Merko Ehitus annual net profit grows 36%, proposal to pay dividends of EUR 0.41 per share
Merko Ehitus’s revenue in 2013 was EUR 262.7 million and net profit was EUR 10.4 million, representing an increase of 5.5% and 36.3%, respectively, compared with the same period in the previous year. The management board proposes to pay dividends of EUR 7.26 million – i.e. EUR 0.41 per share – which results in a dividend rate of 70% for 2013.
Q4 revenue was EUR 64.9 million and net profit EUR 2.5 million, which was under last year’s levels above all due to the results in the general construction segment. In the fourth quarter, the group companies concluded new contracts worth a total of EUR 48.6 million and as of the end of the year, the secured order book balance stood at EUR 213.7 million.
“We are pleased that in a complicated market situation, we were able to improve our results and grow our profit. Factors that contributed included engineering projects finished ahead of time, a more active market for private orders and apartments, new construction contracts and improved market position in Latvia. Our goal continues to be to offer our customers flexible and high-quality solutions both in terms of smaller and more complicated engineering and technical projects,” said Andres Trink, Chairman of the Management Board of AS Merko Ehitus.
The greatest construction volumes in 2013 were seen in the civil engineering works, but the launching of projects by private sector has also picked up – close to one-half of the contracts signed were related to private contracting entities. Government contracts showed a decreasing trend during the year, especially in regard to external networks. The growth of revenue compared to last year was achieved primarily thanks to the general construction segment (+40.3%), real estate development (+14.3%) and road construction (+9.6%). Engineering construction segment revenue decreased by 16.6% compared to last year above all due to the end of the EU’s budget period and a corresponding drop in the volume of large projects financed by EU structural funds.
„In summary of the year, the general construction segment was cause for disappointment, where strong pressure on margins leads to greater risks, which we were not able to mitigate completely and which materialized above all in the case of one site in progress. Our subsidiaries are applying measures with the goal of avoiding similar project management risks and losses in future,” said Andres Trink.
During 2013, Merko sold a total of 263 apartments with a total value of EUR 28.3 million (not including VAT), which exceeds last year’s result (235 apartments and EUR 25.0 million). As of the end of the year, the group had 300 apartments on sale, of which 36 were finished and 264 were under construction. In 2013, the group launched the construction of 409 apartments in the Baltics, which is approximately 100 more than last year.
In the fourth quarter, the largest projects in progress in Latvia were the Polipaks NT manufacturing and logistics centre in Marupe and a multifunctional concert centre in Liepaja; in Estonia, the North Estonia Medical Centre Mustamäe block renovation, Tondiraba ice arena construction and renovations of water and sewerage systems in Vääna-Jõesuu and Narva-Jõesuu as well as the closure of the industrial waste and semi-coke dump in Kohtla-Järve.
In the fourth quarter, Merko Ehitus concluded new construction contracts in the amount of EUR 48.6 million, compared to EUR 49.4 million last year. The biggest contracts of the last quarter concerned the performance of repair and maintenance of the streets and roads in Tallinn, a school complex in Valmiera and the construction of the apartment building at Dzintaru 28, Jurmala. As of 31 December 2013, the group’s secured order book balance stood at EUR 213.7 million (31 December 2012: EUR 189.9 million), which does not include its own residential development projects and work related to development of investment property.