Market announcement

Title

Audited annual report 2024

Message

STATEMENT OF THE CHAIRMAN OF THE MANAGEMENT BOARD

Dear shareholders and readers,

2024, a year of record turnover and profit for Merko, is now in the books. This report gives an overview of the figures as well as the activities during these successful 12 months. The solid results are not just the product of chance. Now on the cusp of its 35th anniversary, Merko has been successful for years on the strength of its masterful workforce and has grown to be a clearly international company. In 2024, we did exit the Norwegian market, but we continue operations in Estonia, Latvia and Lithuania.
           
2024 brought a clear indication that despite their geographic proximity to each other, sentiment and market behaviour on our home markets can be diametrically opposite. The opportunities and risks are also very different in every company we operate in. It is a pleasure to note that we have so far been able to find a balance between risks and opportunities thanks to our local strong and professional teams, who have made the right choices and decisions and perform high-quality work. Our Estonian, Latvian and Lithuanian companies see clear value in being part of a larger Merko family – be it dispensing good advice, sharing experience, learning from others’ mistakes, financial support, providing references or servicing clients operating across borders.

Merko is as strong as its teams. And our teams are strong. Many thanks, dear people of Merko, for an excellent 2024. A deep bow of gratitude to our construction service customers and home buyers who put value on our quality. And thank you to investors who believe in Merko.

Besides our results, various awards and honours attest to our achievements in 2024 – some were bestowed on the company as a whole, some for projects we established and developed, and others were awarded to our colleagues in Estonia, Latvia and Lithuania. We continue to consider it important to give back to society. All this, too, is covered in the report. Merko is one of the few Estonian companies whose 2024 report includes, for the first time, an ESG report. That makes the annual report a far thicker volume when printed out, so we urge you to read it in electronic form to avoid using natural resources.

2025 has started with noteworthy tumult on the political scene and markets around the world. Depending on the developments and new equilibrium, nothing can be ruled out on the construction and real estate markets – we may see sporadic sluggishness continue, or we could witness a recovery of volumes and a shift in focus.

These are turbulent times, and predicting future scenarios is a thankless endeavour. One thing is certain – Merko is poised to thrive in 2025 and beyond, thanks to its adaptability, strong team and trustworthy balance sheet.
  

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
in thousand euros

 	2024	2023
Revenue	539,049	466,304
Cost of goods sold	(443,162)	(401,267)
Gross profit	95,887	65,037
 	 	 
Marketing expenses	(5,030)	(4,312)
General and administrative expenses	(21,908)	(19,423)
Other operating income	5,724	4,171
Other operating expenses	(2,190)	(991)
Operating profit	72,483	44,482
 	 	 
Finance income	2,017	297
Finance costs	(2,950)	(3,017)
Loss from investments in subsidiaries	(5,087)	-
Profit from joint ventures	9,951	10,220
Profit before tax	76,414	51,982
 	 	 
Corporate income tax expense	(11,820)	(6,081)
 	 	 
Net profit for financial year	64,594	45,901
incl.    net profit attributable to equity holders of the parent	64,668	46,048
net profit attributable to non-controlling interest	(74)	(147)
 	 	 
Other comprehensive income (loss), which can subsequently be classified in the income statement	 	 
Currency translation differences of foreign entities	105	(41)
 	 	 
Comprehensive income for the period	64,699	45,860
incl.    attributable to equity holders of the parent	64,764	45,993
attributable to non-controlling interest	(65)	(133)
Earnings per share for profit attributable to equity holders of the parent (basic and diluted, in EUR)	3.65	2.60
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
in thousand euros

 	31.12.2024	31.12.2023
ASSETS	 	 
Current assets	 	 
Cash and cash equivalents	91,879	77,330
Short-term deposits	10,000	-
Trade and other receivables	51,419	68,754
Prepaid corporate income tax	270	2
Inventories	196,521	195,435
 	350,089	341,521
Non-current assets	 	 
Investments in joint ventures	21,571	21,915
Other shares and securities	80	80
Other long-term loans and receivables	40,196	24,490
Deferred income tax assets	5,056	3,298
Investment property	12,606	16,823
Property, plant and equipment	17,147	16,613
Intangible assets	350	520
 	97,006	83,739
 	 	 
TOTAL ASSETS	447,095	425,260
 	 	 
LIABILITIES	 	 
Current liabilities	 	 
Borrowings	21,303	19,673
Payables and prepayments	129,786	133,898
Income tax liability	7,101	4,260
Short-term provisions	7,678	10,451
 	165,868	168,282
Non-current liabilities	 	 
Long-term borrowings	12,102	35,142
Deferred income tax liability	6,148	4,441
Other long-term payables	8,719	5,495
 	26,969	45,078
 	 	 
TOTAL LIABILITIES	192,837	213,360
 	 	 
EQUITY	 	 
Non-controlling interests	-	(155)
Equity attributable to equity holders of the parent	 	 
Share capital	7,929	7,929
Statutory reserve capital	793	793
Currency translation differences	(41)	(838)
Retained earnings	245,577	204,171
 	254,258	212,055
TOTAL EQUITY	254,258	211,900
 	 	 
TOTAL LIABILITIES AND EQUITY	447,095	425,260
A copy of AS Merko Ehitus audited annual report for 2024 is attached to the announcement and is also published on NASDAQ Tallinn and Merko’s web page (group.merko.ee). The ESEF-compliant machine-readable annual report is generated only in Estonian language.

Ivo Volkov
Chairman of Management Board
AS Merko Ehitus
+372 650 1250
[email protected]

Urmas Somelar
Head of Finance
AS Merko Ehitus
+372 650 1250
[email protected]

AS Merko Ehitus (group.merko.ee) 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.