Harju Elekter                 FINANCIAL RESULTS                 05/09/2003



FINANCIAL REPORT 1-3/2003



Sales and revenues

In the first quarter, the economic growth of Estonia was more than expected.

Industry demonstrated a good rising trend by 10% growth at the beginning of

the year. The building sector continues powerfully. Electricity production

has increased by one-third. As a whole, the economic growth has been more

then double compared to the first quarter of the previous year.



The consolidated net sales of Harju Elekter Group for Q1 2003 amounted to

70,8 MEEK or 4,5 MEUR(Q1 2002: 52,2 MEEK e. 3,3 MEUR). Compared to the same

period last year,the company's turnover grew by 35,8%. Sales on the domestic

market grew by 30,0%, thus accounting for 50,7% (Q1 2002: 53,0%) of the

consolidated net sales. Export sales amounted to 34,9 MEEK or 2,2 MEUR(Q1

2002: 24,5 MEEK e. 1,6 MEUR), which is 42,4% more than for the same period

last year. Sales on the Finnish market increased 56,6%, of which 40,3% was

attributable to the sales of the Finnish subsidiary acquired in Sept.2002.



In the Estonian enterprises of the group, the total sales of the accounting

quarter form 95,5% of the level of the previous year. However, the income of

the first quarter of 2002 includes the sale of products and services of the 

cable harnesses factory amounting to 29,3% of the group’s sales of the 

period, that is 15,3 MEEK (979 TEUR). Apart from the sales of the cable 

harnesses factory in the first quarter of 2002, the comparable sales growth 

of the Estonian enterprises would be 35,2%.



Profit

The Group's operating profit was 4,4 MEEK or 283 TEUR (Q1 2002: 2,8 MEEK or

178 TEUR). The Group's return on sales settled at 6,3% (Q1 2002: 5,3%).



Financial income was 3,4 MEEK or 217 TEUR (Q1 2002: 2,7 MEEK or 171 TEUR).

PKC Group paid dividends for the year 2002 in an amount of 4,6 MEEK (291

TEUR), which is over two times more than in the previous year (1Q 2002:

2,1 MEEK or 132 TEUR). A loss of 1 072 TEUR (69 TEUR) occurred as of

31 March 2003 due to the revaluation of the PKC Group Oyj shares.



In total, the Group's net profit for the 1st quarter of 2003 was 7,6 MEEK or

489 TEUR (Q1 2002: 5,5 MEEK or 348 TEUR. Net profit margin settled at 10,8%

(Q1 2002:10,4%). EPS was 1,42 EEK or 0,09 EUR (Q1 2002:1,01 EEK or 0,06 EUR).



Cash flow, investments and capital employed

Cash flow from operating activities was 4,9 MEEK or 315 TEUR (Q1 2002: 3,7

MEEK or 238 TEUR), outflow due to investing activities 1,3 MEEK or 85 TEUR

(Q1 2002: 0,2 MEEK or 14 TEUR) and financing activities 2,3 MEEK or 148 TEUR

(Q1 2002: 2,1 MEEK or 136 TEUR). During the quarter cash balance on hand and

in bank increased by 1,3 MEEK or 82 TEUR (Q1 2002: 1,4 MEEK or 88 TEUR).



During the accounting period the Group invested 8,6 MEEK or 550 TEUR in

tangible and intangible fixed assets (Q1 2002: 3,1 MEEK or 199 TEUR).

Investments in plant and technology were 2,0 MEEK or 127 TEUR (Q1 2002:

1,1 MEEK or 68 TEUR), into the buildings and reconstructions 6,4 MEEK or

409 TEUR (Q1 2002: 1,0 MEEK or 66 TEUR).



In the accounting quarter, AS Harju Elekter purchased 9 thousand shares of

PKC Group Oyj and paid  1 061 TEEK (68 TEUR) for the investment. After this

acquisition, Harju Elekter owns 12% of the shares of PKC Group.



AS Harju Elekter obtained production equipment for the price of 1,4 MEEK (89

TEUR) on the basis of a financial lease contract. Long-term loan and capital

lease repayments during the accounting period accounted for 2,3 MEEK or 148

TEUR (Q1 2002: 2,1 MEEK or 136 TEUR).



Balance sheet

In accordance with the new Accounting Act of the Republic of Estonia and new

standards of the Estonian Accounting Standards Board, which entered into force

on 1 January 2003, Harju Elekter Group changed the accounting method of

financial instruments. As from 2003, financial instruments are recorded in the

balance sheet using the method of fair value. Financial investments (shares of

PKC Group Oyj) in the balance sheet as of 31 December 2002 were adjusted to

their market value according to the rate of the last trading day of 2002. The

difference between the fair value and balance sheet value arising from the

revaluation was 53,9 MEEK (3 511 TEUR), by which the opening balance of

retained earnings under the owners’ equity and the opening balance of other

long-term shares under long-term financial investments were increased. As a

result, the proportion of owners’ equity increased in the balance sheet from

76,2% to 80,8% as of 31 December 2002 and fixed assets increased from 62,8%

to 70,0% in the adjusted opening balance sheet of 2003. As of 31 March 2003,

fixed assets formed and owners’ equity formed 69,9% and 80,8% of the

consolidated balance sheet total, respectively.



Personnel

The average number of employees in the group was 280 (Q1 2002: 633). As of

the balance sheet date 31.03.03 the group employed 291 persons (645 in 2002).

The indicators of 2002 include the number of employees of the cable harnesses

factory.



Important events

In January, Harju Elekter submitted an application to transfer the shares of

the company into the main list of the Tallinn Stock Exchange. The application

was satisfied and the shares of the company (HAE1T) are traded in the main

list of the Tallinn Stock Exchange as from 17 February 2003. On 31 March, the

closing price of the share was 58,67 EEK (3,75 EEK).



Post-balance-sheet events

The AGM of the shareholders took place on April 11. The general meeting

decided to pay dividends to the owners at the rate of 2,00 EEK (0,13 EUR) per

share. Dividends shall be distributed to the shareholders on May 12, 2003.



In April, AS Harju Elekter acquired a long-term loan from a Finnish bank in

the amount of 1 MEUR (15,6 MEEK). The loan is repayable within 8 years.

According to the agreement between the parties, the interest of the loan is

not made public. Loan money is used for the construction of a new production

hall within the framework of the extension of PKC Eesti. The total cost of the

project is 26 MEEK (1,7 MEUR) and own funds will be used for financing in

addition to the loan. PKC Eesti, the former cable harnesses factory of Harju

Elekter, leases production premises from Harju Elekter from July 2002. Today,

Harju Elekter leases a total of 13 400 m2 to PKC Eesti, including 4 700 m2 in

Haapsalu. By launching the new production hall in July 2003, another 4 500 m2

of leased premises will be added in Keila.







Andres Allikmäe

Chairman of the Management Board

+372 6 747 400





BALANCE SHEETS



BALANCE SHEET OF THE GROUP, 31.03.2003

Consolidated, unaudited

in thousand                     EEK               EUR

ASSETS                       31.03.03 31.12.02 31.03.03 31.12.02

Cash, bank                      12 882   11 620      823      743

Total customer receivables      27 149   28 705    1 735    1 835

Other current receivables        2 306    2 035      147      130

Accrued income                       2       14        0        1

Prepaid expenses                 1 514      753       97       48

Total current receivables       30 971   31 507    1 979    2 014

Raw materials and inventories   36 943   35 527    2 361    2 271

Goods                            5 573    4 616      356      295

Prepayments to suppliers             8        0        1        0

Total inventories               42 525   40 142    2 718    2 566

TOTAL CURRENT ASSETS            86 378   83 270    5 521    5 322

Stock and shares in ass.comp.   26 661   26 587    1 704    1 699

Other shares                    70 791   70 803    4 524    4 525

Other long-term receivables        379      379       24       24

Total financial investments     97 831   97 768    6 253    6 249

Plant and equipment             78 621   77 556    5 025    4 957

Other equipment and fixtures    48 371   46 385    3 092    2 965

Other inventory                  3 378    3 277      216      209

Accumulated depreciation       -37 361  -35 288   -2 388   -2 255

Construction-in-progress         8 898    3 556      569      227

Prepayments for fixed assets       151       28       10        2

Total tangible assets          102 059   95 514    6 523    6 104

Licences                         1 111    1 206       71       77

Goodwill                             0       16        0        1

Total intangible assets          1 111    1 222       71       78

TOTAL NON-CURRENT ASSETS       201 001  194 505   12 846   12 431

TOTAL ASSETS                   287 379  277 774   18 367   17 753

LIABILITIES AND OWNERS' EQUITY

Debt obligations                10 346   12 360      661      790

Customer prepayments               144      193        9       12

Supplier payables               25 006   22 438    1 598    1 434

Other short-term borrowings      1 274    1 251       81       80

Tax liabilities                  3 121    5 405      199      345

Accrued expenses                 7 543    5 869      482      375

Other prepaid revenue              971        0       62        0

TOTAL CURRENT LIABILITIES       48 405   47 516    3 094    3 037

TOTAL NON-CURRENT LIABILITIES    6 778    5 707      433      365

TOTAL LIABILITIES               55 183   53 223    3 527    3 402

Share capital                   54 000   54 000    3 451    3 451

Restricted reserves              8 600    8 600      550      550

Retained earnings              161 951  108 698   10 351    6 947

Net profit for the year          7 645   53 254      489    3 404

TOTAL OWNERS' EQUITY           232 196  224 551   14 840   14 351

TOT.LIABIL.AND OWNERS' EQUITY  287 379  277 774   18 367   17 753





BALANCE SHEET OF THE PARENT COMPANY, 31.03.2003

Unaudited

in thousand                     EEK               EUR

ASSETS                       31.03.03.31.12.02.31.03.03.31.12.01.

Cash, bank                       8 889   11 165      568      714

Total customer receivables      13 003   12 075      831      772

Other current receivables        7 855    8 056      502      515

Prepaid expenses                   928      564       59       36

Total current receivables       21 786   20 694    1 392    1 323

Raw materials and inventories   20 036   16 690    1 281    1 067

Goods                            5 525    4 575      353      292

Prepayments to suppliers             8        0        1        0

Total inventories               25 569   21 265    1 634    1 359

TOTAL CURRENT ASSETS            56 244   53 124    3 595    3 395

Stock and shares in subs.       14 801   13 759      946      879

Other l-term receiv.from subs    6 780    6 780      433      433

Stock and shares in ass.compa   26 661   26 587    1 704    1 699

Other shares                    70 791   70 803    4 524    4 525

Other long-term receivables        379      379       24       24

Total financial investments    119 412  118 308    7 632    7 561

Plant and equipment             78 494   77 428    5 017    4 949

Other equipment and fixtures    27 930   26 033    1 785    1 664

Other inventory                  1 761    1 751      113      112

Accumulated depreciation       -30 216  -28 798   -1 931   -1 841

Construction-in-progress         8 898    3 556      569      227

Prepayments for fixed assets       151       28       10        2

Total tangible assets           87 019   79 998    5 562    5 113

Licences                           685      750       44       48

Total intangible assets            685      750       44       48

TOTAL NON-CURRENT ASSETS       207 115  199 055   13 237   12 722

TOTAL ASSETS                   263 359  252 180   16 832   16 117

LIABILITIES AND OWNERS' EQUITY

Debt obligations                 4 209    5 516      269      353

Customer prepayments                97      193        6       12

Supplier payables               17 247   13 501    1 102      863

Other short-term borrowings      1 476    1 269       94       81

Tax liabilities                  1 041    2 525       67      161

Accrued expenses                 3 618    3 191      231      204

Other prepaid revenue              971        0       62        0

TOTAL CURRENT LIABILITIES       28 659   26 195    1 832    1 674

TOTAL NON-CURRENT LIABILITIES    2 505    1 433      160       92

TOTAL LIABILITIES               31 163   27 628    1 992    1 766

Share capital                   54 000   54 000    3 451    3 451

Restricted reserves              8 600    8 600      550      550

Retained earnings              161 951  108 698   10 351    6 947

Net profit for the year          7 645   53 254      489    3 404

TOTAL OWNERS' EQUITY           232 196  224 551   14 840   14 351

TOT.LIABIL. AND OWNERS' EQUIT  263 359  252 180   16 832   16 117





INCOME STATEMENTS



INCOME STATEMENT OF THE GROUP,  2003 Q1

Consolidated,unaudited

thousand                        EEK               EUR

                                Q1 03    Q1 02    Q1 03    Q1 02

Net sales                       70 842   52 181    4 528    3 335

Cost of goods sold             -57 140  -42 888   -3 652   -2 741



Gross profit                    13 702    9 293      876      594



Operating expences, incl.       -9 096   -6 521     -581     -417

  marketing expences            -3 713   -2 586     -237     -165

  admin. and general expences   -5 384   -3 935     -344     -251

Other operating revenue              5      196        0       13

Other operating charges           -183     -184      -12      -12



Operating profit                 4 428    2 784      283      178



Fin.incomes and expences, incl.

 - from shares of associated        74      780        5       50

 - from other investments        3 486    2 216      223      142

 - interest expenses              -212     -334      -14      -21

 - profit/loss from foreign e      -16

 - other fin.expences/incomes       58        5        4        0

Total fin.incomes and expence    3 390    2 666      217      170



Profit from the ord.activitie    7 818    5 450      500      348

Tax                               -173        0      -11        0

Net profit for the current pe    7 645    5 450      489      348



Basic earning per share           1,42     1,01     0,09     0,06

Diluted earning per share         1,40     1,01     0,09     0,06





INCOME STATEMENT OF THE PARENT COMPANY,  2003 Q1

unaudited

thousand                        EEK               EUR

                                Q1 03    Q1 02    Q1 03    Q1 02

Net sales                       40 283   44 322    2 575    2 833

Cost of goods sold             -31 913  -37 184   -2 040   -2 376



Gross profit                     8 370    7 139      535      456



Operating expences, incl.       -5 323   -5 085     -340     -325

  marketing expences            -2 089   -1 866     -133     -119

  admin. and general expences   -3 234   -3 219     -207     -206

Other operating revenue             10      160        1       10

Other operating charges           -150     -183      -10      -12



Operating profit                 2 907    2 032      186      130



Fin.incomes and expenses, incl.

 - from shares of subsidiarie    1 042      536       67       34

 - from shares of ass.compani       74      780        5       50

 - from other investments        3 486    2 216      223      142

 - interest expenses               -62     -174       -4      -11

 - profit/loss from foreign e        0        0        0        0

 - other fin.expences/incomes      198       60

Total fin.incomes and expense    4 738    3 418      303      218

                                                       0        0

Profit from the ord.activitie    7 645    5 450      489      348

Net profit for the current pe    7 645    5 450      489      348



Basic earning per share           1,42     1,01     0,09     0,06

Diluted earning per share         1,40     1,01     0,09     0,06







Karin Padjus

Chief Accountant

+372 6 747 403





Moonika Vetevool

PR manager

+372 6 712 761