Tallinn, Estonia, 2017-11-09 07:00 CET (GLOBE NEWSWIRE) --
COMMENTARY FROM MANAGEMENT
Merko Ehitus’s revenue for both Q3 of 2017 and the first 9 months of the year
grew by close to one-quarter – Q3 revenue was EUR 86 million and 9 month
revenue was EUR 214.8 million. The group’s net profit in Q3 was EUR 3.4 million
and the 9 month figure was EUR 6.6 million.
The growth of group revenue in the first nine months of this year has been
supported by several major construction contracts in progress. Merko Ehitus
currently building large shopping centres in Tallinn and Riga, three hotels in
Vilnius and a number of office buildings in Tallinn. In the opinion of the
group’s management, all of the construction contracts have a tight time
schedule; moreover, the Merko Ehitus must operate in a market situation where a
shortage of resources in the form of design engineers and capable
subcontractors is increasingly problematic. This puts great demands on our
project teams when it comes to organising the work process, finding optimum
solutions and adopting new technologies. According to the group’s management,
company has a considerable portfolio of construction contracts, but it is not
an easy task to realise it in a profitable manner, as company is exposed to
both market risks and contract risks. Group has had very rapid growth in
Latvia, and there it is particularly important to manage the risks. The
developments in terms of volumes of engineering construction have been below
expectations, as group has not been able to land new construction contracts in
the expected volume.
In Q3, Merko Ehitus sold 47 apartments for a total of 286; the 9 month revenue
figures are EUR 6.9 million and EUR 33.8 million, respectively (figures do not
include VAT). In nine months, Merko has launched construction of approximately
500 apartments, having invested EUR 39 million into the development projects
launched this year and projects already under way. According to the group’s
management, the sales of apartments have generally gone according to plan this
year, although considering the favourable market situation, the sales tempo
could be even faster on some projects. In addition, the pace of proceedings on
building permits and planning documents are dissatisfied. In the framework of
group long-term apartment development strategy, Merko Ehitus has acquired a
total of EUR 8.6 million in new registered immovables. In Q3, bought out our
co-investor in the immovable properties located on the Maarjamäe limestone
cliff in the Lasnamäe district of Tallinn, which hold long-term potential for
developing more than 1,000 apartments.
In Q3 of 2017, Merko Ehitus posted revenue of EUR 86.0 million, EBIDTA of 5.0
million, profit before taxes of 3.9 million and net profit of EUR 3.4 million.
The group’s figures for the first nine months of 2017 were revenue of EUR 214.8
million, EBITDA of EUR 11.0 million, profit before taxes of EUR 8.2 million and
net profit of EUR 6.6 million. In the first 9 months of 2017, the group has
entered into new contracts with a total value of EUR 304 million, and EUR 87
million in Q3 alone, including the construction of the Alfa shopping centre
expansion in Riga, renovation of Neringa Hotel in Vilnius, the Embassy of the
People’s Republic of China in Estonia, and the renovation and reconstruction of
the office building of the Norwegian chancellor of justice in Oslo.
As of 30 September 2017, Merko Ehitus had a contract portfolio of EUR 396.4
million compared to EUR 256.4 million in the same period in the previous year.
Among major projects in progress in Q3 in Estonia there were the construction
of T1 Mall of Tallinn shopping centre, Maakri Kvartal, Öpiku Maja’s building B,
Noblessner residential quarter, Pärnu mnt 22 office building, the Tapa military
base barracks, and infrastructure for the airport tram line and the Tallinn
ring road’s Juuliku junction. In Latvia, the biggest projects in progress were
the Akropole and Alfa shopping centres, the Z Towers complex and the Ventspils
music school and concert hall; in Lithuania, the Radisson Blu Hotel Lietuva
expansion, the Philip Morris plant, the Narbuto 5 office building and the
Rinktines Urban development project. In Norway, the biggest projects in
progress in Q3 were the addition to the Blakstad hospital building and the
Akersgata 8 office building.
OVERVIEW OF THE III QUARTER AND 9 MONTHS RESULTS
PROFITABILITY
Q3 2017 net profit was EUR 3.4 million (Q3 2016: EUR 2.9 million) and net
profit margin 3.9% (Q3 2016: 4.3%). Net profit in 9M 2017 was EUR 6.6 million
(9M 2016: EUR 4.7 million), having increased by 39.2% compared to the same
period last year and net profit margin increased to 3.1% (9M 2016: 2.7%).
Profit before tax in 9M 2017 was EUR 8.2 million (9M 2016: EUR 5.7 million),
which is equivalent to a profit before tax margin of 3.8% (9M 2016: 3.3%).
REVENUE
Q3 2017 revenue was EUR 86.0 million (Q3 2016: EUR 67.8 million) and 9M 2017
revenue was EUR 214.8 million (9M 2016: EUR 173.4 million), has increased by
23.9% compared to last year. The share of revenue earned outside Estonia in 9M
2017 was 35.8% (9M 2016: 31%). The number of apartments (286 units) sold in 9
months of 2017 has increased by 6.7% compared to last year (9 months of 2016:
268 units) and the revenue from apartment sales (EUR 33.8 million) has
increased by 13.8% (9 months of 2016: EUR 29.7 million).
CASH POSITION
At the end of the reporting period, the group had EUR 18.6 million in cash and
cash equivalents and equity EUR 122.1 million (46.4% of total assets).
Comparable figures as at 30 September 2016 were accordingly EUR 20.8 million
and EUR 121.4 million (56.5% of total assets). As at 30 September 2017 the
group had net debt of EUR 29.1 million (30 September 2016: EUR 11.1 million).
SECURED ORDER BOOK
As at 30 September 2017, the group’s secured order book had grown to EUR 396.4
million (30 September 2016: EUR 256.4 million). In 9M 2017, group companies
signed new contracts in the amount of EUR 303.6 million (9M 2016: EUR 140.5
million). Q3 2017 new contracts signed in amount of EUR 87.0 million (Q3 2016:
EUR 31.5 million).
9M 9M Variance Q3 Q3 Variance 12M
2017 2016 2017 2016 2016
--------------------------------------------------------------------------------
Revenue millio 214.8 173.4 +23.9% 86.0 67.8 +26.8% 252.0
n EUR
--------------------------------------------------------------------------------
EBITDA millio 11.0 8.4 +30.7% 5.0 3.9 +28.6% 11.2
n EUR
--------------------------------------------------------------------------------
EBITDA margin % 5.1 4.9 5.8 5.7 4.4
--------------------------------------------------------------------------------
EBIT millio 8.8 6.1 +44.9% 4.1 3.0 +36.5% 7.7
n EUR
--------------------------------------------------------------------------------
EBIT margin % 4.1 3.5 4.8 4.4 3.1
--------------------------------------------------------------------------------
Profit before tax millio 8.2 5.7 +43.7% 3.9 3.0 +29.6% 7.3
n EUR
--------------------------------------------------------------------------------
PBT margin % 3.8 3.3 4.5 4.4 2.9
--------------------------------------------------------------------------------
Net profit millio 6.6 4.7 +39.2% 3.4 2.9 +15.9% 6.1
(parent) n EUR
--------------------------------------------------------------------------------
Net profit margin % 3.1 2.7 3.9 4.3 2.4
--------------------------------------------------------------------------------
EPS EUR 0.37 0.27 +39.2% 0.19 0.16 +15.9% 0.35
--------------------------------------------------------------------------------
30.09.2017 30.09.2016 Variance 31.12.2016
--------------------------------------------------------------------------------
ROE (on yearly basis) % 6.5 7.5 5.0
--------------------------------------------------------------------------------
Equity ratio % 46.4 56.5 51.6
--------------------------------------------------------------------------------
Secured order book million EUR 396.4 256.4 +54.6% 269.6
--------------------------------------------------------------------------------
Total assets million EUR 263.1 214.8 +22.5% 237.8
--------------------------------------------------------------------------------
Number of employees people 770 816 -5.6% 797
--------------------------------------------------------------------------------
Business activities
The group business reporting is divided into three business segments: Estonian
construction service, other home markets construction service and real estate
development.
Estonian construction service
The Estonian construction services segment consists of various services in the
field of general construction, civil engineering, electricity, infrastructure
and road construction, as well concrete works and construction services on
project basis in Finland.
In the 9 months of 2017, the revenue of the Estonian construction service
segment was EUR 99.6 million (9 months of 2016: EUR 88.2 million), having
increase by 12.9% from the same period last year. The 9 months revenue includes
revenue from Finnish projects in the amount of EUR 0.02 million (9 months of
2016: EUR 0.5 million). The increase in revenue in the segment is primarily
influenced by the fact that several large-scale general construction projects
launched in 2016 have continued to progress. The Estonian construction service
segment revenues for 9 months 2017 were 46.4% of the group’s revenue, forming
the largest proportion in the group’s revenue.
In this segment, the group earned a operating profit of EUR 4.4 million for 9
months (9 months of 2016: EUR 4.0 million). In 9 months of 2017, the operating
profit margin of the Estonian construction service segment was 4.4%, which
decreased by 0.2 pp compared to the 9 months of 2016 (4.6%). The Estonian
construction services market is characterised by stiff competition. The number
of civil engineering projects remains small, with general construction
witnessing ever-increasing competition. The group is continually enhancing the
efficiency of its internal project management processes, having reduced and
relocated group resources in order to maintain an efficient cost base.
Our major projects in the third quarter in Tallinn included the construction
works of Maakri Kvartal business complex, T1 shopping centre, Öpiku office
building B, Pärnu mnt 22 office building, construction of the airport tram line
infrastructure, extension works of Wendre production building and construction
works for clean up the residual pollution of the Maadevahe and Priimetsa
asphalt concrete plants. Additionally the construction works of Juuliku road
junction and road section at Tallinn roundabout and the road maintenance works
done under the service agreement with Tallinn city had a significant impact.
On 13th June 2017, AS Vooremaa Teed, 100% subsidiary of Tallinna Teed AS part
of Merko Ehitus group, and Eesti Keskkonnateenused AS have entered sales and
purchase agreement to dispose AS Vooremaa Teed’s road maintenance field of
activity. The largest contract under disposal of the field of activity was with
Estonian Road Administration signed in 2015. Under the contract AS Vooremaa
Teed performed the road and maintenance works of main roads in Viljandi county
in total annual value approximately 1.8 million euros and with the term till 31
December 2020. The transaction is approved by Estonian Competition Authority on
21th of June 2017 and completed during 3rd quarter 2017.
Other home markets construction service
The other home markets construction service segment consists of general
construction work in Latvia, Lithuania and Norway and provision of civil
engineering and electricity services in Latvia.
The revenue of the other home markets construction service segment amounted to
EUR 65.5 million in the 9 months of 2017 (9 months of 2016: EUR 40.2 million),
which is 63.1% more than in the 9 months of 2016. If the other home markets
construction service segment revenues of 9 months of 2016 formed 23.2% of the
group’s revenue, then during 9 months of the current year the segments revenues
increased to 30.5%.
Merko’s position among Latvia general contractors is currently strong and we
see opportunities for growing our business volumes. In Lithuania, we are
continuing our strategic plan to focus on external customers who make up the
predominant part of the group’s Lithuanian secured order book. In Lithuania, we
have also entered more widely the public procurement sphere in the field of
general construction. In Norway, group has signed two major construction
contracts this year, in the amount of EUR 4.3 million and EUR 6.4 million, as
well as performing several smaller-scale agreements.
The 9 months operating profit of the other home market construction service
segment amounted to EUR 0.0 million (9 months of 2016: operating loss EUR 0.8
million) and the operating profit margin was 0.0% (9 months of 2016: negative
2.0%). The revenue of other home market construction service segment has
increased by 106.1% in Q3 compared to the same period last year and the
operating profit was EUR 0.7 million (Q3 2016: operating loss EUR 0.4 million).
In the third quarter of 2017, the main ongoing projects included in the other
home markets construction service segment were in Riga the construction works
of Multifunctional Centre Akropole, construction works of warehouse complex at
Katlakalna street 6D and engineering and finishing works of Z-Towers complex.
In Jurmala the construction works of Jasm?nu 10 residential complex and in
Ventspils the construction works of music school and concert hall and design.
In Vilnius the construction works of Narbuto 5 office building, construction
works of Radisson Blu Hotel Lietuva extension and reconstruction and in
Klaipeda the reconstruction and extension construction works of Philip Morris
plant. In Oslo construction works of an extension of a building at Blakstad
Hospital and renovation and re-building project for Akersgata 8 office
building.
Real estate development
The real estate development segment includes residential real estate
development and construction of joint venture projects, long-term real estate
investments and commercial real estate projects in Estonia, Latvia and
Lithuania. In the interests of the finest quality and maximum convenience and
assurance for buyers, Merko handles all phases of development: acquisition of
the real estate, planning, design of the development project, construction,
sales and marketing and warranty-period customer service.
The group sold a total of 286 apartments (incl. 1 apartment in a joint venture)
in 9 months of 2017 at the total value of EUR 33.8 million (excl. VAT)
comparing 2016 9 months sold 268 apartments at total value of EUR 29.7 million.
In 9 months of 2017 real estate development segment revenues have increased by
10.4% compared to the same period last year. In the 9 months of 2017 the share
of revenue from the real estate development segment formed 23.1% of the group’s
total revenue (9 months of 2016: 25.9%).
In Q3 of 2017 a total of 47 apartments were sold at the total value of EUR 6.9
million (excl. VAT), compared to Q3 of 2016 109 apartments were sold at the
total value of EUR 12.3 million.
The 9 months operating profit of the segment amounted to EUR 5.8 million (9
months of 2016: EUR 4.3 million) and the operating profit margin was 11.6% (9
months of 2016: 9.4%), which increased by 2.2 pp compared to the same period
previous year.
At the end of the period, group’s inventory comprised 293 apartments where a
preliminary agreement had been signed: 76 completed apartments (50 in Estonia,
25 in Latvia and 1 in Lithuania) and 217 apartments under construction (137 in
Estonia, 17 in Latvia and 63 in Lithuania). The sale of these apartments had
not yet been finalised and delivered to customers, because the development site
is still under construction or the site was completed at the end of the
reporting period and the sales transactions have not all been finalised yet.
As at 30 September 2017, the group had a total of 450 apartments for active
sale (as at 30 September 2016: 388 apartments), for which there are no pre-sale
agreements and of which 105 have been completed (35 in Estonia, 59 in Latvia
and 11 in Lithuania) and 345 are under construction (209 in Estonia, 79 in
Latvia and 57 in Lithuania).
In 9 months of 2017, the group launched the construction of a total of 496 new
apartments in the Baltic states (9 months of 2016: 284 apartments). In the 9
months of this year, the group has invested a total of EUR 39.2 million (9
months of 2016: EUR 39.1 million) in new development projects launched in 2017
as well as projects already in progress.
One of group’s objectives is to keep a moderate portfolio of land plots to
ensure stable inventory of property development projects considering the market
conditions. At 30 September 2017, the group's inventories included land plots
with the development potential, where the construction works have not started,
of EUR 70.4 million (30.09.2016: EUR 50.5 million).
In the 9 months of 2017, the group has purchased new land plot, at an
acquisition cost of EUR 8.6 million, for real estate development purposes (9
months of 2016: no new land plot acquisitions). In Q1 of 2017, the group
acquired an approximately 1.5-hectare development area in the heart of Riga,
allowing to build nearly 350 apartments in the upcoming years.
In Q3 AS Merko Ehitus purchased immovable properties located on the Maarjamäe
limestone cliff in the Lasnamäe district of Tallinn. Considering the registered
immovables in this area that were already owned by the group, there is now
potential to establish more than 1,000 apartments. The development has a
long-term perspective and will take place in multiple phases.
Post balance sheet date the group has disposed non-strategic land plots in a
sales value of EUR 3 million.
Secured order book
As at 30 September 2017, the group’s secured order book amounted to EUR 396.4
million as compared to EUR 256.4 million as at 30 September 2016, having
increased by approximately 54,6% in the annual comparison. The secured order
book excludes the group's own residential development projects and construction
work related to developing real estate investments.
In 9 months of 2017, EUR 303.6 million worth of new contracts were signed
(without own developments) as compared to EUR 140.5 million in same period last
year. The value of new contracts signed (without own developments) in the third
quarter of 2017 amounted to EUR 87.0 million (Q3 2016: EUR 31.5 million).
Of the contracts signed in the 9 months of 2017, private sector orders
accounted for the majority proportion, which is also represented in the group’s
secured order book as at the end of the reporting period, where private sector
orders from projects in progress constitute approximately 86% (30.09.2016:
approximately 80%).
After the balance sheet date the group concluded two large construction
contract:
-- AS Merko Infra and Riigi Kinnisvara AS entered into a contract for the
construction of Viimsi State Gymnasium. The contract value is EUR 5.1
million and the works are scheduled to be completed in autumn 2018.
-- AS Merko Ehitus Eesti and OÜ Hansa Hotell entered into a contract for the
construction of the first stage of an office building. The contract value
is approximately EUR 4 million and the works are scheduled to be completed
in August 2018.
Traditionally the share of Estonian construction activity has been the highest
in the group's revenues. Given the growth outlook of the Estonian construction
market, the group's goal is to increase the volume of construction orders from
outside Estonia. Thus, we will continue to identify and strengthen the groups
competitive advantages and are monitoring the development and opportunities
both in the Baltic states and Nordic countries.
Cash flows
As at 30 September 2017 the group had cash equivalents in the amount of EUR
18.6 million (30.09.2016: EUR 20.8 million). The group's financial position is
continually strong, the group has not utilised all its credit lines of existing
overdrafts and loan agreements within reporting period. As at end of the
period, the group entities had concluded overdraft contracts with banks in the
total amount of EUR 11.2 million, of which EUR 11.0 was unused (30.09.2016: EUR
11.2 million, all amount was unused). In addition to the overdraft facility,
the company has a current loan facility with the limit of EUR 3.5 million
(30.09.2016: EUR 3.5 million) from AS Riverito, which has not been withdrawn at
the end of current and previous financial periods.
The 9-month cash flow from operating activity was negative at EUR 10.2 million
(9 months of 2016: negative EUR 11.1 million), cash flow from investing
activity was positive at EUR 0.8 million (9 months of 2016: EUR 0.0 million)
and the cash flow from financing activity was negative at EUR 5.5 million (9
months of 2016: negative EUR 8.0 million). The cash flow from operating
activities has had significant impact on investment to immovable properties in
amount EUR 8.6 million.
To support cash flows arising from operating activity, the group has been
cautious in raising additional external capital, including factoring. At the
same time, the debt ratio has remained at a moderate level (17.7% as at
30.09.2017; 14.8% as at 30.09.2016; 19.3% as at 31.12.2016).
Cash flows from investing activities include negative cash flow from the
acquisition of non-current asset in the amount of EUR 1.2 million (9 months of
2016: EUR 1.9 million) and the positive cash flow from the sale of non-current
assets in the amount of EUR 1.9 million (9 months of 2016: EUR 0.6 million).
The acquisitions and disposals of non-current assets was made in the road
construction activity.
The largest single negative item in cash flows from financing was the dividend
payment of EUR 7.3 million (9 months of 2016: EUR 9.0 million). In addition,
bank loans totalling EUR 15.4 million, raised in order to acquire the
registered immovables, had a major influence. At the end of 2016 EUR 12.5
million was engaged as a short-term loan from the parent company AS Riverito to
purchase the Veerenni development area. The loan was refinanced at the
beginning of 2017 with long-term loans from various credit institutions. The
group has partly financed current year immovable properies acquisition by bank
loan.
The Q3 2017 cash flow from operating activity was negative at EUR 10.3 million
(Q3 2016: positive EUR 2.2 million), which was significantly affected by the
acquisition of immovable properties in the Q3. The cash flow from investing
activity was positive at EUR 0.6 million (Q3 2016: negative EUR 0.0 million)
and the cash flow from financing activity was positive at EUR 2.4 million (Q3
2016: negative EUR 3.1 million).
The Q3 cash flows from investing activities include negative cash flow from the
acquisition of non-current asset in the amount of EUR 0.3 million (Q3 2016: EUR
0.3 million) and the positive cash flow from the sale of non-current assets in
the amount of EUR 0.8 million (Q3 2016: EUR 0.2 million).
The quarterly cash flow from financing activities was mainly influenced by the
loans drawn for financing the construction costs of real estate development
projects.
Dividends and dividend policy
The distribution of dividends to the shareholders of the company is recorded as
a liability in the financial statements as of the moment when the payment of
dividends is approved by the company’s shareholders.
According to the current dividends policy the objective is paying the
shareholders 50-70% of the annual profit.
The annual general meeting of shareholders of AS Merko Ehitus held at 28 April
2017 approved the Supervisory Board’s proposal to pay the shareholders the
total amount of EUR 7.3 million (EUR 0.41 per share) as dividends from net
profit brought forward, which is equivalent to a 119% dividend rate and a 4.5%
dividend yield for the year 2016 (using the share price as at 31 December
2016). Comparable figures in 2015 were accordingly: EUR 9.0 million (EUR 0.51
per share) as dividends, which is equivalent to a 90% dividend rate and a 6.0%
dividend yield (using the share price as at 31 December 2015).
According to the Estonian Income Tax Law §50 section 11 AS Merko Ehitus can pay
certain portion of dividends without any additional income tax expense and
liabilities occurring due to previously received and taxed distribution of
profits from subsidiaries. Taking into account the dividends already paid to
the parent company by the subsidiaries during 2017, the group incurred
additional income tax expense in connection with the disbursement of dividends
of EUR 0.9 million (Q2 2016: EUR 0.6 million) in Estonia in the second quarter
of 2017.The dividend payment to the shareholders took a place on 26 May 2017.
Ratios
(attributable to equity holders of the parent)
9M 9M 9M Q3 Q3 Q3 12M
2017 2016 2015 2017 2016 2015 2016
--------------------------------------------------------------------------------
Income statement
summary
--------------------------------------------------------------------------------
Revenue millio 214.8 173.4 184.6 86.0 67.8 68.4 252.0
n EUR
--------------------------------------------------------------------------------
Gross profit millio 16.7 14.0 15.3 6.5 5.5 6.3 19.0
n EUR
--------------------------------------------------------------------------------
Gross profit % 7.8 8.1 8.3 7.6 8.1 9.3 7.5
margin
--------------------------------------------------------------------------------
Operating profit millio 8.8 6.1 7.6 4.1 3.0 3.7 7.7
n EUR
--------------------------------------------------------------------------------
Operating profit % 4.1 3.5 4.1 4.8 4.4 5.4 3.1
margin
--------------------------------------------------------------------------------
Profit before millio 8.2 5.7 7.0 3.9 3.0 3.5 7.3
tax n EUR
--------------------------------------------------------------------------------
PBT margin % 3.8 3.3 3.8 4.5 4.4 5.1 2.9
--------------------------------------------------------------------------------
Net profit millio 6.8 4.7 5.6 3.6 2.9 3.2 6.0
n EUR
--------------------------------------------------------------------------------
attributable to millio 6.6 4.7 5.6 3.4 2.9 3.1 6.1
equity holders n EUR
of the parent
--------------------------------------------------------------------------------
attributable to millio 0.2 (0.0) 0.0 0.2 (0.0) 0.1 (0.1)
non-controlling n EUR
interest
--------------------------------------------------------------------------------
Net profit % 3.1 2.7 3.0 3.9 4.3 4.6 2.4
margin
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Other income
statement
indicators
--------------------------------------------------------------------------------
EBITDA millio 11.0 8.4 9.9 5.0 3.9 4.4 11.2
n EUR
--------------------------------------------------------------------------------
EBITDA margin % 5.1 4.9 5.4 5.8 5.7 6.4 4.4
--------------------------------------------------------------------------------
General expense % 4.8 5.5 4.8 4.2 4.4 4.4 5.3
ratio
--------------------------------------------------------------------------------
Labour cost % 10.9 12.7 12.1 9.7 10.8 12.4 11.7
ratio
--------------------------------------------------------------------------------
Revenue per thousa 284 220 239 114 86 89 325
employee nd EUR
--------------------------------------------------------------------------------
Other significant 30.09.2017 30.09.2016 30.09.2015 31.12.2016
indicators
--------------------------------------------------------------------------------
Return on equity % 6.5 7.5 8.3 5.0
--------------------------------------------------------------------------------
Return on assets % 3.3 4.3 4.4 2.8
--------------------------------------------------------------------------------
Return on invested % 6.3 7.2 8.3 5.1
capital
--------------------------------------------------------------------------------
Equity ratio % 46.4 56.5 53.4 51.6
--------------------------------------------------------------------------------
Debt ratio % 17.7 14.8 13.2 19.3
--------------------------------------------------------------------------------
Current ratio times 2.8 3.1 2.4 2.9
--------------------------------------------------------------------------------
Quick ratio times 1.1 1.1 0.9 1.1
--------------------------------------------------------------------------------
Accounts receivable days 42 33 43 37
turnover
--------------------------------------------------------------------------------
Accounts payable days 39 36 40 38
turnover
--------------------------------------------------------------------------------
Average number of people 757 787 771 776
employees
--------------------------------------------------------------------------------
Secured order book million 396.4 256.4 193.6 269.6
EUR
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited
in thousand euros
2017 2016 2017 2016 2016
9 months 9 months III III 12 months
quarter quarter
--------------------------------------------------------------------------------
Revenue 214,807 173,377 86,000 67,814 251,970
--------------------------------------------------------------------------------
Cost of goods sold (198,109) (159,406) (79,482) (62,340) (232,961)
--------------------------------------------------------------------------------
Gross profit 16,698 13,971 6,518 5,474 19,009
--------------------------------------------------------------------------------
Marketing expenses (2,420) (2,377) (782) (708) (3,281)
--------------------------------------------------------------------------------
General and administrative (7,789) (7,116) (2,871) (2,248) (10,076)
expenses
--------------------------------------------------------------------------------
Other operating income 2,645 1,798 1,419 554 2,466
--------------------------------------------------------------------------------
Other operating expenses (324) (198) (191) (74) (399)
--------------------------------------------------------------------------------
Operating profit 8,810 6,078 4,093 2,998 7,719
--------------------------------------------------------------------------------
Finance income/costs (594) (361) (232) (20) (440)
--------------------------------------------------------------------------------
incl. finance income/costs (12) 66 (10) 112 163
from joint ventures
--------------------------------------------------------------------------------
finance income/costs from - 1 - - 2
other long-term
investments
--------------------------------------------------------------------------------
interest expense (553) (438) (206) (139) (610)
--------------------------------------------------------------------------------
foreign exchange gain (2) (7) (1) - (6)
(loss)
--------------------------------------------------------------------------------
other financial income (27) 17 (15) 7 11
(expenses)
--------------------------------------------------------------------------------
Profit before tax 8,216 5,717 3,861 2,978 7,279
--------------------------------------------------------------------------------
Corporate income tax (1,395) (1,034) (282) (92) (1,275)
expense
--------------------------------------------------------------------------------
Net profit for financial 6,821 4,683 3,579 2,886 6,004
year
--------------------------------------------------------------------------------
incl. net profit 6,561 4,714 3,350 2,891 6,122
attributable to equity
holders of the parent
--------------------------------------------------------------------------------
net profit attributable to 260 (31) 229 (5) (118)
non-controlling interest
--------------------------------------------------------------------------------
Other comprehensive income,
which can subsequently be
classified in the income
statement
--------------------------------------------------------------------------------
Currency translation (27) 30 3 22 19
differences of foreign
entities
--------------------------------------------------------------------------------
Comprehensive income for 6,794 4,713 3,582 2,908 6,023
the period
--------------------------------------------------------------------------------
incl. net profit 6,538 4,741 3,356 2,911 6,140
attributable to equity
holders of the parent
--------------------------------------------------------------------------------
net profit attributable to 256 (28) 226 (3) (117)
non-controlling interest
--------------------------------------------------------------------------------
Earnings per share for 0.37 0.27 0.19 0.16 0.35
profit attributable to
equity holders of the
parent (basic and diluted,
in EUR)
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
unaudited
in thousand euros
30.09.2017 30.09.2016 31.12.2016
--------------------------------------------------------------------------------
ASSETS
--------------------------------------------------------------------------------
Current assets
--------------------------------------------------------------------------------
Cash and cash equivalents 18,590 20,782 33,544
--------------------------------------------------------------------------------
Short-term deposits - 1 -
--------------------------------------------------------------------------------
Trade and other receivables 80,289 42,337 45,566
--------------------------------------------------------------------------------
Prepaid corporate income tax 716 467 617
--------------------------------------------------------------------------------
Inventories 130,991 114,528 123,364
--------------------------------------------------------------------------------
230,586 178,115 203,091
--------------------------------------------------------------------------------
Non-current assets
--------------------------------------------------------------------------------
Long-term financial assets 16,758 17,132 15,805
--------------------------------------------------------------------------------
Deferred income tax assets 1,325 1,423 1,325
--------------------------------------------------------------------------------
Investment property 3,915 4,173 4,108
--------------------------------------------------------------------------------
Property, plant and equipment 10,043 12,939 12,838
--------------------------------------------------------------------------------
Intangible assets 468 970 673
--------------------------------------------------------------------------------
32,509 36,637 34,749
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL ASSETS 263,095 214,752 237,840
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
LIABILITIES
--------------------------------------------------------------------------------
Current liabilities
--------------------------------------------------------------------------------
Borrowings 4,911 2,697 21,485
--------------------------------------------------------------------------------
Payables and prepayments 82,380 50,927 56,259
--------------------------------------------------------------------------------
Income tax liability 404 392 278
--------------------------------------------------------------------------------
Short-term provisions 3,471 4,019 5,637
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91,166 58,035 83,659
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Non-current liabilities
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Long-term borrowings 42,777 29,164 24,516
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Deferred income tax liability 1,201 1,075 1,122
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Other long-term payables 1,932 1,375 2,061
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45,910 31,614 27,699
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TOTAL LIABILITIES 137,076 89,649 111,358
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EQUITY
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Non-controlling interests 3,948 3,712 3,692
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Equity attributable to equity holders of the
parent
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Share capital 7,929 7,929 7,929
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Statutory reserve capital 793 793 793
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Currency translation differences (668) (636) (645)
--------------------------------------------------------------------------------
Retained earnings 114,017 113,305 114,713
--------------------------------------------------------------------------------
122,071 121,391 122,790
--------------------------------------------------------------------------------
TOTAL EQUITY 126,019 125,103 126,482
--------------------------------------------------------------------------------
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TOTAL LIABILITIES AND EQUITY 263,095 214,752 237,840
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Interim report and the investor presentation are attached to the announcement
and are also published on NASDAQ Tallinn and Merko’s web page (group.merko.ee).
Signe Kukin
Group CFO
AS Merko Ehitus
+372 650 1250
signe.kukin@merko.ee
AS Merko Ehitus (group.merko.ee) group consists of Estonia’s leading
construction company AS Merko Ehitus Eesti, the Latvian-market-oriented SIA
Merks, UAB Merko Statyba that is operating on the Lithuanian market, Peritus
Entreprenør AS construction company in Norway and the real estate development
business unit along with real estate holding companies. As at the end of 2016,
the group employed 797 people and the company’s 2016 revenue was EUR 252
million. |