Harju Elekter                 FINANCIAL RESULTS                 08/07/2003



FINANCIAL RESULTS FOR H1 2003



The consolidated net sales of Harju Elekter Group for H1 2003 amounted to

149,6 MEEK or 9,6 MEUR (H1 2002: 125,2 MEEK or 8,0 MEUR). The Group's net

profit for the H1 2003 was 65,6 MEEK or 4,2 MEUR (H1 2002: 11,3 MEEK or

719 TEUR)and EPS 12,14 EEK or 0,78 EUR (H1 2002: 2,08 EEK or 0,13 EUR).



According to Andres Allikmäe, Chairman of the Management Board, the

Group’s results in the first half of 2003 met every expectation. Larger

than usual development and investments projects were under way, each

should start to pay back in the near future already.



Sales and revenues

The consolidated net sales of Harju Elekter Group for H1 2003 amounted to

149,6 MEEK or 9,6 MEUR (H1 2002: 125,2 MEEK or 8,0 MEUR),i.e. 19,5% growth.

Sales on the domestic market grew by 18,4%, thus accounting for 51,8% (H1

2002: 52,2%) of the consolidated net sales. Export sales amounted to 72,2

MEEK or 4,6 MEUR (H1 2002: 59,8 MEEK or 3,8 MEUR), i.e. 20,7% growth. Sales

on the Finnish market increased 25,4%.



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

period form 86,2% of the level of the previous year. However, the income of

the H1 2002 includes the sale of products and services of the cable

harnesses factory amounting to 31,1% of the group’s sales of the period,

that is 38,9 MEEK(2,5 MEUR).Apart from the sales of the cable harnesses

factory in the H1 2002, the comparable sales growth of the Estonian

enterprises would be 25,1%.



Profit

The Group's operating profit was 7,9 MEEK or 504 TEUR (H1 2002: 6,5 MEEK or

415 TEUR).



Compared to last year, the marketing and general administrative costs in

the first quarter increased by almost 5 MEEK (318 TEUR).The income statement

for six months of this year include the operating costs of the subsidiary

Satmatic OY acquired in September 2002, which are nearly 4 MEEK (250 TEUR)

greater than the expenses of the subsidiary AJT Harju Elekter in the first

half of 2002 due to the different wage levels in Estonia and Finland. The

profit margin of the Group was 5,3% (5,2% in the first half of 2002).



The operating profit of the mother company for six months increased by 12%

compared to the same period last year (6,9 MEEK or 444 TEUR in the first

half of 2003; 6,2 MEEK or 394TEUR in the first half of 2002). The profit

margin also improved by 1,1 percentage points.



Financial income was 57,7 MEEK or 3,7 MEUR (H1 2002: 4,0 MEEK or 258 TEUR).

PKC Group paid dividends for the year 2002 in an amount of 4,6 million EEK

(291 TEUR), which is over two times more than in the previous year(H1 2002:

2,1 MEEK or 132 TEUR). Revaluation of the shares of PKC Group Oyj as at the

end of the quarter, 30 June 2003, yielded a profit of 52,3 MEEK (3,3 MEUR).

As from 1 January 2003, the shares of PKC are valued at market price on the

balance sheet. Their price on the last trading day of the financial year

ending on 31 December 2002 on the Helsinki Stock Exchange was 7,10 EUR, but

on 30 June 2003 the price was already 12,28 EUR. Thus, the market price grew

by 73,0%.



In total, the Group's net profit for the H1 2003 was 65,6 MEEK or 4,2 MEUR

(H1 2002: 11,3 MEEK or 719 TEUR). Net profit margin settled at 43,8%(H1 2002:

9,0%). EPS was 12,14 EEK or 0,78 EUR (H1 2002: 2,08 EEK or 0,13 EUR). If we

eliminate the profit from revaluation of the shares of PKC in the results

for 2003, the comparable net profit for the period would be 13,2 MEEK (846

TEUR) and the rate of return on net profit would be 8,9%, about the same as

in 2002.



Cash flow, investments and capital employed

Cash flow from operating activities was 9,1 million EEK or 584 TEUR (H1

2002: 9,3 MEEK or 593 TEUR), outflow due to investing activities 15,5

million EEK or 990 TEUR (H1 2002: 2,9 MEEK or 187 TEUR) and financing

activities 2,3 MEEK or 147 TEUR (H1 2002: ourflow 9,9 MEEK or 632 TEUR).

During the first half of 2003 cash balance on hand and in bank decreased

by 4,1 MEEK or 259 TEUR (H1 2002: 3,5 MEEK or 226 TEUR).



During the accounting period the Group invested 26,8 MEEK or 1,7 MEUR in

tangible and intangible fixed assets (H1 2002: 8,2 MEEK or 526 TEUR).

Investments in plant and technology were 2,2 MEEK or 140 TEUR (H1 2002:3,7

MEEK or 239 TEUR), into the buildings and reconstructions 23,5 MEEK or 1,5

MEUR (H1 2002: 2,0 MEEK or 128 TEUR).



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

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



For financing the extension to be built to PKC Eesti, Harju Eelekter raised

a long-term loan in the amount of 15,6 MEEK (995 TEUR). Harju Elekter

obtained production equipment for the price of 1,7 MEEK (106 TEUR) on the

basis of a financial lease contract. Long-term loan and capital lease

repayments during the accounting period accounted for 4,2 MEEK or 272 TEUR

(H1 2002: 4,4 MEEK or 278 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 million EEK (3,5 MEUR), 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.



Within six months, the cost of assets on the consolidated balance sheet

increased by 83 MEEK or 5,3 MEUR (15 MEEK or 0,97 MEUR within six months of

2002), reaching 361 MEEK or 23 MEUR as at 30 June 2003 (192 MEEK or 12MEUR

on 30 June 2002). The value of fixed assets increased by 73 MEEK or 5 MEUR

over the six months, constituting 74,4% of total assets as at the end of the

period. Current receivables increased by 7,5 MEEK or 0,48 MEUR in the first

half of the year (8,5 MEEK or 0,54 MEUR in the first half of 2002, which

constituted an increase in accounts receivable) and inventories grew by 5,6

MEEK or 0,35 MEUR (7,6 MEEK or 0,49 EUR in the first half of 2002). Non-trade

receivables include the unpaid dividend of Keila Kaabel in the amount of 1,5

MEEK or 97 TEUR. The prepaid VAT of the Estonian companies of the Group and

the prepaid import VAT have increased by 2,5 MEEK or 0,16 MEUR over the six

months. Experience has shown that accounts receivable and inventories

increase by the end of the first half-year due to seasonal reasons. To ensure

smooth business operation, larger inventories are stored for the holiday

period.



On the side of liabilities, accounts payable have increased by 11 MEEK or

0,68 MEUR (14 MEEK or 0,9 MEUR in the first half of 2002), which is caused

by larger purchase invoices of production inventories in June, on the one

hand, and by the fact that investments in the amount of 18,2 MEEK or 1,2

MEUR of an investment total of 26,8 MEEK or 1,7 MEUR were made in the second

quarter, on the other hand. Accounts payable for construction, including VAT,

amounted to 5,8 MEEK or 0,36 MEUR in the total accounts payable. Owners’

equity comprised 77,4% of the assets (67,2% as at 30 June 2002), having

increased by 54 MEEK or 3,5 MEUR over the half-year.



Personnel

The average number of employees in the group was 285 (H1 2002: 634). As of

the balance sheet date 30.06.03 the group employed 296 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.



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 paid to the shareholders on May 9, 2003.



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

in the amount of 1 million EUR  (15,6 MEEK). The loan is repayable within

8 years. Loan money is used for the construction of a new production hall

within the framework of the extension of PKC Eesti.



The shareholders of AS Keila Kaabel, a related company of Harju Elekter,

decided that a factory  extension project would be launched. Construction

work began in June, and the final deadline on the end of this year.

According to the business plan, the sales of the factory would double in

the next two years, when the project has been implemented.



Harju Elekter will invest 18 MEEK (1,15 MEUR) in the building extension for

the larger production facilities. Draka NK Cables will provide the equipment

and related know-how. The equipment cost 21 MEEK (1,35 MEUR).







Andres Allikmäe

Chairman of the Board

+372 6 747 400





BALANCE SHEETS



BALANCE SHEET OF THE GROUP, 30.06.2003

Consolidated, unaudited

in thousand                      EEK           EUR

ASSETS                         30.06.0331.12.0230.06.0331.12.02

Cash, bank                        7 540  11 620     482     743

Total customer receivables       31 672  28 705   2 024   1 834

Other current receivables         3 828   2 035     245     130

Accrued income                        0      14       0       1

Prepaid expenses                  3 505     753     224      48

Total current receivables        39 005  31 507   2 493   2 013

Raw materials and inventories    39 982  35 527   2 555   2 271

Goods                             5 600   4 616     358     295

Prepayments to suppliers            113       0       7       0

Total inventories                45 695  40 143   2 920   2 566

TOTAL CURRENT ASSETS             92 240  83 270   5 895   5 322

Stock and shares in ass.compani  24 774  26 586   1 583   1 699

Other shares                    124 188  70 803   7 937   4 525

Other long-term receivables          76     379       5      24

Total financial investments     149 038  97 768   9 525   6 249

Plant and equipment              78 621  77 556   5 025   4 957

Other equipment and fixtures     48 916  46 385   3 126   2 965

Other inventory                   3 510   3 277     224     209

Accumulated depreciation        -39 339 -35 288  -2 514  -2 255

Construction-in-progress         25 970   3 556   1 660     227

Prepayments for fixed assets        460      28      29       2

Total tangible assets           118 138  95 514   7 550   6 104

Licences                          1 234   1 206      79      77

Goodwill                              0      16       0       1

Total intangible assets           1 234   1 222      79      78

TOTAL NON-CURRENT ASSETS        268 410 194 504  17 155  12 431

TOTAL ASSETS                    360 650 277 774  23 050  17 753

LIABILITIES AND OWNERS' EQUITY

Debt obligations                 11 404  12 360     729     790

Customer prepayments                331     193      21      12

Supplier payables                33 135  22 438   2 118   1 434

Other short-term borrowings       1 519   1 251      97      80

Tax liabilities                   4 124   5 405     264     345

Accrued expenses                  8 424   5 869     538     375

Other prepaid revenue               971       0      62       0

TOTAL CURRENT LIABILITIES        59 908  47 516   3 829   3 037

TOTAL NON-CURRENT LIABILITIES    21 425   5 707   1 369     365

TOTAL LIABILITIES                81 333  53 223   5 198   3 402

Share capital                    54 000  54 000   3 451   3 451

Restricted reserves               8 600   8 600     550     550

Retained earnings               151 152 108 698   9 661   6 947

Net profit for the year          65 565  53 254   4 190   3 404

TOTAL OWNERS' EQUITY            279 317 224 551  17 852  14 351

TOT.LIABIL. AND OWNERS' EQUITY  360 650 277 774  23 050  17 753





BALANCE SHEET OF THE PARENT COMPANY, 30.06.2003

Consolidated, unaudited

in thousand                      EEK           EUR

ASSETS                         30.06.0331.12.0230.06.0331.12.02.

Cash, bank                        5 365  11 165     343     714

Total customer receivables       15 074  12 075     963     772

Other current receivables         8 235   8 056     526     515

Prepaid expenses                  2 914     564     186      36

Total current receivables        26 223  20 694   1 676   1 323

Raw materials and inventories    19 970  16 690   1 276   1 067

Goods                             5 552   4 575     355     292

Prepayments to suppliers             27       0       2       0

Total inventories                25 549  21 265   1 633   1 359

TOTAL CURRENT ASSETS             57 137  53 124   3 652   3 395

Stock and shares in subs.-ies    14 198  13 759     907     879

Other long-term receiv.from sub   6 780   6 780     433     433

Stock and shares in associated   24 774  26 587   1 583   1 699

Other shares                    124 188  70 803   7 937   4 525

Other long-term receivables          77     379       5      24

Total financial investments     170 017 118 308  10 866   7 561

Plant and equipment              78 494  77 428   5 017   4 949

Other equipment and fixtures     28 258  26 033   1 806   1 664

Other inventory                   1 849   1 751     118     112

Accumulated depreciation        -31 538 -28 798  -2 016  -1 841

Construction-in-progress         25 970   3 556   1 660     227

Prepayments for fixed assets        460      28      29       2

Total tangible assets           103 493  79 998   6 614   5 113

Licences                            620     750      40      48

Total intangible assets             620     750      40      48

TOTAL NON-CURRENT ASSETS        274 130 199 055  17 520  12 722

TOTAL ASSETS                    331 267 252 180  21 172  16 117

LIABILITIES AND OWNERS' EQUITY

Debt obligations                  4 437   5 516     284     353

Customer prepayments                283     193      18      12

Supplier payables                21 790  13 501   1 393     863

Other short-term borrowings       1 611   1 269     103      81

Tax liabilities                   2 012   2 525     129     161

Accrued expenses                  3 782   3 191     242     204

Other prepaid revenue               971       0      62       0

TOTAL CURRENT LIABILITIES        34 887  26 195   2 230   1 674

TOTAL NON-CURRENT LIABILITIES    17 063   1 433   1 091      92

TOTAL LIABILITIES                51 951  27 628   3 320   1 766

Share capital                    54 000  54 000   3 451   3 451

Restricted reserves               8 600   8 600     550     550

Retained earnings               151 151 108 698   9 660   6 947

Net profit for the year          65 565  53 254   4 190   3 404

TOTAL OWNERS' EQUITY            279 317 224 551  17 852  14 351

TOT.LIABIL. AND OWNERS' EQUITY  331 267 252 180  21 172  16 117





INCOME STATEMENTS



INCOME STATEMENT OF THE GROUP,  H1 2003

Consolidated,unaudited

in thousand                    EEK             EUR

                               H1 2003 H1 2002 H1 2003 H1 2002



NET SALES                       149 566 125 172   9 559   8 000

Cost of goods sold             -121 692-103 905  -7 778  -6 641



Gross profit                     27 874  21 267   1 781   1 359



Operating expenses, incl.       -19 660 -14 679  -1 256    -938

Marketing expenses               -7 756  -5 646    -496    -361

Administrative expenses         -11 904  -9 033    -760    -577

Other revenue                        42     239       3      15

Other expenses                     -376    -339     -24     -21



Operating profit                  7 880   6 488     504     415



Financial income and expenses, incl.

 -from assoc.companies            1 238   2 357      79     151

 -from other holdings            56 884   2 226   3 635     142

 -interest expense                 -497    -624     -32     -40

 -profit/loss from for.exchange     -30       0      -2       0

 -other fin.income/expenses          90      84       6       5

Total financial income and  exp  57 685   4 043   3 686     258



Profit from normal operations    65 565  10 531   4 190     673

External income                       0     726       0      46

Corporate Income tax                  0       0       0       0

Net profit for the year          65 565  11 257   4 190     719



Basic earnings per share          12,14    2,08    0,78    0,13



Diluted earnings per share        11,99    2,08    0,77    0,13





INCOME STATEMENT OF THE GROUP,  2003 Q2

Consolidated,unaudited

in thousand                    EEK             EUR

                               Q2  2003Q2  2002Q2  2003Q2  2002



NET SALES                        78 724  72 991   5 031   4 665

Cost of goods sold              -64 551 -61 017  -4 125  -3 900



Gross profit                     14 173  11 974     906     765



Operating expenses, incl.       -10 563  -8 158    -675    -521

Marketing expenses               -4 043  -3 059    -258    -195

Administrative expenses          -6 520  -5 099    -417    -326

Other revenue                        37      43       2       3

Other expenses                     -194    -155     -12     -10



Operating profit                  3 453   3 704     221     237



Financial income and expenses, incl.

 -from associated companies       1 164   1 577      74     101

 -from other holdings            53 398      11   3 413       1

 -interest expense                 -285    -290     -18     -19

 -profit/loss from for.exch.        -14       0      -1       0

 -other financial income/expens      32      79       2       5

Total financial income and  exp  54 295   1 377   3 470      88



Profit from normal operations    57 748   5 081   3 691     325

External income                       0     726       0      46

Corporate Income tax                172       0      11       0

Net profit for the year          57 920   5 807   3 702     371



Basic earnings per share          10,73    1,08    0,69    0,07



Diluted earnings per share        10,59    1,08    0,68    0,07





INCOME STATEMENT OF THE PARENT COMPANY, H1 2003

unaudited

in thousand                    EEK             EUR

                               H1 2003 H1 2002 H1 2003 H1 2002



NET SALES                        89 591  92 723   5 726   5 926

Cost of goods sold              -70 798 -75 572  -4 525  -4 830



Gross profit                     18 793  17 151   1 201   1 096



Operating expenses, incl.       -11 591 -10 934    -741    -699

Marketing expenses               -4 375  -4 393    -280    -281

Administrative expenses          -7 216  -6 541    -461    -418

Other revenue                        59     205       4      13

Other expenses                     -314    -256     -20     -16



Operating profit                  6 947   6 166     444     394



Financial income and expenses, incl.

 -from subsidiaries                 376  -3 351      24    -214

 -from associated companies       1 238   2 357      79     151

 -from other holdings            56 884   2 227   3 636     142

 -interest expense                 -217    -280     -14     -18

 -profit/loss from for.exch.        -15     -12      -1      -1

 -other fin.income/expenses         352     111      22       7

Total financial income and  exp  58 618   1 052   3 746      67



Profit from normal operations    65 565   7 218   4 190     461

External income                       0   4 039       0     258

Net profit for the year          65 565  11 257   4 190     719



Basic earnings per share          12,14    2,08    0,78    0,13



Diluted earnings per share        11,99    2,08    0,77    0,13



INCOME STATEMENT OF THE PARENT COMPANY 2003 Q2

unaudited

in thousand                    EEK             EUR

                               Q2  2003Q2  2002Q2  2003Q2  2002



NET SALES                        49 308  48 401   3 151   3 093

Cost of goods sold              -38 857 -38 388  -2 483  -2 453



Gross profit                     10 451  10 013     668     640



Operating expenses, incl.        -6 296  -5 849    -403    -374

Marketing expenses               -2 295  -2 527    -147    -162

Administrative expenses          -4 001  -3 322    -256    -212

Other revenue                        50      44       3       3

Other expenses                     -164     -72     -10      -5



Operating profit                  4 041   4 136     258     264



Financial income and expenses, incl.

 -from subsidiaries                -665  -3 888     -42    -248

 -from associated companies       1 163   1 577      74     101

 -from other holdings            53 398      11   3 413       1

 -interest expense                 -155    -106     -10      -7

 -profit/loss from for.exch.        -15     -13      -1      -1

 -other fin.income/expenses         153      51      10       3

Total financial income and  exp  53 879  -2 368   3 444    -151



Profit from normal operations    57 920   1 768   3 702     113

External income                       0   4 039       0     258

Net profit for the year          57 920   5 807   3 702     371



Basic earnings per share          10,73    1,08    0,69    0,07



Diluted earnings per share        10,59    1,08    0,68    0,07







Karin Padjus

Chief accountant

67 47 403





Moonika Vetevool

PR manager

+372 6712 761