Merko Ehitus (MRK1T) Q4 2024 earnings summary

Executive summary

• Revenue for 2024 reached EUR 539.0 million, up 15.6% year-over-year; net profit was EUR 64.7 million, a 40.7% increase from 2023.

• Construction services accounted for 88% of revenue, with Lithuania contributing 53% of total sales.

• The group maintained a strong financial position with negative net debt and a cash balance of EUR 91.9 million at year-end.

• Management proposes a dividend of EUR 1.90 per share (52% payout ratio) for 2024.

Financial highlights

• Q4 2024 revenue was EUR 160.4 million (Q4 2023: EUR 126.5 million); Q4 net profit was EUR 19.9 million (Q4 2023: EUR 13.9 million).

• Gross profit margin for 2024 was 17.8% (2023: 13.9%); operating profit margin rose to 13.4% (2023: 9.5%).

• EBITDA for 2024 was EUR 75.7 million (2023: EUR 48.1 million), with an EBITDA margin of 14.0%.

• Return on equity improved to 28.4% (2023: 23.4%); equity ratio increased to 56.9%.

• Secured order book at year-end was EUR 340.6 million, down 28.7% from 2023.

Outlook and guidance

• Upward price pressures in construction are expected to persist into H1 2025, mainly from workforce costs.

• Modest growth is forecast for the Baltic construction market in H1 2025, driven by public sector and renewable energy investments.

• Real estate prices are expected to remain stable in H1 2025, with market activity influenced by new taxes and building permits.

• Lithuania is expected to outperform Estonia and Latvia in construction and real estate activity.