Construction, Estonia, Markets and Companies, Real Estate
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Friday, 26.04.2024, 22:14
H1 profit of Estonia's Merko Ehitus decline
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According
to the company, the main reason behind the decline is the general slump in the
orders of new buildings and infrastructure construction.
Revenue
in the second quarter declined nearly 17% to 58.7 mln euros. At the same time
the quarter's net profit rose nearly 11% to 1.8 mln euros. The gross profit
margin increased to 9% and the group's construction contract order book reached
279 mln euros, unaudited results of the company show.
The
group's management is satisfied with the improved profitability – the second quarter
gross profit margin of 9% outperforms the expectations to some degree and is
better than it was a year ago. Considering the general depressing state of
construction contracts on the market, the management also appreciates the volume
of new contracts signed in the second quarter and the level of the secured
order book, chairman of the company's board Andres Trink said.
According
to Trink, Merko's sales revenue has
been negatively effected by the slower than planned launch of construction work
on several projects due to customer-side changes either related to the project
design solutions or the completion timetable.
In
addition, the ratio of new contracts to sales revenue was also lower than
expected as a result of the sluggish Baltic construction market in regard to
buildings and infrastructure contracted for by the state – a trend that has
lasted a couple of years now.
"The
construction market is largely supported by residential construction, yet the
group's companies are actively continuing to tender for contracts on all
markets in which the group operates, including road construction and other
infrastructure project procurements in Estonia," Trink said.
This
year the company has started the construction of more than 280 new apartments.
In the first six months the company sold 159 apartments for the total cost of
17.4 mln euros and in the second quarter it sold 58 apartments for a total of 6
mln euros, exclusive of VAT.
In
the second quarter the group's companies entered into new construction
contracts worth a total of 87 mln euros.
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