%

(equity /balance sheet total *100)



Number of employees on 30.09.2005                 418          383

EPS (EUR)                                         0,31        0,37



The consolidated sales income for the 9 months of 2005 increased by 14%

compared to the same period of the previous year, to MEEK 358,9 (MEUR  22,9).

Of  this,  66%  was attributable to the sales of electrical equipment, having

increased  by  16% compared to the same period of the previous year, to MEEK

236,8  (MEUR 15,13); the sales of sheet metal products and services increased

by  8% to MEEK 21,4 (MEUR 1,37) and the sales of telecommunication  products

increased  by 9% to MEEK 16,1 (MEUR 1,03). In summary, the sales of industrial

products  accounted  for  76% while intermediate commercial  transactions  and

services formed 24% of the consolidated sales income.



Sales to the Estonian market accounted for 53%, increasing by 28% to MEEK

190,7 (MEUR 12,2). The biggest export markets were still Finland Republic

(turnover MEEK 124,3 or MEUR 7,9) and Lithuania (turnover MEEK 34,9 or MEUR

2,2).65% of the sales revenue of the group was contributed by Estonian

enterprises (an increase in turnover growth by 15% year-on-year), 25% by

Finland (turnover growth 5%), and 10% Lithuania (turnover growth 3%).



The group’s consolidated net sales for Q3 were MEEK 129,7 or MEUR 8,3 (Q3

2004: MEEK 126,0 or MEUR 8,1). The quarter’s results are largely influenced by

the period in which a large-scale order or project is finalised.



The consolidated operating expenses for 9M totaled MEEK 43,1 (MEUR 2,8),

having increased by MEEK 7,6 (MEUR 0,5), and the Q3 operating expenses were

MEEK 14,7 (MEUR 0,9), having increased by MEEK 2,6 (MEUR 0,2), that is 22%.

The increase in operating expenses is due to the price rise of outsourced

services, on the one hand. On the other hand, the group’s development and

gradual increase in the volume of sales orders over the years has caused a

need for new jobs and boosted product development expenses. The number of

employees in the group increased by 35, of them 14 was hired to the sales and

development departments.



The total operating profit of the consolidation group AS Harju Elekter was

MEEK 28,6 or MEUR 1,9, increasing by 19% compared to the same period last

year and  EBIT to net sales 8% (9M 2004: 7,6%).



The group’s EBIT to net sales for Q3 was 9,8%, which was 1,8 percentage points

higher  than  the average for nine months, although as a result  of  the  more

rapid growth of operating expenses than sales income, EBIT for Q3 decreased by

MEEK 1,3 (TEUR 86) to MEEK 12,7 (TEUR 814).



The group’s consolidated net income for Q3 was MEEK 61,4 or MEUR 3,9 (Q3 2004:

MEEK 14,9 or MEUR 1,0). Net income was substantially influenced by the change

in the market price of the share of PKC Group Oyj, which is included in the

balance sheet. Its share price rose by EUR 1,70 (EEK 26,60) in Q3 and

financial income from revaluation of the shares amounted to MEEK 48,7 or MEUR

3,1 (the loss for Q3 2004 was MEEK -2,1 or MEUR -0,14). The total financial

income from share price fluctuations for 9M was MEEK 52,2 or MEUR 3,3 (9M

2004: MEEK 48,8 or MEUR 3,1). PKC Group paid an extraordinarily large dividend

(MEEK 24,3; MEUR 1,5), while in 2005, they paid in a total of MEEK 5,8, i.e.

MEUR 0,37 only. The income tax expenditure totaled MEEK 3,2, i.e. TEUR 202 as

reported for the 9M 2005 report in the income statement (9M 2004: TEEK 49,

i.e. TEUR 3).



The consolidated net profit for 9M was MEEK 82,2 or MEUR 5,3 (9M 2004: MEEK

94,8 or MEUR 6,1).EPS was EEK 4,89 or EUR 0,31 (9M 2004: EEK 5,64 or EUR 0,36)*

and net profit margin 22,9% (9M 2004: 30,1%).



During  the  accounting period, the Group invested in tangible and  intangible

assets a total of MEEK 31,2 or MEUR 2,0 (9M 2004: MEEK 24,5 or MEUR  1,6). A

total of  MEEK 22,4 (MEUR 1,4) were invested in real estate in the  9M  2005;

MEEK  3,9 (MEUR 0,25) was invested in plant and equipment, and MEEK 2,6  (MEUR

0,17) in the acquisition of land.



The company purchased, on the conditions of a financial lease, a sheet  metal

center  with an acquisition cost of MEEK 1,29 (TEUR 83). The debt is repayable

within four years.



In the first 9 months the group repaid long-term bank loans in the total

amount of MEEK 5,7 (MEUR 0,36) and made capital lease payments in the total

amount of MEEK 1,7 (MEUR 0,11).





Andres Allikmäe

Chairman of the Board

+372 6 747 400



For more information: Interim report 1-9/2005 of Harju Elekter or Mrs. Karin

Padjus, Member of the Board (tel +372 6 747 403).

_______________________________

* Fund issue is included into the 2004 figures





AS HARJU ELEKTER

BALANCE SHEET, 30.09.05

Consolidated, unaudited



Group

in thousand                   EEK           EUR

ASSETS                      30.09.0531.12.0430.09.0531.12.04

Cash, bank                    16 172  18 786   1 034   1 201

Total customer receivables    57 954  49 824   3 704   3 184

Other current receivables      2 931   4 156     187     266

Accrued income                     0     221       0      14

Prepaid expenses               2 068   1 136     132      73

Total current receivables     62 953  55 337   4 023   3 537

Inventories                   74 254  67 950   4 746   4 342

TOTAL CURRENT ASSETS         153 379 142 073   9 803   9 080

Long-term financial investme 370 007 323 138  23 648  20 652

Investment properties        121 899  86 880   7 791   5 553

Tangible assets               72 423  86 551   4 629   5 531

Intangible assets              1 457   1 951      93     125

TOTAL NON-CURRENT ASSETS     565 786 498 520  36 161  31 861

TOTAL ASSETS                 719 165 640 593  45 964  40 941

LIABILITIES AND OWNERS' EQUITY

Debt obligations              15 601  14 380     997     919

Customer prepayments           4 010   2 666     256     170

Supplier payables             42 038  45 535   2 687   2 910

Other short-term borrowings    2 351   1 750     150     112

Tax liabilities                8 965   7 560     573     483

Accrued expenses               9 577  12 044     612     770

Short-term provision             230     300      15      19

Other prepaid revenue          1 822   3 643     117     233

TOTAL CURRENT LIABILITIES     84 594  87 878   5 407   5 616

TOTAL NON-CURRENT LIABILITIE  41 081  17 357   2 626   1 109

TOTAL LIABILITIES            125 675 105 235   8 033   6 725

Minority interests            14 975  14 381     957     919

Share capital                168 000  56 000 10 737    3 579

Paid-in capital over/under p   6 000   6 000     384     384

Restricted reserves            8 600   8 600     550     550

Retained earnings            395 915 450 377  25 303  28 784

TOTAL OWNERS' EQUITY         578 515 520 977  36 974  33 297

TOT.LIABILIT.AND OWNERS' EQU 719 165 640 593  45 964  40 941





INCOME STATEMENT,  1-9/2005

Consolidated,unaudited



in thousand EEK

GROUP                       Q3 2005 Q3 2004 M9 2005 M9 2004



NET SALES                    129 718 126 022 358 922 315 223

Cost of goods sold          -102 461 -99 826-287 482-255 958



Gross profit                  27 257  26 196  71 440  59 265



Operating expenses, incl.    -14 685 -12 155 -43 053 -35 421

Marketing expenses            -5 955  -5 155 -16 500 -14 354

Administrative expenses       -8 730  -7 000 -26 553 -21 067

Other revenue                    325      94     832     483

Other expenses                  -167     -62    -589    -302



Operating profit              12 730  14 073  28 630  24 025



Net financial incomes/expens  48 386   2 319  56 943  73 248

Income from subsidiaries         911     488     860    -192



Profit from normal operation  62 027  16 880  86 433  97 081

Corporate Income tax            -133     -16  -3 166     -49

Profit after taxes            61 894  16 864  83 267  97 032

Minority interest             -1 056  -1 927  -1 089  -2 212

Net profit for the year       60 838  14 937  82 178  94 820



Basic and diluted

earnings per share              3,62    0,91    4,89    5,83





in thousand EUR

GROUP                       Q3 2005 Q3 2004 M9 2005 M9 2004



NET SALES                      8 291   8 054  22 939  20 146

Cost of goods sold            -6 548  -6 380 -18 373 -16 359



Gross profit                   1 743   1 674   4 566   3 787



Operating expenses, incl.

Marketing expenses              -381    -329  -1 054    -917

Administrative expenses         -558    -447  -1 697  -1 347

Other revenue                     21       6      53      31

Other expenses                   -11      -4     -38     -19



Operating profit                 814     900   1 830   1 535



Net financial incomes/expens   3 092     148   3 639   4 681

Income from subsidiaries          58      31      55     -12



Profit from normal operation   3 964   1 079   5 524   6 204

Corporate Income tax              -8      -1    -202      -3

Profit after taxes             3 956   1 078   5 322   6 201

Minority interest                -67    -123     -70    -141

Net profit for the year        3 889     955   5 252   6 060



Basic and diluted

earnings per share              0,23    0,06    0,31    0,37





Karin Padjus

Chief accountant

+372 6747 403