Merko Ehitus’ half-year revenue totalled EUR 168 million
Merko Ehitus generated revenue of EUR 83 million in the second quarter of 2025 and EUR 168 million in the first half of the year. Net profit for Q2 amounted to EUR 11.2 million, while net profit for the six-month period was EUR 21.7 million. The share of real estate development in revenue and profit increased in the second quarter. Merko launched the construction and sale of 723 new apartments in the first half of the year, most of them in Vilnius, where the real estate market remains active.
“The second quarter results are in line with our expectations with no significant market changes during the quarter. Supported by a more active real estate market, our performance in the real estate development business has improved, accounting for nearly 30% of our half-year sales revenue and with the number of apartments handed over to buyers increasing by almost 85%. In terms of positivity, the Vilnius real estate market continues to outperform Tallinn and Riga significantly. The Estonian real estate market has activated in the second quarter, but time will tell whether this was due to consumers trying to avoid price increases related to the upcoming VAT hike or it signals a real improvement in consumer confidence,” said Ivo Volkov, Chairman of the Management Board of Merko Ehitus.
“Volumes in the construction market remain low-side and competition is very tight across all our home markets. Our construction contracts portfolio increased by EUR 223 million euros in the first half of the year, which is remarkable considering market situation. We expect the public sector with its infrastructure and defence-related projects, as well as large energy companies, to continue to be the biggest buyers in Estonia, Latvia, and Lithuania in the upcoming few years,” added Volkov, commenting on the construction services sales results.
The largest construction contracts signed in Q2 were the Ülemiste terminal in Tallinn (worth EUR 84.8 million) and the Rail Baltica mainline section between Tallinn and Pärnu (expected to be worth approximately EUR 75 million to Merko as part of the consortium). At the end of Q2, the balance of secured order-book for external clients stood at EUR 444 million. In addition, internal construction contracts related to Merko’s residential development projects amounted to EUR 222 million.
During the first half of 2025, Merko handed over 222 apartments and two commercial units to buyers in Estonia, Latvia, and Lithuania. In the first six months, Merko launched the construction and sale of 723 new apartments and 21 commercial premises, including 530 apartments and 15 commercial premises in the new Šnipiškių Urban project and the next stage of the Vilnelės Skverai development in Vilnius. As of the end of Q2, Merko’s balance sheet included 1,134 apartments, of which 17% were covered by pre-sale agreements. Merko’s largest ongoing development projects included Uus-Veerenni, Noblessner, and Lahekalda in Tallinn; Õielehe in Jüri township; and Erminurme in Tartu; Lucavsala, Arena Garden Towers, Viesturdārzs, Mežpilsēta, and Magnolijas in Riga; and Vilnelės Skverai and Šnipiškių Urban in Vilnius.
The major construction sites in Q2 2025 in Estonia included the Hyatt hotel building, Hobby Center Kullo, and the City Plaza 2 office building in Tallinn, as well as the national defence building in Tartu, the Rail Baltica Ülemiste passenger terminal and fourth stage of the Rail Baltica mainline. In Lithuania, the largest sites were infrastructure projects for wind farms in the Pagėgiai, Telšiai, and Pasvalys regions, along with various defence buildings and infrastructure. In Latvia, larger construction projects included a solar power plant in Vārme Municipality and a student hotel in Riga.