Audited annual report 2025
AS Merko Ehitus consolidated audited financial results for 2025 remain unchanged compared to the preliminary disclosure on 5 February 2026.
STATEMENT OF THE CHAIRMAN OF THE MANAGEMENT BOARD
Dear shareholders and readers,
We have left behind another rather uncertain year, similar to few recent ones. A year ago, we cautiously hoped for some clarification of the situation in the world, but we must admit that this expectation did not materialise – global politics has only added to the uncertainty. This has also affected Merko’s workload in both construction services and real estate development during the period under review.
In 2024, we were engaged in several large projects that had been started in earlier years, and these were completed as planned during 2025. The pace of signing new contracts was slower in 2024 and in the first half of 2025. However, the second half of 2025 showed a clear improvement, and preparatory efforts resulted in new major contracts. The most extensive and thorough preparation was carried out by our Lithuanian colleagues and in the first days of the current year resulted in the signing of the largest contracts in Merko’s history for the construction of two lots of the Rūdninkai defence campus. Given their scale and nature, these contracts will begin to contribute to revenue gradually in 2026 and onwards.
High global turbulence continues to restrain investments, particularly private investments. At present, most major investments are made mainly by the public sector, largely in defence and infrastructure, for understandable reasons. Investments in the energy sector, especially in renewable energy, have declined compared to the previous period.
In times of change, flexibility becomes especially important, and we have adapted our business models accordingly. Alongside the successful real estate development partnership in the Noblessner area of Tallinn, we signed two similar cooperation agreements in 2025 for the development of the Krulli quarter in Tallinn and the Uus-Karlowa quarter in Tartu. The Rūdninkai project marks a significant expansion of our PPP business Lithuania and will provide the company with a stable workload for years ahead. A strategic decision made several years ago to invest in network companies operating under the Connecto brand has also clearly proven its value. In recent years, Connecto companies have substantially expanded their operations in Latvia and Lithuania, and in 2025 this investment in the joint venture accounted for as much as one quarter of Merko’s consolidated net profit.
Alongside the continued high level of consumer confidence in Lithuania, situation has also improved in Estonia and Latvia. As a result, in 2025 we were able to start construction of more than three times as many new apartments as in 2024. This creates strong potential for real estate development results in 2026 and the years ahead, particularly as the pace of signing pre‑sales agreements has also increased.
Our companies, projects, and employees received numerous recognitions during the year. The most notable honours were awarded to Saulius Putrimas, Head of Merko Lithuania, who was named CEO of the Year 2025 by a leading Lithuanian business newspaper, and to Estonian Project Director Ahti Suppi, who received the prestigious “Builder of the Year” title in Estonia. We are also pleased that our contribution to the cultural sector has been recognised alongside our other social initiatives, with the Estonian Ministry of Culture awarding Merko the title of Culture Friend of the Year.
Our sincere thanks to all Merko employees, whose shared commitment once again made it possible to conclude a successful year. We thank homebuyers for their continued trust in the Merko brand. Our appreciation also goes to our clients and partners, whose cooperation enables us to create high‑quality and well‑designed homes, buildings, and infrastructure.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
in thousand euros
| 2025 | 2024 | |
| Revenue | 310,941 | 539,049 |
| Cost of goods sold | (255,081) | (443,162) |
| Gross profit | 55,860 | 95,887 |
| Marketing expenses | (5,823) | (5,030) |
| General and administrative expenses | (17,478) | (21,908) |
| Other operating income | 2,285 | 5,724 |
| Other operating expenses | (501) | (2,190) |
| Operating profit | 34,343 | 72,483 |
| Finance income | 1,208 | 2,017 |
| Finance costs | (1,164) | (2,950) |
| Loss from investments in subsidiaries | - | (5,087) |
| Profit from joint ventures | 10,381 | 9,951 |
| Profit before tax | 44,768 | 76,414 |
| Corporate income tax expense | (4,850) | (11,820) |
| Net profit for financial year | 39,918 | 64,594 |
| incl. net profit attributable to equity holders of the parent | 39,918 | 64,668 |
| net profit attributable to non-controlling interest | - | (74) |
| Other comprehensive income (loss), which can subsequently be classified in the income statement | ||
| Currency translation differences of foreign entities | 20 | 105 |
| Comprehensive income for the period | 39,938 | 64,699 |
| incl. attributable to equity holders of the parent | 39,938 | 64,764 |
| attributable to non-controlling interest | - | (65) |
| Earnings per share for profit attributable to equity holders of the parent (basic and diluted, in EUR) | 2.26 | 3.65 |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
in thousand euros
| 31.12.2025 | 31.12.2024 | |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 41,424 | 91,879 |
| Short-term deposits | 18,000 | 10,000 |
| Trade and other receivables | 43,658 | 51,419 |
| Prepaid corporate income tax | 1,347 | 270 |
| Inventories | 219,812 | 196,521 |
| 324,241 | 350,089 | |
| Non-current assets | ||
| Investments in joint ventures | 31,957 | 21,571 |
| Other shares and securities | 80 | 80 |
| Other long-term loans and receivables | 20,658 | 40,196 |
| Deferred income tax assets | 2,874 | 5,056 |
| Investment property | 12,395 | 12,606 |
| Property, plant and equipment | 22,117 | 17,147 |
| Intangible assets | 714 | 350 |
| 90,795 | 97,006 | |
| TOTAL ASSETS | 415,036 | 447,095 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 3,079 | 21,303 |
| Payables and prepayments | 95,920 | 129,786 |
| Income tax liability | 510 | 7,101 |
| Deferred income from government grant | 2 | - |
| Short-term provisions | 10,426 | 7,678 |
| 109,937 | 165,868 | |
| Non-current liabilities | ||
| Long-term borrowings | 30,012 | 12,102 |
| Deferred income tax liability | 7,448 | 6,148 |
| Other long-term payables | 7,073 | 8,719 |
| 44,533 | 26,969 | |
| TOTAL LIABILITIES | 154,470 | 192,837 |
| EQUITY | ||
| Equity attributable to equity holders of the parent | ||
| Share capital | 7,929 | 7,929 |
| Statutory reserve capital | 793 | 793 |
| Currency translation differences | (21) | (41) |
| Retained earnings | 251,865 | 245,577 |
| 260,566 | 254,258 | |
| TOTAL LIABILITIES AND EQUITY | 415,036 | 447,095 |
A copy of AS Merko Ehitus audited annual report for 2025 is attached to the announcement and is also published on NASDAQ Tallinn and Merko’s web page (). The ESEF-compliant machine-readable annual report is prepared only in Estonian language.
Ivo Volkov
Chairman of Management Board
AS Merko Ehitus
+372 650 1250
Urmas Somelar
Head of Finance
AS Merko Ehitus
AS Merko Ehitus () group companies construct buildings and infrastructure and develop real estate. We create a better living environment and build the future. We operate in Estonia, Latvia and Lithuania. As at the end of 2025, the group employed 613 people, and the group’s revenue for 2025 was EUR 311 million.
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