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Merko Ehitus revenue and net profit up for both Q2 and H1

Q2 revenue for Merko Ehitus was EUR 86 million and net profit was EUR 6.4 million. The revenue for H1 grew by 12% to EUR 146 million and net profit by 19% to EUR 9.8 million. This year, Merko has sold 150 apartments and launched the construction of more than 800 apartments.

“The construction sector is more and more influenced by the rapid price rise of materials and problems related to supply, as a result of which the risks related to on-time completion of construction objects and staying within budget have soared. I would like to sincerely acknowledge our company’s employees and partners who have to contend with the extremely fraught situation. Considering the current market situation, we can be satisfied with the results for 6 months. The group’s revenue and net profit grew in both the second quarter and first half-year. To some extent, the number of new construction contracts signed this year decreased, but we continued launching new apartment development projects, which do not appear in the portfolio of contracts,” commented the results Andres Trink, Chairman of the Management Board of AS Merko Ehitus.

“The share of the apartment development segment in the group’s revenue decreased in the first half-year due to the timing of completion of the development projects. This year, we delivered to buyers close to 150 apartments and launched the construction of more than 800 new apartments, of which the majority will be completed in 2022. The number of apartments under construction is up significantly and apartment sales are going according to plan – most of the finished apartments have been sold and a large part of the apartments under construction are reserved under preliminary contracts of sale. As a whole, the apartment market in the Baltics has been active this year,” said Trink. The biggest apartment developments are Noblessneri, Uus-Veerenni, Odra, Metsatuka and Lahekalda (Tallinn), Erminurme (Tartu), Viesturdārzs and Mežpilsēta (Riga) and Vilneles Skverai (Vilnius).

In Q2, AS Merko Ehitus Eesti entered into a contract for acquiring a 35% holding in the network construction and maintenance company Connecto Eesti AS, under which Merko Ehitus Eesti’s electrical engineering unit will merge with Connecto Eesti AS. “We see that investments into energy and communication infrastructure are continuing and Connecto has good prospects to be a part of these developments,” added Trink.

In Q2 of 2021, Merko entered into new contracts worth EUR 38 million of which the biggest were a contract for the design and construction of the infrastructure of the Republic of Estonia’s southeast land border sections 4–6 and a contract for the construction of St John’s School in Tallinn. The group’s secured order-book balance grew to EUR 250 million as of the end of Q2.

In the second quarter, the largest objects in Estonia were the third development phase of the Mustamäe medical campus of the North-Estonia Medical Centre, the Tallinn School of Music and Ballet, construction on the Liivalaia business and residential complex and the construction of infrastructure segments of the Republic of Estonia’s southeast land border. In Latvia, the works in progress were the Orkla wafer and biscuit production plant and NATO facilities in Ādaži, and the Kauguri city park and youth house. In Lithuania, infrastructure for a number of wind farms and the Kaunas district police headquarters building, NATO barracks and a production building for Continental Automotive.

AS Merko Ehitus ( group consists of AS Merko Ehitus Eesti in Estonia, SIA Merks in Latvia, UAB Merko Statyba in Lithuania and Peritus Entreprenør AS in Norway. Besides providing construction service as a general contractor, the group’s other major area of activity is apartment development. As at the end of 2020, the group employed 666 people, and the group’s revenue for 2020 was EUR 316 million.