In the first half of the year, the gradual recovery of the Estonian economy continued, but the economic environment remained affected by geopolitical uncertainty and fluctuations in energy prices. According to the latest published forecasts, Estonia’s 2026 economic growth is expected to reach approximately 2.3–2.4%. Growth is primarily supported by the recovery of domestic demand, public sector investments, and improved financing conditions. In the construction sector, signs of stabilization and moderate recovery are evident. The market is mainly supported by investments related to national defense, infrastructure, and energy facilities, while the building construction segment continues to be characterized by modest investment activity.
The group’s sales revenue increased in both segments compared to the first 6 months of 2025, split between the Buildings and Infrastructure segments at 78% and 22%, respectively. The volume of the Buildings segment grew by 21% compared to H1 2025, while the Infrastructure segment grew by 165%. The group’s gross profitability was 4.7% and operating profitability was 1.9% in H1. Compared to the same period in 2025, profitability has decreased somewhat, but profit has increased on the back of sales revenue growth. The decline in profitability was driven by continuously rising input costs and the structure of the project portfolio, as a result of which the average profit margin of projects in progress during the reporting period was lower than in the comparable period a year earlier. On an annual basis, i.e. compared to 30 June 2025, the group’s order book increased by 7%. Order book volumes have grown in both the buildings and infrastructure segments. Based on the volume of the order book, group management forecasts growth in operating volumes in 2026.
Condensed consolidated interim statement of financial position
| €’000 | 30 June 2026 | 31 December 2025 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 6,093 | 5,266 |
| Other financial assets | 1,078 | 1,088 |
| Trade and other receivables | 46,164 | 46,348 |
| Prepayments | 3,865 | 3,274 |
| Inventories | 40,318 | 26,022 |
| Total current assets | 97,518 | 81,998 |
| Non-current assets | ||
| Other investments | 77 | 77 |
| Other financial assets | 2,410 | 1,810 |
| Trade and other receivables | 10,365 | 10,142 |
| Investment property | 3,814 | 5,517 |
| Property, plant and equipment | 13,650 | 12,234 |
| Intangible assets | 14,959 | 14,922 |
| Total non-current assets | 45,275 | 44,702 |
| TOTAL ASSETS | 142,793 | 126,700 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 10,713 | 12,049 |
| Trade payables | 65,184 | 49,569 |
| Other payables | 11,057 | 9,971 |
| Deferred income | 8,953 | 15,249 |
| Provisions | 766 | 3,863 |
| Total current liabilities | 96,673 | 90,701 |
| Non-current liabilities | ||
| Borrowings | 13,591 | 5,708 |
| Trade payables | 6,061 | 1,605 |
| Provisions | 2,616 | 5,730 |
| Total non-current liabilities | 22,268 | 13,043 |
| TOTAL LIABILITIES | 118,941 | 103,744 |
| 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 | 4,718 | 4,522 |
| Retained earnings | 577 | 141 |
| Total equity attributable to owners of the parent | 22,203 | 21,571 |
| Non-controlling interests | 1,649 | 1,385 |
| TOTAL EQUITY | 23,852 | 22,956 |
| TOTAL LIABILITIES AND EQUITY | 142,793 | 126,700 |
Condensed consolidated interim statement of comprehensive income
| €’000 | H1 2026 | Q2 2026 | H1 2025 | Q2 2025 | 2025 | ||
| Revenue | 126,913 | 74,910 | 92,638 | 53,283 | 208,281 | ||
| Cost of sales | (120,993) | (71,928) | (87,188) | (49,635) | (194,746) | ||
| Gross profit | 5,920 | 2,982 | 5,450 | 3,648 | 13,535 | ||
| Marketing and distribution expenses | (212 | (136) | (169) | (86) | (433) | ||
| Administrative expenses | (3,359) | (1,612) | (3,072) | (1,526) | (6,814) | ||
| Other operating income | 182 | 165 | 68 | 16 | 154 | ||
| Other operating expenses | (59) | (46) | (160) | (126) | (6,835) | ||
| Operating profit (loss) | 2,472 | 1,353 | 2,117 | 1,926 | (393) | ||
| Finance income | 216 | 105 | 258 | 113 | 499 | ||
| Finance costs | (1,988) | (1,019) | (1,904) | (1,165) | (3,464) | ||
| Net finance costs | (1,772) | (914) | (1,646) | (1,052) | (2,965) | ||
| Profit (loss) before tax | 700 | 439 | 471 | 874 | (3,358) | ||
| Income tax expense | (1) | (1) | 0 | 0 | (141) | ||
| Profit (loss) for the period | 699 | 438 | 471 | 874 | (3,499) | ||
| Other comprehensive income (loss): | |||||||
| Exchange differences on translating foreign operations | 196 | 115 | 473 | 569 | 488 | ||
| Total other comprehensive income | 196 | 115 | 473 | 569 | 488 | ||
| TOTAL COMPREHENSIVE INCOME (LOSS) | 895 | 553 | 944 | 1,443 | (3,011) | ||
| Profit (loss) attributable to: | |||||||
| – Owners of the parent | 436 | 334 | (134 | 482 | (4,605) | ||
| – Non-controlling interests | 264 | 104 | 605 | 392 | 1,106 | ||
| Profit (loss) for the period | 700 | 438 | 471 | 874 | (3,499) | ||
| Comprehensive income (loss) attributable to: | |||||||
| – Owners of the parent | 632 | 449 | 339 | 1,051 | (4,117) | ||
| – Non-controlling interests | 264 | 104 | 605 | 392 | 1,106 | ||
| Comprehensive income (loss) for the period | 896 | 553 | 944 | 1,443 | (3,011) | ||
| Earnings per share attributable to owners of the parent: | |||||||
| Basic earnings per share (€) | 0.01 | 0.01 | (0.00) | 0.02 | (0.15) | ||
| Diluted earnings per share (€) | 0.01 | 0.01 | (0.00) | 0.02 | (0.15) | ||
Condensed consolidated interim statement of cash flows
| €’000 | H1 2026 | H1 2025 |
| Cash flows from operating activities | ||
| Cash receipts from customers | 141,317 | 104,987 |
| Cash paid to suppliers | (123,637) | (88,153) |
| VAT paid | (2,872) | (3,252) |
| Cash paid to and for employees | (10,742) | (10,282) |
| Income tax paid | (367) | (350) |
| Net cash from operating activities | 3,699 | 2,950 |
| Cash flows from investing activities | ||
| Paid for acquisition of property, plant and equipment | (553) | (198) |
| Proceeds from sale of property, plant and equipment | 23 | 394 |
| Loans provided | (42) | (41) |
| Repayments of loans provided | 2 | 4 |
| Dividends received | 12 | 0 |
| Interest received | 35 | 61 |
| Other investments | (600) | (300) |
| Net cash used in investing activities | (1,123) | (80) |
| Cash flows from financing activities | ||
| Proceeds from loans received | 2,183 | 783 |
| Repayments of loans received | (1,125) | (640) |
| Payments of lease principal | (1,489) | (1,247) |
| Lease interest paid | (132) | (134) |
| Interest paid | (525) | (398) |
| Dividends paid | (637) | 0 |
| Other payments | (3) | 0 |
| Net cash used in financing activities | (1,728) | (1,636) |
| Net cash flow | 848 | 1,234 |
| Cash and cash equivalents at beginning of period | 5,266 | 8,195 |
| Effect of movements in foreign exchange rates | (21) | (103) |
| Change in cash and cash equivalents | 848 | 1,234 |
| Cash and cash equivalents at end of period | 6,093 | 9,326 |
Financial review
Financial performance
In the first half of 2026, Nordecon delivered a gross profit of €5,920 thousand (H1 2025: €5,450 thousand). Compared to the same period in 2025, the group’s gross profit increased by 9%, driven by revenue growth. However, the gross margin decreased to 4.7% (H1 2025: 5.9%). In the second quarter, the group’s gross profit amounted to €2,982 thousand (Q2 2025: €3,648 thousand) and the gross margin was 4.0% (Q2 2025: 6.8%).
Both segments made a profit during the period. The gross margin of the Buildings segment was 7.1% in the first half of the year and 5.6% in the second quarter, compared with 7.4% and 7.2% in the same periods in 2025. In the first half of 2026, the Infrastructure segment’s gross margin improved year on year, rising to 0.4% (H1 2025: (0.5)%). However, its gross margin for the second quarter decreased, falling from 8.2% in 2025 to 2.7%. Rising input prices and the composition of the project portfolio continued to impact profitability. Consequently, the average profit margin for projects in progress was lower than in the same period last year.
The group’s administrative expenses for the first half of 2026 were €3,359 thousand. Compared to the same period in 2025, administrative expenses increased by around 9% (H1 2025: €3,072 thousand), mainly due to growth in staff costs and expenses on services and materials. The ratio of administrative expenses to revenue (12 months rolling) decreased year on year, declining to 2.9% (H1 2025: 3.8%).
The group’s operating profit for the first half of 2026 amounted to €2,472 thousand (H1 2025: €2,117 thousand) and EBITDA was €3,844 thousand (H1 2025: €3,435 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 2026, the Ukrainian hryvnia weakened against the euro by around 2.6% and the Swedish krona weakened against the euro by around 2.5%. 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 €166 thousand (H1 2025: an exchange loss of €652 thousand) and an exchange loss of €9 thousand (H1 2025: an exchange gain of €11 thousand), respectively.
The group ended the period with a net profit of €699 thousand (H1 2025: a net profit of €471 thousand). Net profit attributable to owners of the parent, Nordecon AS, amounted to €436 thousand (H1 2025: a net loss of €134 thousand).
Cash flows
In the first half of 2026, the group’s operating activities produced a net cash inflow of €3,699 thousand (H1 2025: an inflow of €2,950 thousand). The items with the strongest impact were cash receipts from customers and cash paid to suppliers, which increased due to revenue growth, amounting to €141,317 thousand (H1 2025: €104,987 thousand) and €123,637 thousand (H1 2025: €88,153 thousand), respectively.
Investing activities resulted in a net cash outflow of €1,123 thousand (H1 2025: an outflow of €80 thousand). Payments made for investments in property, plant and equipment totalled €553 thousand (H1 2025: €198 thousand) and proceeds from the sale of property, plant and equipment amounted to €23 thousand (H1 2025: €394 thousand). Loans provided amounted to €42 thousand (H1 2025: €41 thousand), interest received amounted to €35 thousand (H1 2025: €61 thousand) and investments in long-term deposits totalled €600 thousand (H1 2025: €300 thousand).
Financing activities in the first half of 2026 generated a net cash outflow of €1,728 thousand (H1 2025: an outflow of €1,636 thousand). Proceeds from loans received amounted to €2,183 thousand, consisting mainly of the use of development loans (H1 2025: €783 thousand). Repayments of loans received totalled €1,125 thousand (H1 2025: €640 thousand). Lease payments amounted to €1,489 thousand (H1 2025: €1,247 thousand) and interest payments to €525 thousand (H1 2025: €398 thousand). Dividends paid in the first half of the year amounted to €637 thousand (H1 2025: no dividend payments).
At 30 June 2026, the group’s cash and cash equivalents amounted to €6,093 thousand (30 June 2025: €9,326 thousand).
Key financial figures and ratios
| Figure/ratio | H1 2026 | H1 2025 | H1 2024 | 2025 | |
| Revenue (€’000) | 126,913 | 92,638 | 114,945 | 208,281 | |
| Revenue change | 37% | (19)% | 33% | (7.0)% | |
| Net profit (loss) (€’000) | 699 | 471 | 1,802 | (3,499) | |
| Net profit (loss) attributable to owners of the parent (€’000) | 436 | (134) | 1,020 | (4,605) | |
| Weighted average number of shares | 31,528,585 | 31,528,585 | 31,528,585 | 31,528,585 | |
| Earnings per share (€) | 0.01 | 0.00 | 0.03 | (0.15) | |
| Administrative expenses to revenue | 2.6% | 3.3% | 2.9% | 3.3% | |
| Administrative expenses to revenue (rolling) | 2.9% | 3.8% | 3.2% | 3.3% | |
| EBITDA (€’000) | 3,844 | 3,435 | 4,690 | 2,206 | |
| EBITDA margin | 3.0% | 3.7% | 4.1% | 1.1% | |
| Gross margin | 4.7% | 5.9% | 6.3% | 6.5% | |
| Operating margin | 1.9% | 2.3% | 2.8% | (0.2)% | |
| Operating margin excluding gain on asset sales | 1.9% | 2.2% | 2.8% | (0.2)% | |
| Net margin | 0.6% | 0.5% | 1.6% | (1.7)% | |
| Return on invested capital | 3.0% | 2.0% | 6.2% | (5.5)% | |
| Return on equity | 3.0% | 1.7% | 7.8% | (14.1)% | |
| Equity ratio | 16.7% | 23.1% | 19.2% | 18.1% | |
| Return on assets | 0.5% | 0.4% | 1.5% | (2.9)% | |
| Gearing | 37.8% | 15.8% | 6.9% | 30.7% | |
| Current ratio | 1.01 | 0.91 | 0.88 | 0.90 | |
| 30 June 2026 | 30 June 2025 | 30 June 2024 | 31 Dec 2025 | ||
| Order book (€’000) | 324,374 | 303,914 | 178,799 | 273,060 | |
Performance by geographical market
Revenue generated in Ukraine accounted for approximately 1% of the group’s total revenue in the first half of 2026. Compared to the same period in 2025, revenue generated in Ukraine, as well as its share of the group’s total revenue, decreased. This was primarily due to the extremely challenging conditions in the country. At the start of the year, frequent power cuts and severe winter weather hindered work on construction sites and in building material production. Labour shortages are also becoming an increasingly serious problem. No revenue was generated in Sweden because the group had no construction contracts in progress in that market.
| H1 2026 | H1 2025 | H1 2024 | 2025 | |
| Estonia | 99% | 98% | 98% | 98% |
| Ukraine | 1% | 2% | 2% | 2% |
Performance by business line
Segment revenues
The group’s goals include maintaining a balance between the revenues of its two main operating segments (Buildings and Infrastructure) if market conditions permit. This helps diversify risk and provides better opportunities to continue construction activities in challenging market conditions, when volumes in one subsegment decline sharply, while volumes in another start to grow more rapidly.
The group’s revenue for the first half of 2026 was €126,913 thousand, approximately 37% higher than in the first half of 2025, when revenue amounted to €92,638 thousand. The Buildings segment generated revenue of €99,078 thousand and the Infrastructure segment generated revenue of €27,815 thousand. The corresponding figures for the first half of 2025 were €82,127 thousand and €10,501 thousand, respectively. Both segments increased their revenue: the Buildings segment by 21% and the Infrastructure segment by 165%. In the light of the size and structure of the group’s order book, the growth rates were in line with expectations.
| Revenue by operating segment | H1 2026 | H1 2025 | H1 2024 | 2025 |
| Buildings | 78% | 89% | 87% | 81% |
| Infrastructure | 22% | 11% | 13% | 19% |
Subsegment revenues
Currently, most of the revenue in the Buildings segment comes from the construction of public and commercial buildings. During the period, revenue generated by the public buildings subsegment increased by around 66% year on year. Revenue from the industrial and warehouse facilities subsegment also increased, although the number of projects in progress remains small. Meanwhile, revenue generated by the commercial buildings and apartment buildings subsegments decreased by around 5% and 56%, respectively.
During the period, the largest projects in the public buildings subsegment were the construction of Tiskre School in the Harku rural municipality, as well as the design and construction of the Loodusmaja (Nature Hub) building and the new Television Building for Estonian Public Broadcasting in Tallinn. Work on projects for the Estonian Centre for Defence Investments continued. The construction of barracks in Tapa was completed.
The largest projects in the commercial buildings subsegment were the construction of a commercial building at Väike-Turu 7 in Tartu, the LEED Gold compliant Uusküla spa hotel on the northern shore of Lake Peipus in the Alutaguse rural municipality, and a spa hotel and a swimming complex in Viljandi.
In the apartment buildings subsegment, the group is not currently carrying out any large-scale construction projects for third parties and the main revenue source is property development. In the first half of 2026, the amount of relevant revenue decreased to €3,549 thousand (H1 2025: €6,781 thousand). During the period, work continued on the construction of phase 2 of the Seileri Kvartal housing estate in Pärnu (https://seileri.ee), the Tammepärja Kodu housing estate in the Tammelinn district of Tartu (https://tammelinn.ee), and the Pärnasalu residential development project on the outskirts of Tartu (https://parnasalutee.ee). When carrying out our own development activities, we carefully monitor potential risks in the housing development market.
| Buildings segment | H1 2026 | H1 2025 | H1 2024 | 2025 |
| Public buildings | 62% | 46% | 68% | 52% |
| Commercial buildings | 32% | 41% | 20% | 39% |
| Apartment buildings | 4% | 12% | 9% | 8% |
| Industrial and warehouse facilities | 2% | 1% | 3% | 1% |
In the first half of 2026, most of the revenue generated by the Infrastructure segment came from road construction and maintenance. Compared to the same period last year, the subsegment’s revenue increased nearly threefold. The largest projects were the construction of the Rail Baltica main line railway infrastructure, including the Hagudi–Alu section of stage III in Rapla County and the Selja–Tootsi section of stage I in Pärnu County, and the construction of the Päädeva–Orgita road section on km 62.2–64.8 of national road no. 4 (E67), Tallinn–Pärnu–Ikla.
| Infrastructure segment | H1 2026 | H1 2025 | H1 2024 | 2025 |
| Road construction and maintenance | 95% | 70% | 93% | 87% |
| Other engineering | 5% | 30% | 7% | 13% |
Order book
At 30 June 2026, the group’s order book (backlog of contracts signed but not yet performed) stood at €324,374 thousand, reflecting a 7% increase year on year. In the first half of the year, we signed new contracts for €181,652 thousand (H1 2025: €172,236 thousand), of which €25,864 thousand in the second quarter (Q2 2025: €60,960 thousand).
| 30 June 2026 | 30 June 2025 | 30 June 2024 | 31 Dec 2025 | |
| Order book (€’000) | 324,374 | 303,914 | 178,799 | 273,060 |
At 30 June 2026, the Buildings and Infrastructure segments accounted for 71% and 29% of the group’s total order book, respectively (30 June 2025: 70% and 30%, respectively). Compared to 30 June 2025, the order book of the Buildings segment grew by 8% and that of the Infrastructure segment by 3%. In the order book of the Buildings segment, the largest contributor is the public buildings subsegment, which accounts for 74% of the total. A major share of the contracts secured by the subsegment have been awarded by the Estonian Centre for Defence Investments. The order book of the Infrastructure segment has grown primarily through large-scale contracts relating to Rail Baltica as well as a contract with the Estonian Transport Administration for the construction of the Päädeva–Orgita and Haimre sections of the Tallinn–Pärnu–Ikla road.
The contracts of the Rail Baltica project and the road construction projects financed by the European Cohesion Fund through the Estonian Transport Administration have revitalised the infrastructure sector. However, this has not fully offset the underfunding of road construction. The overall volume of public investment in building construction has declined. The market continues to be supported mainly by the defence sector. Although there has also been a revival in the private sector, tendering processes often last for months, and projects are sometimes put on hold for years due to high construction costs or a lack of customer interest.
Major contracts secured in the first half of 2026 include:
- Construction of the first building and the related outdoor areas of Park Rae, a logistics and light industrial park in Rae rural municipality, with an approximate cost of €15,800 thousand.
- Construction of a new school building for Helen’s School in Põhja-Tallinn, with an approximate cost of €12,600 thousand.
- Construction of a building and infrastructure for AS Tallinna Vesi at the Ülemiste Water Treatment Plant site in Tallinn, with an approximate cost of €11,800 thousand.
- Construction of supporting infrastructure for the Estonian Centre for Defence Investments in Pärnu County, with an approximate cost of €110,400 thousand.
- Year-round maintenance of national roads in Lääne County in the period 2026–2031, with an approximate cost of €7,900 thousand.
- Year-round maintenance of national roads in Hiiu County in the period 2026–2031, with an approximate cost of €4,000 thousand.
- Reconstruction and extension of Kotka Health Centre at Kotka 12 in Tallinn, with an approximate cost of €4,400 thousand.
Based on the size of the group’s order book and the general outlook for the economy and the construction market, the group’s management team expects business volumes to increase in 2026. In a highly competitive environment, management has avoided taking unjustified risks that could materialise during contract execution and adversely affect the group’s results. Our main focus is on assessing and mitigating the risks arising from market changes, particularly rising input costs. We also prioritise managing fixed costs, increasing productivity, and executing pre-construction and design activities effectively 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 2026 was 453, including 294 engineers and technical professionals (ETP). Compared to the same period last year, the number of employees increased by around 8%.
Average number of employees at group companies (the parent company and the subsidiaries):
| H1 2026 | H1 2025 | H1 2024 | 2025 | |
| ETPs | 294 | 267 | 282 | 275 |
| Workers | 159 | 151 | 148 | 156 |
| Total average | 453 | 418 | 430 | 431 |
The group’s staff costs for the first half of 2026, including all taxes, were €11,051 thousand compared with €9,221 thousand in the first half of 2025. Staff costs grew by roughly 20% year on year due to a general pay rise and an increase in the headcount.
In the first half of 2026, the service fees of the members of the council of Nordecon AS totalled €135 thousand and the related social security charges amounted to €45 thousand (H1 2025: €106 thousand and €35 thousand, respectively).
The service fees of the members of the board of Nordecon AS totalled €290 thousand and the related social security charges amounted to €96 thousand (H1 2025: €281 thousand and €93 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 2026 | H1 2025 | H1 2024 | 2025 | |
| Nominal labour productivity (rolling), (€’000) | 540.7 | 469.7 | 553.9 | 483.3 |
| Change against the comparative period, % | 15.1% | (15.2)% | 13.4% | (6.0)% |
| Nominal labour cost efficiency (rolling), (€) | 10.5 | 8.7 | 11.0 | 9.8 |
| Change against the comparative period, % | 20.7% | (21.3)% | 0.4% | 5.4% |
The group’s labour productivity and labour cost efficiency increased year on year, as revenue growth exceeded the increase in the number of employees and staff costs.
