Börsiteade

Pealkiri

2021 3 months consolidated unaudited interim report

Teade

COMMENTARY FROM MANAGEMENT

In  Q1 2021, Merko Ehitus posted revenue of EUR 60 million and net profit of EUR
3.4 million,  increasing by  7% and 67%, respectively,  compared to the previous
year. In three months, Merko sold 90 apartments and started construction of more
than  560 apartments. The volume  of the new  construction contracts and secured
order book also increased in the first quarter.

The  management of Merko Ehitus  is satisfied with the  financial results of the
first  quarter. Despite  the lack  of new  commercial real  estate projects, the
construction  market in the  Baltic Republics is  currently quite active. At the
same  time,  prospects  remain  unclear  due  to the continuing pandemic and the
global rise in material prices.

In  the  first  quarter,  Merko  sold  90 apartments in Tallinn, Tartu, Riga and
Vilnius. The apartment market is relatively active in all three Baltic capitals.
In  the first quarter Merko group  launched construction work on six development
projects  with a total of 567 apartments and 20 commercial premises. Most of the
apartments  under construction  and for  sale today  will be completed in 2022.
Merko's  largest apartment  development projects  were Noblessner, Uus-Veerenni,
Metsatuka,  Lahekalda and Pikaliiva, in  Tallinn; Gai?ezers and Viesturd?rzs, in
Riga; and Vilneles Skverai, in Vilnius.

In Q1 2021, Merko entered into new contracts worth 97 million euros, the largest
of which were for the construction of the second development phase of Noblessner
and  the Liivalaia  Quarter, in  Estonia, and  for the construction of Tondiraba
Park.  The group's companies signed in Latvia a contract for the construction of
Kauguri City Park and Youth House, as well as in Lithuania a production building
in  Kaunas and a car maintenance  centre in Vilnius. As at  the end of the first
quarter,  the secured  order book  increased by  45% year-on-year to 281 million
euros.

In  the first 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, the renovation of the Nordic Hotel Forum and
Tallink  City Hotel,  and the  design and  construction of infrastructure of the
Republic  of Estonia's southeast land border. In Latvia, the construction of the
Orkla  waffle and biscuit factory, in ?dazhi,  and the reconstruction of the Riga
University  of  Technology  faculty  building  were  in  progress; in Lithuania,
construction of wind farm infrastructure facilities in the Telshiai district, the
Kaunas  district  police  headquarters  building,  and  NATO  barracks  were  in
progress.

OVERVIEW OF THE 3 MONTHS RESULTS

PROFITABILITY
2021 3 months' profit before tax was EUR 3.7 million (3M 2020: EUR 2.1 million),
which brought the profit before tax margin to 6.2% (3M 2020: 3.7%).
Net profit attributable to equity holders of the parent in 3 months 2021 was EUR
3.4 million  (3M 2020: EUR 2.0 million) and 3 months net profit margin was 5.6%
(3M 2020: 3.6%).

REVENUE
2021 3 months'  revenue  was  EUR  60.1 million  (3M 2020: EUR 55.9 million). 3
months'  revenue increased by 7.6% compared to  same period last year. The share
of revenue earned outside Estonia in 3 months 2021 was 36.9% (3M 2020: 53.5%).

SECURED ORDER BOOK
As  at 31 March 2021, the  group's secured order  book was EUR 281.2 million (31
March  2020: EUR 193.0 million).  In 3 months  2021, group companies  signed new
contracts in the amount of EUR 97.4 million (3M 2020: EUR 87.2 million).

REAL ESTATE DEVELOPMENT
In 3 months 2021, the group sold a total of 90 apartments (incl. 1 apartments in
a  joint venture);  in 3 months  2020, the group  sold 133 apartments  (incl. 2
apartments  in a joint venture). The group  earned a revenue of EUR 14.8 million
from  sale of own developed apartments  in 3 months 2021 and EUR 18.6 million in
3 months 2020.

CASH POSITION
At  the end of the reporting period, the  group had EUR 54.8 million in cash and
cash  equivalents,  and  equity  of  EUR  156.6 million (58.1% of total assets).
Comparable  figures as  at 31 March  2020 were EUR  37.1 million and  EUR 132.2
million  (45.7% of total assets), respectively. As at 31 March 2021, the group's
net debt was EUR -22.4 million (negative) (31 March 2020: EUR 29.8 million).

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
unaudited
in thousand euros

                                                        2021     2020      2020
                                                    3 months 3 months 12 months

 Revenue                                              60,107   55,872   315,918

 Cost of goods sold                                 (53,133) (50,398) (272,169)

 Gross profit                                          6,974    5,474    43,749



 Marketing expenses                                    (947)    (948)   (4,212)

 General and administrative expenses                 (2,715)  (2,805)  (13,412)

 Other operating income                                  675      508     2,320

 Other operating expenses                               (54)     (63)   (2,979)

 Operating profit                                      3,933    2,166    25,466



 Finance income/costs                                  (184)     (99)   (1,009)

 incl. finance income/costs from joint venture             7       90     (144)

 interest expense                                      (146)    (172)     (719)

 foreign exchange gain (loss)                              -        -       (7)

 other financial income (expenses)                      (45)     (17)     (139)

 Profit before tax                                     3,749    2,067    24,457



 Corporate income tax expense                          (429)    (138)   (1,954)



 Net profit for financial year                         3,320    1,929    22,503

 incl. net profit attributable to equity holders of
 the parent                                            3,368    2,019    22,994

 net profit attributable to non-controlling
 interest                                               (48)     (90)     (491)

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

 Currency translation differences of foreign
 entities                                                 23    (188)     (115)

 Comprehensive income for the period                   3,343    1,741    22,388

 incl. net profit attributable to equity holders of
 the parent                                            3,392    1,823    22,890

 net profit attributable to non-controlling
 interest                                               (49)     (82)     (502)

 Earnings per share for profit attributable to
 equity holders of the parent (basic and diluted,
 in EUR)                                                0.19     0.11      1.30

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
unaudited
in thousand euros

                                               31.03.2021 31.03.2020 31.12.2020

 ASSETS

 Current assets

 Cash and cash equivalents                         54,792     37,056     47,480

 Trade and other receivables                       35,362     42,133     32,657

 Prepaid corporate income tax                         320         91        306

 Inventories                                      126,748    168,833    126,332

                                                  217,222    248,113    206,775

 Non-current assets

 Investments in joint venture                       2,361      2,588      2,354

 Other long-term loans and receivables             20,457     11,991     17,979

 Deferred income tax assets                           623          -        653

 Investment property                               13,897     14,021     13,922

 Property, plant and equipment                     14,484     11,699     14,521

 Intangible assets                                    721        724        711

                                                   52,543     41,023     50,140



 TOTAL ASSETS                                     269,765    289,136    256,915



 LIABILITIES

 Current liabilities

 Borrowings                                        13,626     21,496     13,649

 Payables and prepayments                          63,196     73,488     55,846

 Income tax liability                               1,429        816      1,202

 Short-term provisions                              5,366      6,866      6,347

                                                   83,617    102,666     77,044

 Non-current liabilities

 Long-term borrowings                              18,767     45,355     15,409

 Deferred income tax liability                      3,032      1,655      3,001

 Other long-term payables                           3,570      3,164      4,026

                                                   25,369     50,174     22,436



 TOTAL LIABILITIES                                108,986    152,840     99,480



 EQUITY

 Non-controlling interests                          4,159      4,135      4,207

 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                   (790)      (906)      (814)

 Retained earnings                                148,688    124,345    145,320

                                                  156,620    132,161    153,228

 TOTAL EQUITY                                     160,779    136,296    157,435



 TOTAL LIABILITIES AND EQUITY                     269,765    289,136    256,915

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/)).

Priit Roosimägi
Head of Group Finance Unit
AS Merko Ehitus
+372 650 1250
[email protected] (mailto:[email protected])

AS  Merko Ehitus (group.merko.ee (https://group.merko.ee/en/)) 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  main  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.