Merko Ehitus Reports 42% Revenue Drop in 2025 Amid Shifting Market Dynamics
Event summary
- Merko Ehitus reported a 42% year-over-year revenue decline to EUR 311 million in 2025, with Q4 revenue at EUR 69 million.
- Net profit fell to EUR 39.9 million from EUR 64.7 million in 2024, though pre-tax profit margin remained stable at 14.4%.
- The company's secured order book grew to EUR 467 million, with new contracts signed in 2025 totaling EUR 363 million.
- Real estate development played a larger role in 2025 results, with 358 apartments delivered and 894 new units launched.
- Management proposed a dividend of 1.25 euros per share, equivalent to a 55% payout ratio.
The big picture
Merko Ehitus's 2025 results reflect a normalization after strong 2024 performance, with real estate development becoming a more significant revenue driver. The company's strategic focus on large-scale infrastructure projects, particularly in defense and rail, positions it in growing but highly competitive sectors. The negative net debt and solid financial position provide a buffer, but the challenge lies in maintaining profitability amid margin pressures.
What we're watching
- Market Demand
- Whether improving consumer confidence will sustain real estate market growth amid cautious private-sector clients.
- Order Book Execution
- The pace at which Merko can convert its historically high EUR 800 million order book into revenue.
- Profitability Pressures
- How the company will manage margins in a highly concentrated market with strong tender competition.
Related topics