Audited Annual Report 2023


(MENAFN- GlobeNewsWire - Nasdaq) AS Merko Ehitus consolidated audited financial results for 2023 remain unchanged compared to the preliminary disclosure on 8 February 2024.

STATEMENT OF THE CHAIRMAN OF THE MANAGEMENT BOARD

Like past years and, surely, years to come, 2023 was anything but dull for Merko. The changing market and economic conditions are constantly forcing us to think on our feet. Fortunately, there is no question that our people are up to the challenge. Indeed, we have successfully implemented the decisions we have needed to make. The results for 2023 attest to this, as can be seen from the figures in this report.

Our performance in the year ended was made possible by fact that several important factors coincided. We had the capacity to launch major construction sites, and we also capitalized on the success of our real estate developments of the past few years. In 2023, we delivered about 1000 new homes and commercial units to our customers. Building a contemporary living environment and high-quality homes remains a priority for us. Since the real estate market will remain unstable in the near future and the pace of apartment sales is low, we are steering our developments at a pace and volume that corresponds to the new market situation.

In the near future, we will again focus more on construction service. Our portfolio of work is in about as good condition as can be in today's turbulent world, counterbalancing the negative impact on our construction volumes and sales from the apartment market slump. In 2023, the group companies entered into EUR 501 million in new construction contracts, and as of the end of the year, the balance of secured order-book stood at EUR 477 million, an increase of about 60% compared to 2022.

In terms of giving back to society, we are continuing to contribute to healthy life years by developing places for physical activity. We support culture and art, make cities and towns richer through public art and parkland, and support those in need. We are also helping train a new generation of professionals and are proud of the fact that Merko is Estonia's most attractive employer in the eyes of university students in engineering specialities.

Merko's success hinges on its people. We take our hats off to you, just as we salute Merko apartment buyers, construction service customers, partners and shareholders who has put their trust in us. The project we have completed in collaboration between many professionals have won acclaim in Estonia, Latvia and Lithuania. Among other honours, Merko's Merks Viesturdarzs apartment development won the title of the Best Building of the Year in Latvia in the new homes category. Vilnelės Skverai was declared Lithuania's best residential project at the Sustainable Development 23 competition. Attesting to our good work, Estonian apartment buyers considered Merko the best-known and most prestigious real estate developer for another straight year.

Thanks to our hallmarks – good decisions and quality work – we are in good financial health and our outlook for the future is positive. We plan to focus on our strengths, manage risks and operate using the best available knowledge. We take a measured approach and constantly re-assess the situation as we go, designing a better living environment and building the future.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
in thousand euros

2023 2022
Revenue 466,304 409,633
Cost of goods sold (401,267) (355,975)
Gross profit 65,037 53,658
Marketing expenses (4,312) (4,077)
General and administrative expenses (19,423) (15,860)
Other operating income 4,171 3,144
Other operating expenses (991) (1,834)
Operating profit 44,482 35,031
Finance income 297 1
Finance costs (3,017) (1,450)
Profit from joint ventures 10,220 3,516
Profit before tax 51,982 37,098
Corporate income tax expense (6,081) (2,995)
Net profit for financial year 45,901 34,103
incl. net profit attributable to equity holders of the parent 46,048 34,640
net profit attributable to non-controlling interest (147) (537)
Other comprehensive income (loss), which can subsequently be classified in the income statement
Currency translation differences of foreign entities (41) 30
Comprehensive income for the period 45,860 34,133
incl. attributable to equity holders of the parent 45,993 34,648
attributable to non-controlling interest (133) (515)
Earnings per share for profit attributable to equity holders of the parent (basic and diluted, in EUR) 2.60 1.96

CONSOLIDATED STATEMENT OF FINANCIAL POSITION
in thousand euros

31.12.2023 31.12.2022
ASSETS
Current assets
Cash and cash equivalents 77,330 17,665
Trade and other receivables 68,754 77,959
Prepaid corporate income tax 2 38
Inventories 195,435 225,661
341,521 321,323
Non-current assets
Investments in associates and joint ventures 21,915 12,895
Other shares and securities 80 -
Other long-term loans and receivables 24,490 22,982
Deferred income tax assets 3,298 693
Investment property 16,823 11,485
Property, plant and equipment 16,613 17,452
Intangible assets 520 582
83,739 66,089
TOTAL ASSETS 425,260 387,412
LIABILITIES
Current liabilities
Borrowings 19,673 49,687
Payables and prepayments 133,898 96,248
Income tax liability 4,260 1,241
Short-term provisions 10,451 9,820
168,282 156,996
Non-current liabilities
Long-term borrowings 35,142 42,236
Deferred income tax liability 4,441 2,355
Other long-term payables 5,495 2,133
45,078 46,724
TOTAL LIABILITIES 213,360 203,720
EQUITY
Non-controlling interests (155) (495)
Equity attributable to equity holders of the parent
Share capital 7,929 7,929
Statutory reserve capital 793 793
Currency translation differences (838) (783)
Retained earnings 204,171 176,248
212,055 184,187
TOTAL EQUITY 211,900 183,692
TOTAL LIABILITIES AND EQUITY 425,260 387,412

A copy of AS Merko Ehitus audited annual report for 2023 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 generated only in Estonian language.

Ivo Volkov
Chairman of Management Board
AS Merko Ehitus
+372 650 1250
...

AS Merko Ehitus ( ) group companies develop real estate and construct buildings and infrastructure. We create a better living environment and build the future. We operate in Estonia, Latvia, Lithuania and Norway. As at the end of 2023, the group employed 635 people, and the group's revenue for 2023 was EUR 466 million.

Attachment

  • 2023 Merko Ehitus annual report

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