Merko Ehitus: 2022 3 months consolidated unaudited interim report


Merko sales revenue in the first quarter was EUR 68.4 million and net profit EUR 3.0 million. The sales revenue for the 3 months of 2022 increased by 14% compared to the same period of previous year and net profit decreased by 11%.

According to the management of Ehitus, the situation on the construction market continues to be extremely complicated due to global supply chain problems and a rise in the cost of materials. The rapid rise of construction inputs last year was exacerbated by the war in Ukraine and sanctions imposed on Russia, and a price shock. These are unforeseen circumstances whose impact on performance of construction contracts is yet to become apparent. In today’s situation, mutual cooperation of all counterparties, including the customers, will be very important to resolve challenges of a construction project.

On the apartment market, the supply of new apartments has been in a declining trend for some time now, while apartment prices have grown quickly due to the rise in construction prices. The war in Ukraine has amplified these developments even further. Accelerating inflation reduces purchasing power on one hand, but on the other hand it encourages home buying and investment into real estate for those with capital and lending capacity. According to the management, ’s goal is to continue to provide a high-quality product and service to enable such investments.

In the first quarter, delivered 126 apartments and one commercial area to buyers. Most of the apartments to be delivered this year will be completed in the H2. As of the end of the quarter, close to 1,700 apartments due to be completed in 2022 and 2023 are under construction in Estonia, Latvia and Lithuania. Of the apartments already finished, only a few are unsold and over half of the ones in progress have already been reserved under preliminary sale contracts. The largest apartment developments were Noblessner, Uus-Veerenni, Odra, Metsatuka and Lahekalda in Tallinn; Erminurme in Tartu; Viesturdārzs and MeĆŸpilsēta in Riga, and Vilneles Skverai in Vilnius.

Although the need for new buildings and infrastructure remains, adapting to the rapid growth of construction prices will take time and some of the planned investments will be put on pause. Nor are construction companies prepared to enter into longer-term contracts at a fixed given the current situation. The development of new supply chains takes time and it is unclear when and at what price levels a certain stabilization could take place. Preference is given to customers who are prepared to offer flexibility the construction company in covering the price increase of input prices, to focus on the functionality of the object under construction and on timely completion, and not only on keeping the cost to a minimum.

In the first quarter of this year, the group’s companies entered into construction contracts worth EUR 171 million, of which the 100-million-euro contract for the construction of the Arter quarter in was the biggest. The secured order-book balance grew to EUR 376 million by the end of the quarter, and three-quarters of the portfolio was made up by private sector orders. In Q1, increased its holding in the network construction company AS Connecto Eesti from 35% to 50%.

In the first quarter of 2022, the largest objects in operation in Estonia were the third phase of the third development phase of the MustamĂ€e medical campus of the North-Estonia Medical Centre, the Tallinn School of Music and Ballet, St John’s School and the Arter quarter, and also the construction of infrastructure segments of the Republic of Estonia’s southeast land border. In Latvia, the Orkla wafer and biscuit production plant, GUSTAVS business centre, Elemental Skanste office buildings, NATO facilities in ĀdaĆŸi and the Kauguri city park and youth house were in progress; and in Lithuania, infrastructure for a number of wind farms a car service centre in and the Continental Automotive production building in Kaunas.



2022 3 months’ pre-tax profit was EUR 3.5 million (3M 2021: EUR 3.7 million), which brought the pre-tax profit margin to 5.1% (3M 2021: 6.2%).
Net profit attributable to shareholders for 3 months 2022 was EUR 3.0 million (3M 2021: EUR 3.4 million) and 3 months net profit margin was 4.4% (3M 2021: 5.6%).


2022 3 months’ revenue was EUR 68.4 million (3M 2021: EUR 60.1 million). 3 months’ revenue increased by 13.8% compared to same period last year. The share of revenue earned outside Estonia in 3 months 2022 was 56.2% (3M 2021: 36.9%).


As of 31 March 2022, the group’s secured order book was EUR 376.1 million (31 March 2021: EUR 281.2 million). In 3 months 2022, group companies signed contracts in the amount of EUR 171.2 million (3M 2021: EUR 97.4 million).


In 3 months 2022, the group sold a total of 126 apartments; in 3 months 2021, the group sold 90 apartments. The group earned a revenue of EUR 15.5 million from sale of own developed apartments in 3 months 2022 and EUR 14.8 million in 3 months 2021.


At the end of the reporting period, the group had EUR 29.9 million in cash and cash equivalents, and equity of EUR 170.3 million (50.0% of total assets). Comparable figures as of 31 March 2021 were EUR 54.8 million and EUR 156.6 million (58.1% of total assets), respectively. As of 31 March 2022, the group’s net debt was EUR 23.6 million (31 March 2021: negative EUR – 22.4 million).


in thousand euros

3 months
3 months
12 months
Revenue 68,426 60,107 339,375
Cost of goods sold (60,554) (53,133) (292,563)
Gross profit 7,872 6,974 46,812
Marketing expenses (1,115) (947) (3,611)
General and administrative expenses (3,723) (2,715) (13,925)
Other operating income 686 675 3,508
Other operating expenses (61) (54) (582)
Operating profit 3,659 3,933 32,202
Finance income/costs (160) (184) (75)
incl. finance income/costs from associates and joint venture (2) 7 799
interest expense (162) (146) (681)
foreign exchange gain (loss) 52 (8)
other financial income (expenses) (48) (45) (185)
Profit before tax 3,499 3,749 32,127
Corporate income tax expense (421) (429) (3,104)
Net profit for financial year 3,078 3,320 29,023
incl. net profit attributable to equity holders of the parent 3,006 3,368 29,140
net profit attributable to non-controlling interest 72 (48) (117)
Other comprehensive income, which can subsequently be classified in the income statement
Currency translation differences of foreign entities 16 23 33
Comprehensive income for the period 3,094 3,343 29,056
incl. net profit attributable to equity holders of the parent 3,020 3,392 29,163
net profit attributable to non-controlling interest 74 (49) (107)
Earnings per share for profit attributable to equity holders of the parent (basic and diluted, in EUR) 0.17 0.19 1.65



in thousand euros

31.03.2022 31.03.2021 31.12.2021
Current assets      
Cash and cash equivalents 29,881 54,792 44,930
Trade and other receivables 57,331 35,362 55,484
Prepaid corporate income tax 53 320 114
Inventories 187,848 126,748 160,593
  275,113 217,222 261,121
Non-current assets
Investments in associates and joint ventures 9,377 2,361 7,703
Other long-term loans and receivables 23,878 20,457 24,079
Deferred income tax assets 793 623 622
Investment property 13,803 13,897 13,828
Property, plant and equipment 16,966 14,484 16,350
Intangible assets 653 721 669
65,470 52,543 63,251
TOTAL ASSETS 340,583 269,765 324,372
Current liabilities
Borrowings 11,554 13,626 11,636
Payables and prepayments 103,801 63,196 90,054
Income tax liability 956 1,429 681
Short-term provisions 6,825 5,366 7,976
123,136 83,617 110,347
Non-current liabilities
Long-term borrowings 41,938 18,767 41,001
Deferred income tax liability 3,159 3,032 3,112
Other long-term payables 2,244 3,570 2,900
47,341 25,369 47,013
TOTAL LIABILITIES 170,477 108,986 157,360
Non-controlling interests (153) 4,159 (227)
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 (777) (790) (791)
Retained earnings 162,314 148,688 159,308
170,259 156,620 167,239
TOTAL EQUITY 170,106 160,779 167,012
TOTAL LIABILITIES AND EQUITY 340,583 269,765 324,372

Interim report is attached to the announcement and is also published on NASDAQ Tallinn and ’s web page (


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