Börsiteade

Pealkiri

2024 3 months consolidated unaudited interim report

Teade

COMMENTARY FROM MANAGEMENT

Merko  Ehitus revenue was EUR  81.2 million in Q1 2024, representing 7.2% growth
compared  to the same period a year ago. Net profit for the quarter was EUR 4.4
million.  Merko delivered 59 apartments  and 7 commercial units  to buyers in 3
months this year.

According  to the  management of  Merko Ehitus,  the apartment market behaved as
expected  in the first quarter and Merko group figures for first sales reflected
that  and there  is no  basis for  expecting results  comparable to 2023 in real
estate  development.  In  the  new  and  different  market  situation, Merko has
successfully  refocused its activities  and been able  to compensate the drop in
volumes  from  residential  development  with  construction service sales. Merko
Ehitus net profit decreased, but the result was better than anticipated based on
the changes in the proportion of our core business.

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 area accounted for 83.7% of the group's revenue. Private sector clients
have  grown somewhat more active on the construction services market, apparently
accustomed  to new building 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.  Merko's  secured  order  book  is  strong  and  in  April, a
noteworthy   energy  infrastructure  contract  in  Latvia  and  a  contract  for
additional work on the NATO training centre in Lithuania were added.

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, 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,
Viesturd?rzs, Mezhpils?ta and Magnolijas in Riga and Vilnel?s Skverai in Vilnius.

In  Q1 of 2024, the largest sites under  construction in Estonia were Hampton by
Hilton  and Hyatt hotel  buildings, Arter Quarter,  the logistics centre for TKM
Group,  barracks  at  the  Defence  Forces'  Ämari  base,  the Rail Baltica road
viaducts  in Harjumaa,  a tram  line between  Old City  Harbour and Rail Baltica
Ülemiste  passenger  terminal,  as  well  the  first phase of Ülemiste terminal.
Projects  in Lithuania were wind farm infrastructure works in Kelme and Pag?giai
regions, and various buildings and infrastructure for NATO training centres.

OVERVIEW OF THE 3 MONTHS RESULTS

PROFITABILITY
2024 3 months'  pre-tax profit  was EUR  5.2 million (3M 2023: EUR 6.1 million),
which brought the pre-tax profit margin to 6.4% (3M 2023: 8.0%).
Net  profit attributable to  shareholders for 3 months  2024 was EUR 4.4 million
(3M   2023: EUR  5.9 million)  and  3 months  net  profit  margin  was  5.5% (3M
2023: 7.8%).

REVENUE
2024 3 months'  revenue  was  EUR  81.2 million  (3M 2023: EUR 75.8 million). 3
months'  revenue increased by 7.2% compared to  same period last year. The share
of revenue earned outside Estonia in 3 months 2024 was 62.3% (3M 2023: 46.7%).

SECURED ORDER BOOK
As  of 31 March 2024, the  group's secured order  book was EUR 419.0 million (31
March   2023: EUR  412.2 million).  In  3 months  2024, group  companies  signed
contracts in the amount of EUR 10.5 million (3M 2023: EUR 170.3 million).

REAL ESTATE DEVELOPMENT
In 3 months 2024, the group sold a total of 59 apartments; in 3 months 2023, the
group  sold 145 apartments. The group earned  a revenue of EUR 10.8 million from
sale  of own  developed apartments  in 3 months  2024 and EUR 19.4 million in 3
months 2023.

CASH POSITION
At  the end of the reporting period, the  group had EUR 88.4 million in cash and
cash  equivalents,  and  equity  of  EUR  216.6 million (50.8% of total assets).
Comparable  figures as  of 31 March  2023 were EUR  14.3 million and  EUR 190.1
million  (50.0% of total assets), respectively. As of 31 March 2024, the group's
net debt was negative EUR 39.6 million (31 March 2023: EUR 72.8 million).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited
in thousand euros

                                                        2024     2023      2023
                                                    3 months 3 months 12 months

 Revenue                                              81,185   75,751   466,304

 Cost of goods sold                                 (72,301) (65,776) (401,267)

 Gross profit                                          8,884    9,975    65,037



 Marketing expenses                                  (1,068)  (1,077)   (4,312)

 General and administrative expenses                 (4,142)  (3,965)  (19,423)

 Other operating income                                1,324      817     4,171

 Other operating expenses                              (953)     (62)     (991)

 Operating profit                                      4,045    5,688    44,482



 Finance income/costs                                  1,157      391     7,500

 incl. finance income/costs from joint ventures        1,568    1,280    10,220

 interest expense                                      (655)    (655)   (2,697)

 foreign exchange gain (loss)                          (190)    (210)     (153)

 other financial income (expenses)                       434     (24)       130

 Profit before tax                                     5,202    6,079    51,982



 Corporate income tax expense                          (818)    (292)   (6,081)



 Net profit for financial year                         4,384    5,787    45,901

 incl. net profit attributable to equity holders of
 the parent                                            4,427    5,880    46,048

 net profit attributable to non-controlling
 interest                                               (43)     (93)     (147)

 Other comprehensive income, which can subsequently
 be classified in the income statement

 Currency translation differences of foreign
 entities                                                106       53      (41)



 Comprehensive income for the period                   4,490    5,840    45,860

 incl. net profit attributable to equity holders of
 the parent                                            4,526    5,910    45,993

 net profit attributable to non-controlling
 interest                                               (36)     (70)     (133)

 Earnings per share for profit attributable to
 equity holders of the parent (basic and diluted,
 in EUR)                                                0.25     0.33      2.60

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
unaudited
in thousand euros

                                               31.03.2024 31.03.2023 31.12.2023

 ASSETS

 Current assets

 Cash and cash equivalents                         88,353     14,295     77,330

 Trade and other receivables                       58,929     54,206     68,754

 Prepaid corporate income tax                           6         89          2

 Inventories                                      196,518    244,549    195,435

                                                  343,806    313,139    341,521

 Non-current assets

 Investments in joint ventures                     23,483     14,175     21,915

 Other shares and securities                           80          -         80

 Other long-term loans and receivables             20,427     22,685     24,490

 Deferred income tax assets                         4,998        873      3,298

 Investment property                               16,740     11,460     16,823

 Property, plant and equipment                     16,093     17,287     16,613

 Intangible assets                                    487        564        520

                                                   82,308     67,044     83,739



 TOTAL ASSETS                                     426,114    380,183    425,260



 LIABILITIES

 Current liabilities

 Borrowings                                        12,909     59,753     19,673

 Payables and prepayments                         134,216     88,907    133,898

 Income tax liability                               6,335      1,290      4,260

 Short-term provisions                             10,551      8,973     10,451

                                                  164,011    158,923    168,282

 Non-current liabilities

 Long-term borrowings                              35,882     27,347     35,142

 Deferred income tax liability                      4,489      2,327      4,441

 Other long-term payables                           5,342      2,054      5,495

                                                   45,713     31,728     45,078



 TOTAL LIABILITIES                                209,724    190,651    213,360



 EQUITY

 Non-controlling interests                          (191)      (565)      (155)

 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                   (739)      (753)      (838)

 Retained earnings                                208,598    182,128    204,171

                                                  216,581    190,097    212,055

 TOTAL EQUITY                                     216,390    189,532    211,900



 TOTAL LIABILITIES AND EQUITY                     426,114    380,183    425,260

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
develop real estate and construct buildings and infrastructure. We create a
better living environment and build the future. We operate in Estonia, Latvia,
Lithuania and Norway. As at the end of 2023, the group employed 635 people, and
the group's revenue for 2023 was EUR 466 million.