Baltic, Construction, Estonia, Good for Business, Real Estate

The fourth quarter 2014 sales revenue of Merko Ehitus was EUR 70.1 million, with a figure of EUR 252.3 million for the financial year.

The Management Board of AS Merko Ehitus proposes that the shareholders be paid 0.41 euros per share in dividends from retained earnings of previous periods and to reduce the share capital by 0.23 euros per share in 2015.

In 2014, Merko earned 32% of its sales revenue from outside Estonia – Lithuanian sales doubled and Latvian sales increased by more than half compared to 2013. Merko sold 395 apartments in 2014 – 132 apartments more than the year before – as a result of which sales revenue in the real estate development segment increased by 48%.

Merko said it be satisfied with the 2014 results, which were achieved in what continues to be a complicated market situation. Above all, improved profit figures, growth in Latvia and Lithuania and apartment sales in Estonia are reason to cheer. As expected, the decline in construction volumes in the engineering and road construction sectors continued, due to the decreased amount of EU-funded projects, even though the profitability of these segments exceeded our expectations.

2015 will be a difficult year in terms of public sector orders, a certain pickup can be expected starting in 2016. The overall weak economic growth and low investor confidence in the Baltic states and the region also leaves an imprint on the construction market. Merko sees growth opportunities opening up in 2015 mainly on the Lithuanian construction market, and also in apartment development, where it plans to invest about EUR 45-55 million in the coming year. The volume of orders will presumably not decline in electrical construction either, which is an important sector.

In the fourth quarter, group companies signed new agreements worth EUR 62.9 million and the volume of new contracts in 2014 totalled at EUR 170.4 million. As of 31 December 2014, the group had a secured order book balance of EUR 179.1 million.

In 2014, Merko sold 395 apartments with a total price of EUR 39.4 million; including 160 apartments worth EUR 16.0 million in Q4 (both figures exclusive of VAT).