AS Merko Ehitus: A Strong Quarter and Strategic Moves

In the dynamic world of construction and real estate, AS Merko Ehitus has made significant strides in the first quarter of 2025. The company, a prominent player in the construction and engineering sector, has reported robust financial performance and strategic developments that underscore its growth trajectory.

Financial Highlights

In its 2025 Q1 consolidated unaudited interim report, AS Merko Ehitus posted impressive revenue of EUR 85.2 million, with a net profit of EUR 10.5 million. A notable highlight is the substantial growth in the real estate development segment, which accounted for 30% of the group’s Q1 revenue. This segment more than doubled compared to the same period last year, driven by increased activity in the Lithuanian real estate market and the successful completion of several projects ahead of schedule.

The company’s strong performance is reflected in its financial metrics, with a close price of EUR 30 as of May 14, 2025, and a market capitalization of EUR 492.94 million. The price-to-earnings ratio stands at 7.62, indicating a favorable valuation in the market.

Strategic Developments

AS Merko Ehitus has also made significant strategic moves, particularly in its construction projects. On May 16, 2025, the company, through its subsidiary AS Merko Ehitus Eesti, signed a design and construction contract for the Rail Baltica main line Tallinn-Pärnu section. This contract, executed under an alliance procurement model, involves collaboration with several partners, including GRK Eesti AS, GRK Suomi Oy, NGE Contracting, Sweco Finland Oy, Sweco Sverige AB, and TSO SAS. The project, which includes the construction of a 142 km railway route, highlights the company’s expertise in large-scale infrastructure projects.

Shareholder Confidence

The annual general meeting held on May 15, 2025, further reinforced shareholder confidence in the company’s direction. The meeting approved the annual report for 2024 and decided on a profit distribution strategy. The net profit for 2024 was approved at EUR 64.67 million, with a dividend payout of EUR 33.63 million, equating to 1.90 euros per share. This payout represents 52% of the net profit, aligning with the company’s long-term dividend policy of distributing 50-70% of the previous year’s net profit.

Looking Ahead

AS Merko Ehitus continues to demonstrate its capability to navigate the complexities of the construction and real estate sectors. With a strong financial performance, strategic project engagements, and a clear dividend policy, the company is well-positioned for sustained growth. As it expands its footprint across Estonia, Latvia, Lithuania, Norway, and Finland, AS Merko Ehitus remains a key player in shaping the infrastructure and real estate landscapes of these regions.