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International Internet Magazine. Baltic States news & analytics Monday, 16.07.2018, 01:57

Merko's Q2 revenue rose by 20%

BC, Tallinn, 10.08.2017.Print version
Revenue of the listed Estonian construction group Merko Ehitus totaled 70.7 million euros in the second quarter of 2017, marking an increase of 20% over the second quarter of the previous year, while profit climbed 28% to 2.2 million euros, informs LETA/BNS.

Sales revenue in the first six months of the year totaled 128.8 million euros, while net profit amounted to 3.2 million euros, the company told the stock exchange. This year, the group has increased its secured order book, above all in Latvia. In the first six months of 2017 Merko has sold 80 apartments more than at the same time last year and increased its sales revenue from the sale of apartments by 54%.


"Sales revenue and profit in the second quarter showed the expected growth compared to 2016 and. It is gratifying to see that sales revenue increased on all of the group's home markets. This year, the group has increased its secured order book, above all in Latvia, where we have launched construction on several major projects. As a result, the number of the Latvian company's employees has grown. Competition between general contractors continues to be very close in all of the countries in which we operate. Furthermore, the availability of workforce and stability of suppliers is becoming increasingly complicated, which in the assessment of the management puts general contractors under pressure with regard to profit margins and deadlines and forces a search for solutions," AS Merko Ehitus CEO Andres Trink said.


"Apartment sales have proceeded according to expectations. Compared to the same period last year, Merko Ehitus sold 50% more apartments in the first six months of this year and earned 54% more sales revenue. A contributing factor was the simultaneous completion and sales of several projects at the same time in the first half-year. The apartment market in Tallinn and Vilnius continues to be active, even though it appeared that the price ceiling has been reached, and in future, somewhat longer sales periods in some development projects can be expected. The Riga apartment market has not built up the same momentum yet," Trink said.


Merko in the second quarter sold 98 and in the first six months of the year 239 apartments with a revenue of 10.5 million euros and 26.9 million euros, respectively. In the first six months of this year Merko has launched the construction of 385 apartments and invested 18.4 million euros in new development projects launched in 2017 as well as projects already in progress.


The group's sales revenue in the second quarter of this year was 70.7 million euros, earnings before interest, taxes, depreciation and amortization (EBITDA) totaled 4.1 million euros, profit before tax amounted to 3.3 million euros and net profit to 2.2 million euros. Merko's sales revenue in the first six months of 2017 was 128.8 million euros, EBITDA totaled 6.0 million euros, profit before tax amounted to 4.4 million euros and net profit to 3.2 million euros. In the second quarter the company signed new contracts in the amount of 158 million euros, including the construction of the Akropole multifunctional center and the Z-Towers complex in Riga and the extension of the air traffic control center in Tallinn.


As at June 30, 2017, the group's secured order book had grown to 387.5 million euros compared to the 279.4 million euros at the same time the year before. Among the major projects in progress in Estonia in the second quarter were the T1 shopping center, the Maakri Quarter,  Opiku office building B, and the tram line that will serve the airport. In Latvia, the biggest projects in progress were the Akropole multifunctional center in Riga and the Ventspils music school and concert hall. In Lithuania, the largest project included the Radisson Blu Hotel Lietuva, the Philip Morris plant and a hotel and residential building complex in the Rinktines Urban development project.

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