AS HARJU ELEKTER                   FINANCIAL RESULTS               02.08.2005



FINANCIAL RESULTS, 1-6/2005



The economic results of the group of Harju Elekter for the first half of 2005

are good. We have increased our sales revenue as well as our operating profit

and expanded our commercial operations in Estonia, Finland and Lithuania. A

favorable economic climate and demand in the markets have added security that

the growth will continue. We have also successfully launched our new

subsidiary AS Harju Elekter Elektrotehnika. The price of PKC shares on the

Helsinki Stock Exchange has remained stable.



Key indicators (MEUR)                            1-6/2005     1-6/2004

Net sales                                         14,6         12,1

Operating profit                                  1,0          0,6

Profit from ordinary activities                   1,6          5,1

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



At the end of the period

Total current assets                               8,8         7,7

Total fixed assets                                33,3         28,2

Total assets                                      42,1         35,9

Total liabilities                                  8,1         6,5

Minority interests                                 0,9         0,8

Total owners’ equity                              33,0         28,6



Performance indicators

Net sales growth                                  21,1%        26,5%

Operating profit growth                           59,8%        26,3%

Return of sales (operating profit/net sales *100)  6,9%         5,3%

Net profit margin (net profit /net sales *100)    10,6%        42,2%

Owners’ equity margin                             78,4%        79,6%

(equity /balance sheet total *100)



Number of employees on 30.06.2005                 413          374

EPS (EUR)                                         0,08         0,32



The sales revenue of the consolidation group AS Harju Elekter comprised MEEK

229,2 (MEUR 8,8) in the H1 2005, increasing by 21% in comparison with the same

period of the previous year. Manufacturing contributed 80% of the consolidated

sales revenue (turnover growth 22%), services contributed 10% (turnover growth

23%) and trade accounted for 10% (turnover growth 10%). Of the turnover, 76%

was generated by revenue from the sales of industrial production and 24% by

the mediation and sale of services. At the same time the sale of industrial

output went up by 23% in the first half year-on-year to EEK 174,0 million (EUR

11,1 million) and the intermediate sale of services and goods increased by 16%

to EEK 55,3 million (EUR 3,5 million).



Sales to the Estonian market accounted for 54%, increasing by 37% to EEK 123,5

million (EUR 7,9 million). Export sales formed 46% and increased by 7% to EEK

105,7 million (EUR 6,8 million). Finland remained the largest export market

with a share of 34% in the turnover. 66% of the sales revenue of the group was

contributed by Estonia (an increase in turnover growth by 24% year-on-year),

24% by Finland (turnover growth 15%), and 10% Lithuania (turnover growth 18%).



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

MEEK 15,9 or MEUR 1,1, being 1,6 times higher than in the previous year.



The net profit of the group was MEEK 20,8, i.e. MEUR 1,3 (first half of 2004:

MEEK 79,9, i.e. MEUR 5,1). The main cause of the fall in the net profit was

the fact that the changes in the prices of PKC shares included in the balance

sheet as assets are recorded pursuant to the accounting principles as profit

for the period, regardless of the fact that no operations were conducted with

them. During the first half of 2005, the market price of the share of PKC

group Oyj recorded in the balance sheet was stable, increasing by EUR 0,12,

and additional income from the revaluation of the shares was MEEK 3,5 (MEUR

0,22). In the first half of 2004, the share price rose by EUR 1,75 and the

additional financial income from revaluation was MEEK 51,0 (MEUR 3,26).

Pursuant to the Finnish Income Tax Act, amended as of 1 January 2005, PKC

Group paid an extraordinarily large dividend (MEEK 19,4; MEUR 1,2), while in

2005, they paid only EUR 0,20 per share in a total of MEEK 5,8, i.e. MEUR

0,37. Pursuant to the amended Finnish Income Tax Act, in 2005, an income tax

of 15% was withheld on the paid dividends, amounting to MEEK 0,9 (TEUR 56).

The payment of dividends in 2005 also entailed for Harju Elekter an income tax

liability of MEEK 2,0 (MEUR 0,13), while in 2004, the payment of dividends had

been exempt from tax. The income tax expenditure totaled MEEK 3,0, i.e. TEUR

194 as reported for the first half of 2005 in the income statement (first half

of 2004: TEEK 33, i.e. TEUR 2).



The group’s operating margin was 6,9% which is 1,6 percentage points higher than

in the first half of 2004. The net margin was 10,6% (42,2% in H1 of 2004).



EPS was 1,24 kroons or 0,08 euros (H1 2004: 4,93 kroons or 0,32 euros)(1).



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

assets a total of MEEK 27,9 or MEUR 1,78(H1 2004: MEEK 21,3 or MEUR 1,4). In

the second quarter, newly completed production buildings were rented to PKC

Eesti and HE Elektrotehnika. A total of MEEK 20,2 (MEUR 1,3) were invested in

real estate in the first half of the year; MEEK 3,9 (MEUR 0,25) was invested

in plant and equipment, and MEEK 2,6 million (MEUR 0,17) in the acquisition of

land.





Andres Allikmäe

Chairman of the Board

+372 6 747 400



For more information: Interim report 1-6/2005 of Harju Elekter or Mrs. Karin

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

_______________________________

(1) Fund issue is included into the 2004 figures





AS HARJU ELEKTER

BALANCE SHEET, 30.06.05

Consolidated, unaudited



Group

in thousand                   EEK           EUR

ASSETS                      30.06.0531.12.0430.06.0531.12.04

Cash, bank                    17 553  18 786   1 122   1 201

Total customer receivables    45 215  49 824   2 890   3 184

Other current receivables      4 745   4 156     303     266

Accrued income                    48     221       3      14

Prepaid expenses               3 921   1 136     251      73

Total current receivables     53 929  55 337   3 447   3 537

Inventories                   66 327  67 950   4 239   4 342

TOTAL CURRENT ASSETS         137 809 142 073   8 808   9 080

Long-term financial investme 325 288 323 138  20 790  20 652

Investment properties        120 677  86 880   7 713   5 553

Tangible assets               73 931  86 551   4 725   5 531

Intangible assets              1 636   1 951     105     125

TOTAL NON-CURRENT ASSETS     521 532 498 520  33 333  31 861

TOTAL ASSETS                 659 341 640 593  42 141  40 941

LIABILITIES AND OWNERS' EQUITY

Debt obligations              19 870  14 380   1 270     919

Customer prepayments             756   2 666      48     170

Supplier payables             39 423  45 535   2 520   2 910

Other short-term borrowings    1 732   1 750     111     112

Tax liabilities               10 902   7 560     697     483

Accrued expenses              10 550  12 044     674     770

Short-term provision             157     300      10      19

Other prepaid revenue          3 643   3 643     233     233

TOTAL CURRENT LIABILITIES     87 033  87 878   5 563   5 616

TOTAL NON-CURRENT LIABILITIE  40 713  17 357   2 602   1 109

TOTAL LIABILITIES            127 746 105 235   8 165   6 725

Minority interests            14 502  14 381     927     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            334 493 450 377  21 378  28 784

TOTAL OWNERS' EQUITY         517 093 520 977  33 049  33 297

TOT.LIABILIT.AND OWNERS' EQU 659 341 640 593  42 141  40 941





INCOME STATEMENT,  1-6/2005

Consolidated,unaudited



in thousand EEK

GROUP                        Q2 2005 Q2 2004 H1 2005 H1 2004



NET SALES                    117 196 103 468 229 205 189 201

Cost of goods sold           -93 013 -84 462-185 022-156 132



Gross profit                  24 183  19 006  44 183  33 069



Operating expenses, incl.    -15 225 -12 022    -973    -768

Marketing expenses            -5 445  -4 807 -10 546  -9 199

Administrative expenses       -9 780  -7 215 -17 823 -14 067

Other revenue                    386     204     507     389

Other expenses                  -266    -132    -422    -240



Operating profit               9 078   7 056  15 899   9 952



Net financial incomes/expens   4 456  19 056  8 557   70 929

Income from subsidiaries        -159     -19     -51    -680



Profit from normal operation  13 375  26 093 24 405   80 201

Corporate Income tax          -2 907     -17 -3 033      -33

Profit after taxes            10 468  26 076  21 372  80 168

Minority interest               -239    -828    -616    -285

Net profit for the year       10 229  25 248  20 756  79 883



Basic earnings per share        0,61    1,56    1,24    4,93



Diluted earnings per share      0,61    1,52    1,24    4,81



in thousand EUR

GROUP                        Q2 2005 Q2 2004 H1 2005 H1 2004



NET SALES                      7 490   6 613  14 649  12 092

Cost of goods sold            -5 945  -5 398 -11 825  -9 979



Gross profit                   1 545   1 215   2 824   2 113



Operating expenses, incl.       -973    -769     -62     -49

Marketing expenses              -348    -308    -674    -588

Administrative expenses         -625    -461  -1 139    -899

Other revenue                     25      13      32      25

Other expenses                   -17      -8     -27     -15



Operating profit                 580     451   1 016     636



Net financial incomes/expens     285   1 218     547   4 533

Income from subsidiaries         -10      -1      -3     -43



Profit from normal operation     855   1 668   1 560   5 126

Corporate Income tax            -186      -1    -194      -2

Profit after taxes               669   1 667   1 366   5 124

Minority interest                -15     -53     -39     -18

Net profit for the year          654   1 614   1 327   5 106



Basic earnings per share        0,04    0,10    0,08    0,32



Diluted earnings per share      0,04    0,10    0,08    0,31





Karin Padjus

Chief accountant

+372 6747 403