Börsiteade

Pealkiri

2023 II quarter and 6 months consolidated interim report (unaudited)

Teade

The  dynamics of the  construction market reflect  the ongoing economic downturn
and  uncertainty about  the future.  Although the  increase in  the construction
price index slowed in the second quarter of this year and the construction price
index  fell by 0.5% compared to the first quarter of 2023, no significant change
in  demand can be observed in the  construction market. Loan interest rates have
not  stabilized due to the increase in Euribor so far, and this also affects the
decisions  of  clients.  Public  orders  have  not  yet recovered to their usual
volume,  many ongoing procurements are in a  frozen state and there are no signs
of  a reversal in this trend yet. On  the side of private customers, however, we
see optimism and a will to find ways to realize their business plans in order to
emerge from today's economic situation as a winner.
The  group's  sales  revenue  for  the  first  half of 2023 amounted to EUR123,819
thousand, a decrease of approximately 17% compared to the same period last year.
Sales revenue decreased in both segments, 19% in the Buildings segment and 4% in
the  Infrastructure segment. The  decrease in sales  revenue in both segments is
expected  and is due  to the decline  in construction volumes  in the market, as
well as the 2022 group's historically record sales revenue.
The  gross profit  of the  Nordecon group  in the  first half of 2023 was EUR4,731
thousand. Compared to the same period last year, the group's gross profitability
has  improved, amounting to 3.8% in the first  half of the year (H1 2022: 2.1%)
and 4.5% in the second quarter (Q2 2022: 2.5%). Both segments were profitable in
the  first half of the year as well  as in the second quarter, and profitability
improved significantly compared to the same period in 2022.
The group has been successful in signing new contracts in the first half of this
year.  In total,  new contracts  worth EUR208,460  thousand were signed, including
EUR123,530  thousand in  the II  quarter. As  of 30 June  2023, the volume  of the
group's order book was EUR256,328 thousand, which compared to the same period last
year has increased by 16%.

Condensed consolidated interim statement of financial position

 EUR'000                                            30 June 2023 31 December 2022
-------------------------------------------------------------------------------
 ASSETS

 Current assets

 Cash and cash equivalents                               8,369            7,238

 Trade and other receivables                            54,734           48,084

 Prepayments                                             5,514            6,728

 Inventories                                            28,880           25,454

 Total current assets                                   97,497           87,504

 Non-current assets

 Other investments                                          76               76

 Trade and other receivables                             8,957            8,604

 Investment property                                     5,547            8,347

 Property, plant and equipment                          16,774           17,669

 Intangible assets                                      15,152           15,134

 Total non-current assets                               46,506           49,830

 TOTAL ASSETS                                          144,003          137,334



 LIABILITIES

 Current liabilities

 Borrowings                                             16,701           17,193

 Trade payables                                         69,420           65,144

 Other payables                                          7,034            8,324

 Deferred income                                        14,726            6,996

 Provisions                                              1,160            1,288

 Total current liabilities                             109,041           98,945

 Non-current liabilities

 Borrowings                                              5,767            6,311

 Trade payables                                          2,080            2,769

 Provisions                                              2,546            2,049

 Total non-current liabilities                          10,393           11,129

 TOTAL LIABILITIES                                     119,434          110,074



 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                                     3,570            3,316

 Retained earnings                                         198            2,691

 Total equity attributable to owners of the
 parent                                                 20,676           22,915

 Non-controlling interests                               3,893            4,345

 TOTAL EQUITY                                           24,569           27,260

 TOTAL LIABILITIES AND EQUITY                          144,003          137,334

Condensed consolidated interim statement of comprehensive income

 EUR'000                            H1 2023  Q2 2023   H1 2022  Q2 2022      2022
-------------------------------------------------------------------------------
 Revenue                          123,819   76,166   149,256   80,803   322,860

 Cost of sales                  (119,088) (72,757) (146,075) (78,769) (314,365)

 Gross profit                       4,731    3,409     3,181    2,034     8,495



 Marketing and distribution
 expenses                           (317)    (181)     (186)    (115)     (490)

 Administrative expenses          (3,852)  (1,982)   (3,118)  (1,513)   (7,287)

 Other operating income               313      201     1,856      103     2,049

 Other operating expenses           (202)    (169)     (276)      (2)     (462)

 Operating profit                     673    1,278     1,457      507     2,305



 Finance income                       145       71       146       79       258

 Finance costs                    (1,812)    (912)   (1,377)     (43)   (3,740)

 Net finance income (costs)       (1,667)    (841)   (1,231)       36   (3,482)



 Profit (loss) before income
 tax                                (994)      437       226      543   (1,177)

 Income tax expense                 (596)    (353)     (200)    (200)     (264)

 Profit (loss) for the period     (1,590)       84        26      343   (1,441)



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

 Exchange differences on
 translating foreign operations       254       85     (259)    (413)     1,368

 Total other comprehensive
 income (expense)                     254       85     (259)    (413)     1,368

 TOTAL COMPREHENSIVE INCOME
 (EXPENSE)                        (1,336)      169     (233)     (70)      (73)



 Profit (loss) attributable to:

 - Owners of the parent           (2,493)    (619)     (928)     (10)   (3,650)

 - Non-controlling interests          903      703       954      353     2,209

 Profit (loss) for the period     (1,590)       84        26      343   (1,441)



 Comprehensive income (expense)
 attributable to:

 - Owners of the parent           (2,239)    (534)   (1,187)    (423)   (2,282)

 - Non-controlling interests          903      703       954      353     2,209

 Comprehensive income (expense)
 for the period                   (1,336)      169     (233)     (70)      (73)



 Earnings per share
 attributable to owners of the
 parent:

 Basic earnings per share (EUR)      (0.08)   (0.02)    (0.03)   (0.00)    (0.12)

 Diluted earnings per share (EUR)    (0.08)   (0.02)    (0.03)   (0.00)    (0.12)

Condensed consolidated interim statement of cash flows

  EUR'000                                    H1 2023     H1 2022
---------------------------------------------------------------
  Cash flows from operating activities

  Cash receipts from customers             157,087     177,608

  Cash paid to suppliers                 (133,900)   (162,328)

  VAT paid                                 (5,531)     (4,447)

  Cash paid to and for employees          (12,640)    (12,476)

  Income tax paid                            (687)       (312)

  Net operating cash                         4,329     (1,955)



  Cash flows from investing activities

  Acquisition of PP&E                        (185)        (97)

  Proceeds from sale of PP&E                   291         322

  Acquisition of intangible assets               0           0

  Loans provided                             (524)         (9)

  Repayments of loans provided                  10          11

  Dividends received                            12           6

  Interest received                              9           6

  Net investing cash                         (387)         239



  Cash flows from financing activities

  Proceeds from loans received               1,242       1,870

  Repayments of loans received               (650)     (1,605)

  Lease payments made                      (1,447)     (1,790)

  Interest paid                              (601)       (428)

  Dividends paid                           (1,355)       (391)

  Other payments made                            0         (4)

  Net financing cash                       (2,811)     (2,348)



  Net cash flow                              1,131     (4,064)



  Cash at beginning of period                7,238       9,031

  Change in cash and cash equivalents        1,131     (4,064)

  Cash at end of period                      8,369       4,967

Financial review

Financial performance

Nordecon ended the first half of 2023 with a gross profit of EUR4,731 thousand (H1
2022: EUR3,181  thousand). Profitability  improved year  on year  with the group's
gross  margin rising to 3.8% for the  half-year (H1 2022: 2.1%) and 4.5% for the
second  quarter (Q2 2022: 2.5%). Both operating segments earned a profit in both
the  second quarter  and the  first half  year and  improved their profitability
significantly.  The gross margin of the Buildings segment was 5.0% for the half-
year  and  4.9% for  the  second  quarter (H1 2022: 3.8% and Q2 2022: 3.4%). The
gross  margins of the Infrastructure segment  were lower: 0.1% for the half-year
and 4.5% for the second quarter (H1 2022: (6.4)% and Q2 2022: (0.3)%).
The  group's  administrative  expenses  for  the  period  were  EUR3,852 thousand.
Compared  with a  year earlier,  administrative expenses  grew by around 24% (H1
2022: EUR3,118 thousand) due to growth in staff costs. The ratio of administrative
expenses  to revenue (12 months rolling) increased year on year, rising to 2.7%
(H1 2022: 2.0%).
The group earned an operating profit of EUR673 thousand in the first half of 2023
(H1 2022: EUR1,457 thousand). EBITDA for the period was EUR2,405 thousand (H1 2022:
EUR3,158  thousand). The  operating profit  and EBITDA  for the comparative period
were  influenced  by  other  income  of  EUR1,560  thousand,  recognised after the
approval of the restructuring plan of Swencn AB according to which the claims of
the entity's creditors were to be settled to the extent of 25%.
The  group's finance income and costs are affected by exchange rate fluctuations
in  the  group's  foreign  markets.  During  the  period,  the Ukrainian hryvnia
weakened  against the euro by around 2.6% and the Swedish krona weakened against
the  euro by around 5.8%. The  translation of the loans  provided to the group's
Ukrainian  and Swedish subsidiaries in euros into the local currencies gave rise
to  a net  exchange loss  of EUR241  thousand (H1  2022: EUR2 thousand). The group's
finance costs also grew due to the rise in interest rates.
The  group ended the period  with a net loss  of EUR1,590 thousand (H1 2022: a net
profit  of EUR26  thousand). The  net loss  attributable to  owners of the parent,
Nordecon AS, was EUR2,493 thousand (H1 2022: a net loss of EUR928 thousand).

Cash flows

Operating  activities in the  first half of  2023 produced a net  cash inflow of
EUR4,329 thousand (H1 2022: an outflow of EUR1,955 thousand). Operating cash flow is
strongly  influenced by the fact that the  contracts signed with most public and
private  sector customers do not require them to make advance payments while the
group  has to make  prepayments to subcontractors  and materials suppliers. Cash
inflow  is also reduced by contractual retentions, which extend from 5 to 10% of
the contract price and are released at the end of the construction period only.
Investing  activities  of  the  period  resulted  in  a net cash outflow of EUR387
thousand  (H1 2022: an inflow of EUR239  thousand). Investments in property, plant
and  equipment amounted  to EUR185  thousand (H1  2022: EUR97 thousand) and proceeds
from  the sale of  property, plant and  equipment amounted to  EUR291 thousand (H1
2022: EUR322  thousand).  Loans  provided  amounted  to EUR524 thousand (H1 2022: EUR9
thousand).
Financing  activities for the half  year generated a net  cash outflow of EUR2,811
thousand  (H1 2022: an outflow  of EUR2,348 thousand).  Loans received amounted to
EUR1,242  thousand, consisting  of the  use overdrafts  and development  loans (H1
2022: EUR1,870  thousand).  Repayments  of  loans  received were EUR650 thousand (H1
2022: EUR1,605 thousand), consisting of regular repayments of long-term investment
and  development  loans.  Lease  payments  were EUR1,447 thousand (H1 2022: EUR1,790
thousand).  Dividends paid in the first half of 2023 amounted to EUR1,355 thousand
(H1 2022: EUR391 thousand).
The  group's  cash  and  cash  equivalents  at  30 June  2023 amounted to EUR8,369
thousand (30 June 2022: EUR4,967 thousand).

Key financial figures and ratios

 Figure/ratio                     H1 2023      H1 2022      H1 2021        2022
-------------------------------------------------------------------------------
 Revenue (EUR'000)                  123,819      149,256      117,966     322,860

 Revenue change                     (17)%          27%        (14)%       11.9%

 Net profit (loss) (EUR'000)        (1,590)           26      (2,390)     (1,441)

 Net      profit      (loss)
 attributable  to  owners of
 the parent (EUR'000)               (2,493)        (928)      (2,148)     (3,650)

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

 Earnings per share (EUR)            (0.08)       (0.03)       (0.07)      (0.12)

 Administrative  expenses to
 revenue                             3.1%         2.1%         2.4%        2.3%

 Administrative  expenses to
 revenue (rolling)                   2.7%         2.0%         2.2%        2.3%

 EBITDA (EUR'000)                     2,405        3,158           92       5,766

 EBITDA margin                       1.9%         2.1%         0.1%        1.8%

 Gross margin                        3.8%         2.1%         1.1%        2.6%

 Operating margin                    0.5%         1.0%       (1.4)%        0.7%

 Operating  margin excluding
 gain  on  non-current asset
 sales                               0.4%         0.9%       (1.4)%        0.6%

 Net margin                        (1.3)%         0.0%       (2.0)%      (0.4)%

 Return on invested capital        (1.0)%         1.2%       (2.1)%      (0.5)%

 Return on equity                  (6.1)%         0.1%       (6.9)%      (5.2)%

 Equity ratio                       17.1%        18.2%        22.6%       19.8%

 Return on assets                  (1.1)%         0.0%       (1.7)%      (1.1)%

 Gearing                            30.0%        37.2%        31.4%       32.0%

 Current ratio                       0.89         0.91         0.97        0.88

                             30 June 2023 30 June 2022 30 June 2021 31 Dec 2022
-------------------------------------------------------------------------------
 Order     book
 (EUR'000)                          256,328      220,687      269,448     149,799
-------------------------------------------------------------------------------

Performance by geographical market

The  revenue contribution  of foreign  markets has  remained more or less stable
compared  with the  same period  last year.  In the  first half of 2023, revenue
earned  outside Estonia,  i.e. in  Finland and  Ukraine, accounted for 2% of the
group's  total  revenue.  Despite  the  war,  Nordecon's construction volumes in
Ukraine  have increased year  on year. We  have secured a  number of small-scale
projects  and in June we completed and  delivered on time a modular kindergarten
with  a bomb  shelter in  the city  of Ovruch.  Finnish revenues,  which include
mainly  subcontracting  revenue  from  the  provision  of  concrete  works, have
decreased. Nordecon did not generate any revenue and had no ongoing construction
contracts  in the  Swedish market.  Nor did  the group  generate any  revenue in
Latvia and Lithuania, where we operate on a project basis.

              H1 2023   H1 2022   H1 2021   2022
-------------------------------------------------
  Estonia         98%       97%       96%    96%

  Finland          1%        1%        3%     2%

  Ukraine          1%        0%        1%     0%

  Latvia           0%        2%        0%     1%

  Lithuania        0%        0%        0%     1%

Performance by business line

Segment revenues

Our  targets include maintaining the revenues of our two main operating segments
(Buildings  and  Infrastructure)  in  balance,  if  this  is permitted by market
conditions, because this helps diversify risks and provides better opportunities
to  continue construction operations in more challenging market conditions where
the  volumes of one subsegment may decline  sharply while the volumes of another
may begin growing more rapidly.
The  group's revenue for  the first half  of 2023 was EUR123,819 thousand, roughly
17% less  than  in  the  same  period  last  year,  when the figure was EUR149,256
thousand.  The Buildings segment generated revenue  of EUR103,970 thousand and the
Infrastructure  segment revenue  of EUR19,822  thousand. The corresponding figures
for the same period in 2022 were EUR128,430 thousand and EUR20,703 thousand. Revenue
declined  by 19% in the Buildings segment  and 4% in the Infrastructure segment.
The  decrease  in  both  segments  was  expected  and  is attributable to market
contraction.  Although the group was successful  in winning new contracts in the
first  half of 2023, these did not yet  affect revenue for the period. The steep
fall in the revenue of the Infrastructure segment to its practically lowest-ever
level  is  directly  related  to  cutbacks  in  the  investments  of the largest
customer,  the Transport Administration. This  is counterbalanced to some extent
by  the group's success in securing  renewable energy projects: the construction
of  wind  farms  accounts  for  an  increasing  share  of  the  revenue  of  the
Infrastructure segment.

  Revenue by operating segment   H1 2023   H1 2022   H1 2021   2022
--------------------------------------------------------------------
  Buildings                          84%       84%       78%    81%

  Infrastructure                     16%       16%       22%    19%

Subsegment revenues

In  the Buildings segment,  the half-year revenues  of all subsegments decreased
compared  with the  same period  in 2022. The  largest revenue  contributors are
still  the  public  buildings  and  the  apartment  buildings  subsegments whose
revenues  decreased  less.  The  revenues  of  the  commercial buildings and the
industrial   and   warehouse   facilities   subsegments,   however,   contracted
significantly, falling by 46% and 23% year on year, respectively.
The  period's  largest  projects  in  the  public  buildings subsegment were the
construction  of the main building of  the Estonian Internal Security Service in
Tallinn,  the design and construction of storage facilities and utility networks
for  the Centre for Defence Investment in  Harju county, the construction of the
building  and outdoor premises of the  Karlsson kindergarten in Viljandi and the
construction of the Viljandi Rescue Station.
The   apartment  buildings  subsegment  earns  most  of  its  revenue  from  the
construction  of apartment buildings  for third parties.  During the period, the
largest projects of this kind were the design and construction of the Luccaranna
and  the  Kastanikodu  housing  estates  near  Tallinn. Revenue generated by the
group's  own development operations decreased,  amounting to EUR5,510 thousand (H1
2022: EUR6,335 thousand). Nordecon continues the development of the Mõisavahe Kodu
(https://moisavahe.ee)  housing  estate  and  the  construction  of  the  Emajõe
Residents (https://emajoeresidents.ee)  housing estate,  which is  situated near
the  city centre on the bank of the  river Emajõgi (both in Tartu). The group is
also  making preparations for  the construction of  an apartment building in the
Kivimäe    Süda    development    in    the    Nõmme    district    in   Tallinn
(https://www.kivimaesuda.ee/en)  and moving  on with  the design  of the Seileri
Kvartal housing estate in Pärnu (https://seileri.ee/en). In carrying out our own
development  activities,  we  carefully  monitor  potential risks in the housing
development market.
The   largest   projects   in  the  commercial  buildings  subsegment  were  the
construction  of the commercial and residential  complex Vektor and the Ahtri 4
office  building  in  Tallinn,  the  design  and  construction  of  the  Männiku
commercial  building in the Kandiküla district in Tartu, and the construction of
a   biopharmaceuticals   manufacturing   facility  for  Icosagen  AS  in  Kambja
municipality.
The  largest  projects  under  construction  in  the  industrial  and  warehouse
facilities  subsegment  are  a  production  facility  for  E-Piim in Paide and a
production and office building for Harju Elekter AS in Hüüru, near Tallinn.

  Buildings segment                     H1 2023   H1 2022   H1 2021   2022
---------------------------------------------------------------------------
  Public buildings                          33%       28%       30%    30%

  Apartment buildings                       31%       30%       30%    28%

  Commercial buildings                      25%       26%       31%    24%

  Industrial and warehouse facilities       11%       16%        9%    18%

In  the Infrastructure  segment, the  largest revenue  contributor is still road
construction  and maintenance although its revenue has decreased year on year by
roughly  25%. During  the  period,  a  major  share  of the subsegment's revenue
resulted  from the construction of the Tagadi ecoduct on the Rail Baltica route,
the   construction   of   the   Neanurme-Pikknurme   2+1 road   section  of  the
Tallinn-Tartu-Võru-Luhamaa  road in Jõgeva county  and the reconstruction of the
Hageri-Kohila  road section in Harju county. The group also continues to deliver
road maintenance services in Järva county.
The revenue contribution of the other engineering subsegment, which is currently
generating  most  of  its  revenue  from  the  construction  of three wind farms
(Saarde,  Tootsi-Sopi and Aidu) in Estonia,  increased year on year. The revenue
of  the environmental engineering  subsegment came from  design and construction
works  for the  elimination of  residual pollution  from the  Erra river and the
Kiviõli ditch.

  Infrastructure segment              H1 2023   H1 2022   H1 2021   2022
-------------------------------------------------------------------------
  Road construction and maintenance       65%       81%       86%    75%

  Other engineering                       20%       14%        4%    20%

  Environmental engineering               15%        0%        5%     0%

  Specialist engineering                   0%        5%        5%     5%

Order book

The group's order book (backlog of contracts signed but not yet performed) stood
at EUR256,328 thousand at 30 June 2023, reflecting 16% growth compared to the same
period last year. The group signed new contracts of EUR208,460 thousand during the
half  year (H1 2022: EUR89,661 thousand), of  which contracts of EUR123,530 thousand
were  signed in  the second  quarter (Q2  2022: EUR26,494 thousand).  The surge in
materials  prices and the uptrend  in interest rates due  to the rise in EURIBOR
have  made  development  projects  significantly  more  expensive and caused the
postponement  of new projects.  The volume of  investments made by the Transport
Administration  has decreased sharply  and this has  had a direct  impact on the
size of the order book of the Infrastructure segment. The volume of procurements
for  the Rail Baltica  project has increased  and will partly counterbalance the
decline  in  the  investments  of  the  Transport  Administration.  While public
investments   in   the  buildings  construction  segment  have  also  decreased,
investments  in national defence infrastructure  are going to increase according
to  currently available information and this  is a subsegment where Nordecon has
traditionally been very successful.

                    30 June 2023 30 June 2022 30 June 2021 31 Dec 2022
----------------------------------------------------------------------
 Order book (EUR'000)      256,328      220,687      269,448     149,799

The  proportions of the  two main operating  segments in the  group's order book
have remained largely the same with the Buildings segment accounting for 80% and
the  Infrastructure segment for 20% of the  total order book (30 June 2022: 85%
and 15%, respectively). The order book of the Buildings segment increased by 9%
while the order book of the Infrastructure segment grew by 54% compared with 30
June  2022. Growth in the order book of the Infrastructure segment was driven by
the   other   engineering   subsegment,  which  has  secured  mostly  wind  farm
construction contracts.
Larger contracts secured in the second quarter include:

  * the reconstruction of the Hageri-Kohila section on kilometres 8.7-16.0 of
    national road no. 11220 Kernu-Kohila with an approximate cost of EUR3,460
    thousand;
  * the construction of wind turbine foundations for the Aidu wind farm in Ida-
    Viru county, Lüganuse municipality, with an approximate cost of EUR5,000
    thousand;
  * the construction of four terraced houses with 36 apartments in the
    Laaneserva housing estate in Viimsi municipality with an approximate cost of
    EUR6,800 thousand;
  * the construction of a new school building with a sports facility for Saku
    Upper Secondary School with an approximate cost of EUR24,100 thousand;
  * the design and construction of storage facilities for the Centre for Defence
    Investment in Harju county with an approximate cost of EUR8,400 thousand;
  * the construction of an office building for the Centre for Defence Investment
    in Tallinn, with an approximate cost of EUR13,000 thousand;
  * the design and construction of a commercial and residential building to be
    built on the corner of Volta and Kopli streets in Tallinn - the second stage
    of a new business quarter - with an approximate cost of EUR51,000 thousand;
  * the construction of office and production facilities at Vana-Narva mnt 10 in
    Maardu, with an approximate cost of EUR7,400 thousand.

Based  on the size of the group's order  book, including the share of work to be
performed  in  2023 and  2024, and  the  overall  situation  in the construction
market,  management  forecasts  that  in  2023 the group's revenue will decrease
compared  with 2022. Increasing competition and cost inflation, particularly the
growth  in labour costs, will continue to drive up input prices, which will keep
profit  margins under pressure. In an  environment of stiff competition, we will
avoid  taking unjustified  risks whose  realisation in  the contract performance
phase  would have an adverse impact on the group's results. Our focus remains on
cost  control as  well as  pre-construction and  design activities, where we can
deploy our professional competitive advantages.

People

Employees and staff costs

The  group's average  number of  employees in  the first  half of 2023 was 572,
including  384 engineers and technical  professionals (ETP). Headcount decreased
by  around 15% year  on year,  mainly due  to the  restructuring of  the group's
infrastructure construction business.

Average  number  of  employees  at  group  entities  (incl.  the  parent and the
subsidiaries):

                  H1 2023   H1 2022   H1 2021   2022
-----------------------------------------------------
  ETP                 384       437       426    432

  Workers             188       234       254    226

  Total average       572       671       680    658

The  group's staff costs for  the first half of  2023, including all taxes, were
EUR12,799  thousand compared with  EUR12,936 thousand in  the same period last year.
Pressures  for wage growth persist and the decline in staff costs was due to the
decrease in workforce.
The service fees of the members of the council of Nordecon AS for the first half
of  2023 were  EUR79  thousand  and  associated  social  security charges were EUR26
thousand (H1 2022: EUR75 thousand and EUR25 thousand, respectively).
The  service fees of the members of the  board of Nordecon AS were EUR253 thousand
and associated social security charges were EUR83 thousand (H1 2022: EUR202 thousand
and EUR67 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 staff costs incurred:

                                                 H1 2023 H1 2022 H1 2021  2022
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 Nominal labour productivity (rolling), (EUR '000)   488.3   470.0   403.3 490.4

 Change against the comparative period, %           3.9%   16.5%    4.6% 16.5%



 Nominal labour cost efficiency (rolling), (EUR)      11.0    12.3    10.9  11.8

 Change against the comparative period, %        (11.0)%   13.0%   12.7%  2.9%

The  group's nominal labour  productivity increased year  on year, mainly due to
the  decrease in the  number of staff.  The fall in  revenue has lowered nominal
labour cost efficiency.

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)