Audited Annual Report 2025

(MENAFN- GlobeNewsWire - Nasdaq) 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 merko ). 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
+372 650 1250
...

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.

Attachments

• 2025 Executive Summary
• 2025 Merko Ehitus annual report

MENAFN06042026004107003653ID1110945377