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Merko Ehitus increases revenue in Q1 of 2024

Q1 2024 revenue for Merko Ehitus was EUR 81.2 million, representing 7.2% growth compared to the same period a year ago. Net profit for the quarter was EUR 4.4 million. Merko has delivered 59 apartments and 7 commercial units to buyers so far this year.

“The apartment market behaved as expected in the first quarter and our figures for new sales reflected that. There is no basis for expecting results comparable to 2023 in real estate development. In the new and different market situation, we have successfully refocused our activities and been able to compensate the drop in volumes from residential development with construction service sales. Net profit decreased, but the result was better than we anticipated based on the changes in the proportion of our core businesses,” said Ivo Volkov, the Chairman of the Management Board of AS Merko Ehitus.  

In Q1 2024, the group companies entered into new construction contracts worth EUR 10.5 million and the balance of secured order-book was EUR 419 million at quarter’s end. In the first three months of the year, construction service business segment accounted for 83.7% of the group’s revenue.  “I’m glad to see that private sector clients have grown somewhat more active on the construction services market. It appears they have grown used to the new price levels and are again contemplating expansion of their business. Contracts for defence facilities and energy infrastructure are active and hopefully the next Rail Baltica projects will come up for procurement soon. Our portfolio of contracts is strong. In April, a noteworthy energy infrastructure contract in Latvia and a contract for additional work on the NATO training centre in Lithuania were added,” commented Ivo Volkov about the construction services market.

In Q1, Merko delivered 59 apartments and 7 commercial units to buyers, invested a total of EUR 11.6 million into development projects, and launched construction and sales of 112 new apartments in three new development projects: Õielehe in Jüri, the new phase of Erminurme in Tartu and Lucavsala in Riga. As of the end of Q1, the group companies had 450 apartments under construction, approximately 9% of which were covered by preliminary sale contracts. The largest projects in progress were Uus-Veerenni, Noblessneri and Lahekalda in Tallinn, Erminurme in Tartu, Viesturdārzs, Mežpilsēta and Magnolijas in Riga and Vilnelės Skverai in Vilnius.

The largest projects under construction in Estonia in Q1 of 2024 were the TKM Group’s logistics centre, Hampton by Hilton and Hyatt hotel buildings, Arter Quarter, Estonian Defence Forces buildings on Ämari base, a tram line between Old City Harbour and Rail Baltica Ülemiste passenger terminal and the first phase of the Ülemiste multimodal transport terminal and Rail Baltica’s Tõdva highway overpasses. In Lithuania, the biggest construction sites were wind farm infrastructure in regions of Kelmė and Pagėgiai, a substation in Kelmė and various buildings and infrastructure for NATO training centres.