Merko Ehitus reports higher sales revenue and net profit in Q2
AS Merko Ehitus’s revenue in the second quarter was EUR 65.9 million and six-month revenue EUR 113.7 million in 2013, representing an increase of 11.5% and 6.4%, respectively, compared with the same period in the previous year. Net profit in the second quarter was EUR 2.3 million and net profit for the first six months of 2013 was EUR 4.0 million, compared to EUR 0.4 million and EUR 0.6 million for the same respective periods in the previous year.
“The consolidated results of Merko companies in the second quarter met our expectations for both revenue and net profit. It’s important for us that close to 50% in monetary terms of the new construction contracts signed during this year is related to private customers – compared to the situation a year ago, the situation on the market has improved greatly in this regard. We can’t project that growth will continue at the same rate, but we are working with the goal of maintaining and reinforcing our position on the private customer market,” said the chairman of the AS Merko Ehitus management board, Andres Trink.
Trink said there is currently close competition in price when it comes to landing new contracts on the construction market, and that this cuts into profitability and poses a major challenge to maintaining the same gross margin in bidding for contracts. The gross margin in the second quarter was 8.5% and the six-month figure was 8.6%; both close to a 4% improvement over last year.
“A positive aspect is the good results in the Estonian road construction sector in the first half-year and thanks to the improved activity on the apartment market, we were able to sell apartments in the planned volume in Tallinn, Riga as well as Vilnius. Considering the positive developments on the apartment market, we see possibilities for launching new development projects in the next 12 months in the capitals of all three Baltic states,” said Andres Trink.
In the first six months of 2013, 94 apartments were sold for a total value of EUR 10.8 million (not including VAT) compared to figures of 67 apartments and EUR 8 million in the same period last year.
The largest sites in progress for the company during the second quarter were the renovation of the Mustamäe blocks of the North Estonia Medical Centre, first phase of the second construction phase of the KTN Tallinn Logistics Centre and the construction of the Tondiraba ice rink. In addition, renovating of pipes in Vääna-Jõesuu and closure of the Kohtla-Järve industrial waste and semi-coke dump continued. As the largest site in the field of road construction, construction of the Ülemiste junction – slated for completion in late 2013 – will continue. In the second quarter, the construction of the Kentmanni 6 residential and office building in Tallinn was re-launched and new development projects in Riga’s Skanste district and on Mokslininku street in Vilnius were commenced.