Börsiteade

Pealkiri

2025 II quarter and 6 months consolidated interim report (unaudited)

Teade

The  Estonian  economy  continues  to  grow  slowly,  with  the latest forecasts
estimating  annual economic growth  at 1.2%. The construction  market is showing
signs of stabilisation. Within the buildings segment, there are indications of a
slight  increase in  orders from  the private  sector. Public sector volumes are
being  supported by  orders from  local governments  and the Estonian Centre for
Defence  Investment. The infrastructure  segment is also  being supported by the
volume  of Rail  Baltica works  this year,  whereas investments by the Transport
Administration have not recovered.
During  the period, revenues  generated by both  group's main operating segments
decreased  compared  to  the  first  six  months  of 2024. The Buildings segment
accounted  for  89% of  the  group's  total  revenue,  while  the Infrastructure
segment's  contribution decreased slightly  (H1 2025: 11%; H1 2024: 13%). In the
first half of the year, the group secured a significant number of new contracts,
the impact of which will be reflected in revenue over a longer period.
The  group's gross margin was 5.9% and operating margin was 2.3%. Net profit for
the  period was primarily  affected by the  foreign exchange loss resulting from
the weakening of the Ukrainian hryvnia against the euro.
Compared to 30 June 2024, the group's order book grew by 70%. The order books of
both  the  Buildings  and  the  Infrastructure segments increased. A significant
portion of the order book comprises work scheduled for 2026 and 2027.

Condensed consolidated interim statement of financial position

 EUR'000                                            30 June 2025 31 December 2024
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               9,326            8,195

 Trade and other receivables                            38,683           29,449

 Prepayments                                             2,701            3,543

 Inventories                                            24,068           28,091

 Total current assets                                   74,778           69,278

 Non-current assets

 Other investments                                          77               77

 Trade and other receivables                            10,809           10,681

 Investment property                                     5,517            5,517

 Property, plant and equipment                          13,102           13,247

 Intangible assets                                      14,927           14,951

 Total non-current assets                               44,432           44,473

 TOTAL ASSETS                                          119,210          113,751



 LIABILITIES

 Current liabilities

 Borrowings                                             12,432           12,626

 Trade payables                                         45,621           36,819

 Other payables                                         10,087           10,260

 Deferred income                                        12,665           12,472

 Provisions                                              1,039            1,333

 Total current liabilities                              81,844           73,510

 Non-current liabilities

 Borrowings                                              3,811            5,720

 Trade payables                                          3,023            5,091

 Provisions                                              2,984            2,826

 Total non-current liabilities                           9,818           13,637

 TOTAL LIABILITIES                                      91,662           87,147



 EQUITY

 Share capital                                          14,379           14,379

 Own (treasury) shares                                   (660)            (660)

 Share premium                                             635              635

 Statutory capital reserve                               2,554            2,554

 Translation reserve                                     4,507            4,034

 Retained earnings                                       4,612            4,746

 Total equity attributable to owners of the
 parent                                                 26,027           25,688

 Non-controlling interests                               1,521              916

 TOTAL EQUITY                                           27,548           26,604

 TOTAL LIABILITIES AND EQUITY                          119,210          113,751

Condensed consolidated interim statement of comprehensive income

 EUR'000                            H1 2025  Q2 2025   H1 2024  Q2 2024      2024
-------------------------------------------------------------------------------
 Revenue                           92,638   53,283   114,945   68,700   223,925

 Cost of sales                   (87,188) (49,635) (107,751) (63,644) (207,155)

 Gross profit                       5,450    3,648     7,194    5,056    16,770



 Marketing and distribution
 expenses                           (169)     (86)     (172)    (104)     (422)

 Administrative expenses          (3,072)  (1,526)   (3,373)  (1,809)   (7,878)

 Other operating income                68       16        77       51       286

 Other operating expenses           (160)    (126)     (458)    (312)     (695)

 Operating profit                   2,117    1,926     3,268    2,882     8,061



 Finance income                       258      113       317      180       678

 Finance costs                    (1,904)  (1,165)   (1,546)    (841)   (3,011)

 Net finance costs                (1,646)  (1,052)   (1,229)    (661)   (2,333)



 Profit before tax                    471      874     2,039    2,221     5,728

 Income tax expense                     0        0     (237)    (237)     (563)

 Profit for the period                471      874     1,802    1,984     5,165



 Other comprehensive income
 Items that may be reclassified
 subsequently to
 profit or loss

 Exchange differences on
 translating foreign operations       473      569       165      114       248

 Total other comprehensive
 income                               473      569       165      114       248

 TOTAL COMPREHENSIVE INCOME           944    1,443     1,967    2,098     5,413



 Profit (loss) attributable to:

 - Owners of the parent             (134)      482     1,020    1,613     3,827

 - Non-controlling interests          605      392       782      371     1,338

 Profit for the period                471      874     1,802    1,984     5,165



 Comprehensive income
 attributable to:

 - Owners of the parent               339    1,051     1,185    1,727     4,075

 - Non-controlling interests          605      392       782      371     1,338

 Comprehensive income for the
 period                               944    1,443     1,967    2,098     5,413



 Earnings per share attributable
 to owners of the parent:

 Basic earnings per share (EUR)      (0.00)     0.02      0.03     0.05      0.12

 Diluted earnings per share (EUR)    (0.00)     0.02      0.03     0.05      0.12



Condensed consolidated interim statement of cash flows

  EUR'000                                                    H1 2025     H1 2024
-------------------------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers                             104,987     121,573

  Cash paid to suppliers                                  (88,153)   (100,334)

  VAT paid                                                 (3,252)     (4,746)

  Cash paid to and for employees                          (10,282)    (10,142)

  Income tax paid                                            (350)       (237)

  Net cash from operating activities                         2,950       6,114



  Cash flows from investing activities

  Paid for acquisition of property, plant and equipment      (198)       (257)

  Proceeds from sale of property, plant and equipment          394          78

  Loans provided                                              (41)        (18)

  Repayments of loans provided                                   4           1

  Dividends received                                             0           6

  Interest received                                             61         138

  Investments in long-term deposits                          (300)       (250)

  Net cash used in investing activities                       (80)       (302)



  Cash flows from financing activities

  Proceeds from loans received                                 783         468

  Repayments of loans received                               (640)     (3,392)

  Payments of lease principal                              (1,247)     (1,091)

  Payments of lease interest                                 (134)       (177)

  Interest paid                                              (398)       (368)

  Dividends paid                                                 0       (661)

  Other payments                                                 0          50

  Net cash used in financing activities                    (1,636)     (5,171)



  Net cash flow                                              1,234         641



  Cash and cash equivalents at beginning of period           8,195      11,892

  Effect of movements in foreign exchange rates              (103)        (20)

  Change in cash and cash equivalents                        1,234         641

  Cash and cash equivalents at end of period                 9,326      12,513


Financial review

Financial performance

In  the first half of 2025, Nordecon delivered a gross profit of EUR5,450 thousand
(H1  2024: EUR7,194 thousand). The group's gross margin decreased slightly year on
year,  dropping to 5.9% for the first half of the year (H1 2024: 6.3%) and 6.8%
for the second quarter (Q2 2024: 7.4%).
The  Buildings segment  earned a  profit in  both the  first half and the second
quarter of the year, the respective gross margins being 7.4% and 7.2% (H1 and Q2
2024: 7.7%). The  Infrastructure segment ended the first half of the year with a
gross  loss of EUR49  thousand and a  gross margin of  (0.5)% (H1 2024: 0.9%), but
earned  a gross  profit of  EUR631 thousand  in the  second quarter,  with a gross
margin of 8.2% (Q2 2024: 8.5%).
The  group's administrative expenses for the  first half of 2025 totalled EUR3,072
thousand,  which  is  around  9% lower  than  a  year  earlier  (H1 2024: EUR3,373
thousand).  This  was  mainly  due  to  a  decline  in staff costs. The ratio of
administrative  expenses to revenue (12 months  rolling) increased year on year,
rising to 3.8% (H1 2024: 3.2%) due to lower revenue.
The  group's operating profit for the first half of 2025 was EUR2,117 thousand (H1
2024: 3,268 thousand) and EBITDA was EUR3,435 thousand (H1 2024: EUR4,690 thousand).
The  group's finance income and costs are affected by exchange rate fluctuations
in  the group's foreign markets. In the first half of 2025, the exchange rate of
the  Ukrainian  hryvnia  weakened  against  the  euro  by  around 10%, while the
exchange  rate  of  the  Swedish  krona  strengthened against the euro by around
2.8%. As  a  result,  the  translation  of  the  loans  provided  to the group's
Ukrainian  and Swedish subsidiaries in euros into the local currencies gave rise
to  an exchange loss of  EUR652 thousand (H1 2024: EUR163  thousand) and an exchange
gain of EUR11 thousand (H1 2024: no exchange gain or loss), respectively.
The  group ended the period with a  net profit of EUR471 thousand (H1 2024: EUR1,802
thousand).  The loss attributable to owners of the parent, Nordecon AS, was EUR134
thousand (H1 2024: a profit of EUR1,020 thousand).

Cash flows

The  group's operating activities produced a  net cash inflow of EUR2,950 thousand
in  the first half  of 2025 (H1 2024: an  inflow of EUR6,114  thousand). The items
with  the strongest impact  on operating cash  flow were receipts from customers
and cash paid to suppliers, which decreased due to the decline in revenue.
Investing activities resulted in a net cash outflow of EUR80 thousand (H1 2024: an
outflow  of  EUR302  thousand).  Payments  made  to  acquire  property,  plant and
equipment  totalled EUR198 thousand (H1 2024: EUR257 thousand) and proceeds from the
sale  of property, plant  and equipment amounted  to EUR394 thousand (H1 2024: EUR78
thousand).  Loans  provided  amounted  to  EUR41 thousand (H1 2024: EUR18 thousand),
interest  received to EUR61  thousand (H1 2024: EUR138  thousand) and investments in
long-term deposits to EUR300 thousand (H1 2024: EUR250 thousand).
Financing  activities generated a net cash outflow of EUR1,636 thousand (H1 2024:
an  outflow of EUR5,171  thousand). Proceeds from  loans received amounted to EUR783
thousand,  consisting  mainly  of  the  use  of development loans (H1 2024: EUR468
thousand).  Repayments of loans received totalled EUR640 thousand (H1 2024: EUR3,392
thousand). Lease payments amounted to EUR1,247 thousand (H1 2024: EUR1,091 thousand)
and  interest payments to EUR398 thousand  (H1 2024: EUR368 thousand). There were no
dividend  payments in the reporting period,  whereas dividends paid in the first
half of 2024 amounted to EUR661 thousand.

At  30 June  2025, the  group's  cash  and  cash  equivalents amounted to EUR9,326
thousand (30 June 2024: EUR12,513 thousand).

Key financial figures and ratios

 Figure/ratio                     H1 2025      H1 2024      H1 2023        2024
-------------------------------------------------------------------------------
 Revenue (EUR'000)                   92,638      114,945       86,526     223,925

 Revenue change                     (19)%          33%        (15)%       20.1%

 Net profit (loss) (EUR'000)            471        1,802      (2,299)       5,165

 Net      profit      (loss)
 attributable  to  owners of
 the parent (EUR'000)                 (134)        1,020      (2,493)       3,827

 Weighted  average number of
 shares                        31,528,585   31,528,585   31,528,585  31,528,585

 Earnings per share (EUR)              0.00         0.03       (0.08)        0.12

 Administrative  expenses to
 revenue                             3.3%         2.9%         3.4%        3.5%

 Administrative  expenses to
 revenue (rolling)                   3.8%         3.2%         3.0%        3.5%

 EBITDA (EUR'000)                     3,435        4,690        1,149      11,025

 EBITDA margin                       3.7%         4.1%         1.3%        4.9%

 Gross margin                        5.9%         6.3%         3.2%        7.5%

 Operating margin                    2.3%         2.8%       (0.5)%        3.6%

 Operating  margin excluding
 gain on asset sales                 2.2%         2.8%       (0.7)%        3.5%

 Net margin                          0.5%         1.6%       (2.7)%        2.3%

 Return on invested capital          2.0%         6.2%       (1.0)%       15.6%

 Return on equity                    1.7%         7.8%       (6.1)%       21.0%

 Equity ratio                       23.1%        19.2%        17.1%       23.4%

 Return on assets                    0.4%         1.5%       (1.1)%        4.4%

 Gearing                            15.8%         6.9%        30.0%       22.6%

 Current ratio                       0.91         0.88         0.89        0.94

                             30 June 2025 30 June 2024 30 June 2023 31 Dec 2024
-------------------------------------------------------------------------------
 Order book (EUR'000)               303,914      178,799      155,133     209,489


Performance by geographical market

In  the  first  half  of  2025, revenue  generated outside Estonia accounted for
approximately  2% of the  group's total  revenue, consisting  solely of revenues
generated in Ukraine. We continue to provide services in Ukraine under contracts
signed  in 2023 for  the reconstruction  of substations  and the installation of
associated  physical  protection  systems  in  the  Poltava, Zhytomyr, Volyn and
Ivano-Frankivsk  oblasts. Work in  these areas is  taking longer than originally
planned  and depends on the needs of the national grid. We are also converting a
building  in  Ovruch,  in  the  Zhytomyr  oblast,  into an apartment complex for
internally  displaced persons and  restoring the administrative  building of the
Kyiv  TV  Tower.  No  revenue  was  generated  in Sweden during the period under
review,  as Nordecon  had no  construction contracts  in progress in the Swedish
market.

            H1 2025   H1 2024   H1 2023   2024
-----------------------------------------------
  Estonia       98%       98%       98%    98%

  Ukraine        2%        2%        1%     2%

  Finland         -         -        1%      -


Performance by business line

Segment revenues

The  group's goals include maintaining a balance between the revenues of our two
main  operating segments (Buildings and Infrastructure), where market conditions
permit.  This helps  us to  diversify risk  and provides better opportunities to
continue  construction activities  in challenging  market conditions  where, for
example,  volumes in  one subsegment  decline sharply  while volumes  in another
start to grow more rapidly.

The   group's   revenue  for  the  first  half  of  2025 was  EUR92,638  thousand,
approximately 19% lower than in the first half of 2024, when revenue amounted to
EUR114,945  thousand. The Buildings segment  generated revenue of EUR82,127 thousand
and  the Infrastructure segment  revenue of EUR10,501  thousand. The corresponding
figures  for the first half of 2024 were EUR100,421 thousand and EUR14,486 thousand.
Revenues  from both segments decreased: by  18% for the Buildings segment and by
28% for  the Infrastructure segment. The changes, as well as the distribution of
revenue between segments, were expected.

  Revenue by operating segment   H1 2025   H1 2024   H1 2023   2024
--------------------------------------------------------------------
  Buildings                          89%       87%       77%    84%

  Infrastructure                     11%       13%       23%    16%


Subsegment revenues

In  the  first  half  of  2025, most  of  the revenue generated by the Buildings
segment  came  from  the  public  and  commercial  buildings  subsegments,  with
commercial  buildings  contributing  at  their  highest  level  in recent years.
Revenue  from commercial buildings  increased by around  35% year on year, while
revenue  from  public  buildings  decreased  by  around  47%. Revenue  from  the
apartment buildings subsegment, which resulted from our own property development
operations, also declined.
The  largest projects  in the  public buildings  subsegment were  the design and
construction  of a new  study and sports  building for the  Saku Upper Secondary
School  near Tallinn, the  design and construction  of a study  building for the
Estonian  Centre for  Defence Investment  on the  Raadi campus  in Tartu and the
construction of Loodusmaja (Nature Hub) in Tallinn.
The   largest   projects   in  the  commercial  buildings  subsegment  were  the
construction  of the LEED Gold compliant Golden Gate office building at Ahtri 6
in  Tallinn,  a  commercial  building  at  Väike-Turu  7 in Tartu, the LEED Gold
compliant  Uusküla spa hotel on  the northern shore of  Lake Peipus in Alutaguse
rural municipality and Lidl stores in Võru and Viljandi.
Half-year  revenue  from  our  own  property  development  operations,  which is
reported  in the apartment buildings subsegment, remained comparable to the same
period  last year, amounting to EUR6,781  thousand (H1 2024: EUR6,174 thousand). The
figure  includes revenue from the  sale of apartments in  phase 1 of the Seileri
Kvartal  housing estate  in Pärnu  (https://seileri.ee) and  the Tammepärja Kodu
housing  estate  in  the  Tammelinn  district  in  Tartu (https://tammelinn.ee).
Preparations  for  and  construction  of  the  next  phases are underway in both
developments.  In  carrying  out  our  own  development activities, we carefully
monitor potential risks in the housing development market.

  Buildings segment                     H1 2025   H1 2024   H1 2023   2024
---------------------------------------------------------------------------
  Public buildings                          46%       68%       33%    70%

  Commercial buildings                      41%       20%       25%    21%

  Apartment buildings                       12%        9%       31%     6%

  Industrial and warehouse facilities        1%        3%       11%     3%


The  largest revenue contributor in the Infrastructure segment is still the road
construction  and maintenance subsegment, whose revenue decreased by around 30%
compared to the same period last year. A major share of the subsegment's revenue
came  from the construction of  the Hagudi-Alu section of  stage III of the Rail
Baltica  Rapla County main line railway infrastructure and the provision of road
maintenance  services in  Järva County.  Most of  the other  engineering revenue
resulted  from  the  construction  of  a  platform  area for Class E aircraft at
Tallinn Airport.

  Infrastructure segment              H1 2025   H1 2024   H1 2023   2024
-------------------------------------------------------------------------
  Road construction and maintenance       70%       93%       65%    90%

  Other engineering                       30%        7%       20%    10%

  Environmental engineering                0%        0%       15%     0%


Order book

The group's order book (backlog of contracts signed but not yet performed) stood
at EUR303,914 thousand at 30 June 2025. Compared to the same period last year, the
order  book has increased by  70%. In the first half  of the year, we signed new
contracts  for EUR172,236 thousand  (H1 2024: EUR64,030 thousand),  of which EUR60,960
thousand in the second quarter (Q2 2024: EUR46,413 thousand).

                    30 June 2025 30 June 2024 30 June 2023 31 Dec 2024
----------------------------------------------------------------------
 Order book (EUR'000)      303,914      178,799      155,133     209,489

At  30 June 2025, the Buildings segment accounted for 70% and the Infrastructure
segment  for 30% of  the group's  total order  book (30 June 2024: 90% and 10%,
respectively). Compared to 30 June 2024, the order book of the Buildings segment
has  grown by  31%, driven by  increases in  the order  books of  the public and
commercial  buildings subsegments. The order  book of the Infrastructure segment
has also increased significantly, driven by the Rail Baltica contracts. The Rail
Baltica  projects  support  the  order  book  of the Infrastructure segment in a
situation  where investment by the Transport Administration is declining year by
year. The volume of public investment in the order book of the Buildings segment
has  also decreased. There is some activity at the local government level and in
the national defence sector. The private sector is showing signs of recovery.
Major contracts secured in the first half of 2025 include:

  * Construction of a spa hotel and a swimming complex in Viljandi with an
    approximate cost of EUR30,000 thousand.
  * Construction of the Punamütsike Kindergarten in Võru with an approximate
    cost of EUR6,370 thousand.
  * Construction of the Selja-Tootsi section of stage I of the Rail Baltica
    Pärnu County main line railway infrastructure with an approximate cost of
    EUR62,300 thousand.
  * Design and construction of a barracks at the Tapa Army Base for the Estonian
    Centre for Defence Investment with an approximate cost of EUR5,300 thousand.
  * Design and construction of a building for the Estonian Centre for Defence
    Investment in Harju County with an approximate cost of EUR3,700 thousand.
  * Construction of the Tiskre School in Harku rural municipality with an
    approximate cost of EUR14,500 thousand.
  * Design and construction of a technological warehouse for Cristella in Võru
    with an approximate cost of EUR4,000 thousand.
  * Design and construction of buildings for the Estonian Centre for Defence
    Investment with an approximate cost of EUR34,300 thousand.

Based on the size of the order book and its distribution over the years, as well
as  the general outlook for the economy and the construction market, the group's
management  expects business volumes in 2025 to remain broadly at the same level
as  in  2024. In  a  highly  competitive  environment,  we  have  avoided taking
unjustified risks that could materialise during the contract execution phase and
adversely affect the group's results. The main focus is on managing fixed costs,
increasing  productivity and  effectively executing  pre-construction and design
activities to leverage our professional competitive advantages.

People

Employees and staff costs

The average number of the group's employees (at the parent and the subsidiaries)
in  the  first  half  of  2025 was  418, including  267 engineers  and technical
professionals  (ETP).  Compared  to  the  same  period  last year, the number of
employees decreased by around 3%.

Average  number  of  employees  at  group  companies (the parent company and the
subsidiaries):

                  H1 2025   H1 2024   H1 2023   2024
-----------------------------------------------------
  ETP                 267       282       384    283

  Workers             151       148       188    152

  Total average       418       430       572    435


The  group's staff costs for  the first half of  2025, including all taxes, were
EUR9,221  thousand compared with EUR10,127 thousand in the first half of 2024. Staff
costs declined by around 9%.
In  the first half  of 2025, the service  fees of the  members of the council of
Nordecon  AS  totalled  EUR106  thousand  and  the related social security charges
amounted   to   EUR35   thousand   (H1   2024: EUR100  thousand  and  EUR33  thousand,
respectively).
The  service  fees  of  the  members  of  the board of Nordecon AS totalled EUR281
thousand  and the related  social security charges  amounted to EUR93 thousand (H1
2024: EUR264 thousand and EUR87 thousand, respectively).

Labour productivity and labour cost efficiency

We  measure  the  efficiency  of  our  operating  activities using the following
productivity  and  efficiency  indicators,  which  are  based  on  the number of
employees and the staff costs incurred:

                                                H1 2025 H1 2024 H1 2023   2024
------------------------------------------------------------------------------
 Nominal labour productivity (rolling), (EUR'000)   469.7   553.9   488.3 514.03

 Change against the comparative period, %       (15.2)%   13.4%    3.9%   3.0%



 Nominal labour cost efficiency (rolling), (EUR)      8.7    11.0    11.0    9.3

 Change against the comparative period, %       (21.3)%    0.4% (11.0)% (9.7)%


The  group's  nominal  labour  productivity  and  nominal labour cost efficiency
decreased  year on year because the  decline in revenue outstripped the decrease
in staff numbers and costs.

Andri Hõbemägi
Nordecon AS
Head of Investor Relations
Tel: +372 6272 022
Email: [email protected] (mailto:[email protected])
www.nordecon.com (http://www.nordecon.com)