2025 6 months and II quarter consolidated unaudited interim report
COMMENTARY FROM MANAGEMENT
Merko Ehitus generated revenue of EUR 83 million in the second quarter of 2025
and EUR 168 million in the first half of the year. Net profit for Q2 amounted to
EUR 11.2 million, while net profit for the six-month period was EUR 21.7
million. The share of real estate development in revenue and profit increased in
the second quarter. Merko launched the construction and sale of 723 new
apartments in the first half of the year, most of them in Vilnius, where the
real estate market remains active.
According to the management of Merko Ehitus, the second quarter results were in
line with expectations with no significant market changes during the quarter.
Supported by a more active real estate market, Merko performance in the real
estate development business has improved, accounting for nearly 30% of our half-
year sales revenue and with the number of apartments handed over to buyers
increasing by almost 85%. In terms of positivity, the Vilnius real estate market
continues to outperform Tallinn and Riga significantly. The Estonian real estate
market has activated in the second quarter, but time will tell whether this was
due to consumers trying to avoid price increases related to the upcoming VAT
hike or it signals a real improvement in consumer confidence.
The volumes in the construction market remain low-side and competition is very
tight across all Merko home markets. Group construction contracts portfolio
increased by EUR 223 million euros in the first half of the year, which is
remarkable considering market situation. According to the management, the public
sector with its infrastructure and defence-related projects, as well as large
energy companies, continue to be the biggest construction services buyers in
Estonia, Latvia, and Lithuania in the upcoming few years.
The largest construction contracts signed in Q2 were the Ülemiste terminal in
Tallinn (worth EUR 84.8 million) and the Rail Baltica mainline section between
Tallinn and Pärnu (expected to be worth approximately EUR 75 million to Merko as
part of the consortium). At the end of Q2, the balance of secured order-book for
external clients stood at EUR 444 million.
During the first half of 2025, Merko handed over 222 apartments and two
commercial units to buyers in Estonia, Latvia, and Lithuania. In the first six
months, Merko launched the construction and sale of 723 new apartments and 21
commercial premises, including total 530 apartments and 15 commercial premises
in the new Shnipishki? Urban project and the next stage of the Vilnel?s Skverai
development in Vilnius. As of the end of Q2, Merko's balance sheet included
1,134 apartments, of which 17% were covered by pre-sale agreements. Merko's
largest ongoing development projects included Uus-Veerenni, Noblessner, and
Lahekalda in Tallinn; Õielehe in Jüri township; and Erminurme in Tartu;
Lucavsala, Arena Garden Towers, Viesturd?rzs, Mezhpils?ta, and Magnolijas in
Riga; and Vilnel?s Skverai and Shnipishki? Urban in Vilnius.
The largest projects underway in Q2 of 2025 in Estonia were the Hyatt hotel
building, Tallinna Hobby Center Kullo, and the City Plaza 2 office building in
Tallinn, as well as the national defence building in Tartu, the Rail Baltica
Ülemiste passenger terminal and fourth stage of the Rail Baltica mainline. In
Lithuania, the largest ones were wind farm infrastructure projects in the
Pag?giai, Telshiai and Pasvalys regions and various national defence buildings
and infrastructures. In Latvia, a solar energy park in V?rme Municipality and a
student hotel in Riga were under construction.
OVERVIEW OF THE II QUARTER AND 6 MONTHS RESULTS
PROFITABILITY
2025 6 months' pre-tax profit was EUR 23.5 million and Q2 2025 was EUR 11.9
million (6M 2024: EUR 18.3 million and Q2 2024 was EUR 13.1 million), which
brought the pre-tax profit margin to 14.0% (6M 2024: 9.0%).
Net profit attributable to shareholders for 6 months 2025 was EUR 21.7 million
(6M 2024: EUR 17.5 million) and for Q2 2025 net profit attributable to
shareholders was EUR 11.2 million (Q2 2024: EUR 13.1 million). 6 months net
profit margin was 12.9% (6M 2024: 8.6%).
REVENUE
Q2 2025 revenue was EUR 82.6 million (Q2 2024: EUR 122.4 million) and 6 months'
revenue was EUR 167.9 million (6M 2024: EUR 203.6 million). 6 months' revenue
decreased by 17.5% compared to same period last year. The share of revenue
earned outside Estonia in 6 months 2025 was 43.8% (6M 2024: 57.9%).
SECURED ORDER BOOK
As of 30 June 2025, the group's secured order book was EUR 443.8 million (30
June 2024: EUR 437.5 million). In 6 months 2025, group companies signed
contracts in the amount of EUR 223.1 million (6M 2024: EUR 139.5 million). In Q2
2025, new contracts were signed in the amount of EUR 172.6 million (Q2 2024: EUR
129.0 million).
REAL ESTATE DEVELOPMENT
In 6 months 2025, the group sold a total of 222 apartments; in 6 months 2024,
the group sold 120 apartments. The group earned a revenue of EUR 44.9 million
from sale of own developed apartments in 6 months 2025 and EUR 21.3 million in
6 months 2024. In Q2 of 2025 a total of 101 apartments were sold, compared to
61 apartments in Q2 2024, and earned a revenue of EUR 20.2 million from sale of
own developed apartments (Q2 2024: EUR 10.6 million).
CASH POSITION
At the end of the reporting period, the group had EUR 25.9 million in cash and
cash equivalents, and equity of EUR 242.3 million (60.1% of total assets).
Comparable figures as of 30 June 2024 were EUR 44.2 million and EUR 206.5
million (49.4% of total assets), respectively. As of 30 June 2025, the group's
net debt was negative EUR 1.1 million (30 June 2024: negative EUR 10.9 million).
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited
in thousand euros
2025 2024 2025 2024 2024
6 months 6 months II quarter II quarter 12 months
Revenue 167,882 203,568 82,646 122,383 539,049
Cost of goods sold (138,811) (179,859) (68,488) (107,558) (443,162)
Gross profit 29,071 23,709 14,158 14,825 95,887
Marketing expenses (2,701) (2,293) (1,426) (1,225) (5,030)
General and
administrative expenses (8,747) (8,630) (4,472) (4,488) (21,908)
Other operating income 1,083 4,393 522 3,069 5,724
Other operating expenses (96) (2,466) (55) (1,513) (2,190)
Operating profit 18,610 14,713 8,727 10,668 72,483
Finance income/costs 4,901 3,595 3,184 2,438 3,931
incl. finance
income/costs from
investments in
subsidiaries - - - - (5,087)
finance income/costs
from joint ventures 4,844 3,655 3,343 2,087 9,951
interest expense (395) (1,116) (185) (461) (1,823)
foreign exchange gain
(loss) (14) (56) (129) 134 (948)
other financial income
(expenses) 466 1,112 155 678 1,838
Profit before tax 23,511 18,308 11,911 13,106 76,414
Corporate income tax
expense (1,835) (863) (695) (45) (11,820)
Net profit for financial
year 21,676 17,445 11,216 13,061 64,594
incl. net profit
attributable to equity
holders of the parent 21,676 17,479 11,216 13,052 64,668
net profit attributable
to non-controlling
interest - (34) - 9 (74)
Other comprehensive
income, which can
subsequently be
classified in the income
statement
Currency translation
differences of foreign
entities 7 24 66 (82) 105
Comprehensive income for
the period 21,683 17,469 11,282 12,979 64,699
incl. net profit
attributable to equity
holders of the parent 21,683 17,501 11,282 12,975 64,764
net profit attributable
to non-controlling
interest - (32) - 4 (65)
Earnings per share for
profit attributable to
equity holders of the
parent (basic and
diluted, in EUR) 1.22 0.99 0.63 0.74 3.65
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
unaudited
in thousand euros
30.06.2025 30.06.2024 31.12.2024
ASSETS
Current assets
Cash and cash equivalents 25,862 44,180 91,879
Short-term deposits 23,000 - 10,000
Trade and other receivables 75,989 94,401 51,419
Prepaid corporate income tax 934 310 270
Inventories 196,552 200,768 196,521
322,337 339,659 350,089
Non-current assets
Investments in joint ventures 26,415 22,570 21,571
Other shares and securities 80 80 80
Other long-term loans and receivables 18,645 20,057 40,196
Deferred income tax assets 4,789 6,077 5,056
Investment property 12,475 12,674 12,606
Property, plant and equipment 18,171 16,648 17,147
Intangible assets 593 488 350
81,168 78,594 97,006
TOTAL ASSETS 403,505 418,253 447,095
LIABILITIES
Current liabilities
Borrowings 9,712 5,840 21,303
Payables and prepayments 112,484 153,595 129,786
Income tax liability 112 5,971 7,101
Short-term provisions 9,165 12,301 7,678
131,473 177,707 165,868
Non-current liabilities
Long-term borrowings 15,018 27,426 12,102
Deferred income tax liability 6,623 1,626 6,148
Other long-term payables 8,080 5,135 8,719
29,721 34,187 26,969
TOTAL LIABILITIES 161,194 211,894 192,837
EQUITY
Non-controlling interests - (187) -
Equity attributable to equity holders of the
parent
Share capital 7,929 7,929 7,929
Statutory reserve capital 793 793 793
Currency translation differences (34) (816) (41)
Retained earnings 233,623 198,640 245,577
242,311 206,546 254,258
TOTAL EQUITY 242,311 206,359 254,258
TOTAL LIABILITIES AND EQUITY 403,505 418,253 447,095
Interim report is attached to the announcement and is also published on NASDAQ
Tallinn and Merko's web page (group.merko.ee (https://group.merko.ee/en/)).
Urmas Somelar
Head of Finance
AS Merko Ehitus
+372 650 1250
[email protected] (mailto:[email protected])
AS Merko Ehitus (group.merko.ee (https://group.merko.ee/en/)) group companies
construct buildings and infrastructure and develop real estate. We create a
better living environment and build the future. We operate in Estonia, Latvia
and Lithuania. As at the end of 2024, the group employed 605 people, and the
group's revenue for 2024 was EUR 539 million.