Merko Ehitus posts 9 months revenue of EUR 242 million
Merko Ehitus generated revenue of EUR 74 million in the third quarter of 2025 and EUR 242 million in the first 9 months of the year. Net profit for Q3 amounted to EUR 15.0 million, while net profit for the 9-month period was EUR 36.7 million. At the end of the third quarter, the group’s construction services portfolio was at an all-time high. So far this year, Merko has handed over 55% more apartments and commercial premises to buyers than in the first nine months of last year.
“In the third quarter, some of the most significant construction projects in recent times and the largest in Merko’s history were completed – the Arter quarter together with the interior works of the Swedbank headquarters in Tallinn and the Pabradė defence campus in Lithuania. As a result, we are returning to our more usual revenue structure. During the first nine months of this year, the share of real estate development increased and accounted for more than a quarter of sales revenue. Consequently, the operating profit margin has also improved,” commented Ivo Volkov, Chairman of the Management Board of Merko Ehitus.
“The real estate market remains most active in Lithuania, while year-on-year conditions have improved in Estonia, and Latvia continues on a slightly upward trend. The market recovery is well illustrated by the fact that, in a nine-month comparison, we have handed over more than 55% more apartments and commercial units to buyers. The volume of apartments under construction and completed has slightly decreased compared to the end of the second quarter of this year, and half of them are located in Vilnius, which has the most active market. We continue to forecast real estate market developments hand in hand with changes in consumer confidence,” commented Ivo Volkov on the results in the real estate sector.
“In the construction market, there are few tenders and mostly they involve large-scale works. Competition remains extremely intense and, as a result, service margins are low. This year and last year, we have signed several large-scale contracts related to the construction of Rail Baltica, including Estonia’s largest alliance contract as part of an international consortium. Due to the nature of these contracts, where a significant amount of time is spent on design, actual construction will begin in the coming quarters and will be reflected in our sales revenue accordingly. The volume of unfinished construction work in the group is at a historical high,” commented Ivo Volkov on the construction services business area.
“The group’s financial position is strong, and net debt is negative. Joint ventures involved in the construction and maintenance of energy infrastructure, Connecto Infra and Connecto Eesti, continue to contribute strongly to the results. For Merko, these are financial investments, and the revenue of these companies is not reflected in Merko’s consolidated sales revenue. Connecto has a high volume of work due to significant investments directed into the sector, but many large-scale projects in this sector are also nearing completion, and network operators’ investment plans are expected to decline in the foreseeable future,” added Ivo Volkov.
In the first nine months of 2025, Merko signed new construction contracts worth EUR 323 million, the largest of which were the Rail Baltica Ülemiste terminal in Tallinn, the Rail Baltica mainline section from Tallinn to Pärnu, a hotel and event centre in Pärnu, and the construction of foundations and infrastructure for the Augstkalni wind farm in Latvia. As of the end of the third quarter, the balance of secured order-book for external clients amounted to EUR 486 million, in addition to internal construction contracts related to Merko’s residential development projects worth EUR 215 million.
During the nine months of 2025, Merko handed over 315 apartments and three commercial units to buyers in Estonia, Latvia, and Lithuania. In the same period, Merko started the construction and sale of 771 new apartments and 21 commercial units, nearly two-thirds of them in the Šnipiškių Urban and Vilnelės Skverai projects in Vilnius. As of the end of the third quarter, the balance sheet included 1,089 apartments, of which 19% were covered by pre-sale agreements. The largest ongoing development projects were Uus-Veerenni, Noblessner and Lahekalda in Tallinn, Õielehe in Jüri, and Erminurme in Tartu; Lucavsala, Arena Garden Towers and Mežpilsēta in Riga; and Vilnelės Skverai and Šnipiškių Urban in Vilnius.
In the third quarter of 2025, the largest construction sites were the Hyatt hotel building, the Kullo Hobby Centre and the City Plaza 2 office building in Tallinn, the National Defence Building in Tartu, and the hotel and event centre in Pärnu, the Rail Baltica Ülemiste joint terminal, and the fourth stage of the Rail Baltica mainline in Harju County and the Tallinn-Pärnu section. In Lithuania, the largest construction sites were wind farm infrastructure in the Pagėgiai, Telšiai and Pasvalys regions, as well as various national defence buildings and infrastructure. In Latvia, construction is underway on a solar power plant in Vārme Parish, a student hotel in Riga, and infrastructure in Augstkalni wind farm.