Harju Elekter                 FINANCIAL RESULTS                 03/05/2002



COMMENTARY TO FINANCIAL RESULTS Q4 2001



Sales and Revenue

The consolidated net sales and revenues of AS Harju Elekter in the twelve

months of 2001 were 195.5 million EEK (12.5 MEUR), which amounts to 95.1% of

the last year level. At the same time, the volume of the sales of the parent

company practically remained on the level of 2000, amounting to 99.8% of it.



Sales to the domestic market increased by 15.4% and constituted 59.6% of the

consolidated net sales and revenues (2000: 49.1%).



Export accounted for 40.4% of the volume of sales (2000: 50.9%). The total

volume of sales was by 24.5% smaller than under the same period in the

previous year. The major decline in export markets was caused by a general

decrease in demand in the world’s car and electronics industry. The production

of wiring harnesses of vehicles and electronic equipment decreased by 18.5%

and the production and sales of telecommunication products by 53.5%.



Profit

The twelve-month operating profit of the group was 11. MEEK, that is, 0.7 MEUR

(2000: 17.0 MEEK equalling 1.1 MEUR). Both the reduction in the sales proceeds

caused by export volumes and the additional expenditure related to the

introduction of new products and launch of projects can be considered as the

main reasons for the decrease in operating profit. In the group, the gross

profit of the twelve months of 2001 was 6.0% (2000: 8.3%), while the gross

profit margin remained at 19% (2001: 19.1%; 2000: 18.9%). The revenue from

financial activities was 9.1 MEEK, that is,0.6 MEUR (2000: 12.1 MEEK equalling

0.8 MEUR).



In the accounting year, the financial income from the associated companies was

3.6 million kroons below that of 2000, which included the financial income of

3.1 MEEK (0.2 MEUR) earned from the sale of the shares of AS Glamox Harju

Elekter.



The net profit of the group was 20.7 MEEK, that is, 1.3 MEUR in 2001 (2000:

29.2 MEEK equalling 1.9 MEUR). The net profit margin was 10.6% (2000: 14.2%).

The net profit per share amounted to 3.84 EEK, that is, to 0.25 EUR (2000:

5.40 EEK equalling 0.35 EUR).



The management board decided to submit a proposal to the general meeting to

pay dividends of 1.40 EEK per share for the financial year of 2001.



Investments and Capital Use

Under the accounting period, new investments in the amount of 10.1 MEEK (0.6

MEUR) were made in the tangible non-current assets in the group, in 2000, the

amount was 28.3 MEEK (1.8 MEUR). The parent company invested nearly 1 MEEK

(0.1 MEUR) in the construction of production premises for the manufacturing of

fiberoptic connection cables and accessories in the subsidiary AS Eltek and

3.5 MEEK (0.2 MEUR) in the procurement of high-tech equipment required for

production in AS Eltek. In June 2001, Harju Elekter invested 1 MEEK (0.1 MEUR)

in increasing the share capital of the subsidiary.



Balance Sheet

The consolidated balance sheet total was 176.9 MEEK (11.3 MEUR) at the end of

December 2001. Equity capital increased by 12.3 %, that is, +13.7 MEEK (+0.9

MEUR) during the year. As of the balance sheet date, the long-term and short-

term liabilities of the group amounted to 27.2 MEEK (1.7 MEUR), of which

12.3 MEEK (0.8 MEUR) were of long-term nature. Liabilities to credit

institutions have decreased by 3.8 MEEK (0.2 MEUR) during the year.





Karin Padjus

Chief accountant

Tel 6747 403





Moonika Vetevool

PR manager

+372 6712 761