OREANDA-NEWS. Overview of the 9 months and Q3 results

Profitability: net profit in 9M 2013 was EUR 7.9 million (9M 2012: EUR 3.2 million) and net profit in Q3 was EUR 3.9 million (Q3 2012: EUR 2.6 million).

Revenue has increased: 9M 2013 revenue was EUR 197.8 million (9M 2012: EUR 177.7 million). Revenue in Q3 was EUR 84.1 million (Q3 2012: EUR 70.9 million), which has increased 18.7% compared to the same period last year.

Strong cash position: by the end of the reporting period, the group had EUR 39.1 million in cash and cash equivalents and equity EUR 119.4 million (48.1% of total assets). Comparable figures in 2012 were accordingly EUR 15.5 million and EUR 112.5 million (47.9% of total assets).

Secured order book is stable: In Q3 2013, EUR 109.8 million worth of new contracts were signed (Q3 2012: EUR 32.4 million) and as at 30 September 2013, the group's secured order book amounted to EUR 218.1 million (30 September 2012: EUR 199.5 million).

AS Merko Ehitus is a holding company incorporating construction and real estate development companies offering integrated construction solutions in Estonia, Latvia and Lithuania. Major construction companies incorporated under the holding company include AS Merko Ehitus Eesti (100%), SIA Merks (100%), UAB Merko Statyba (100%), as well as the AS Merko Ehitus Eesti group companies Tallinna Teede AS (100%) and AS Merko Infra (100%).

The main activity of the holding company is development and implementation of the strategies of Merko Ehitus group's separate business areas primarily through long-term planning of resources. The Management Board of the holding company AS Merko Ehitus has two members: Andres Trink and Tonu Toomik.

Annual General Meeting and changes in the management structure of AS Merko Ehitus

The general meeting of the shareholders was held on 5 June 2013. The general meeting resolved to approve the annual report and the profit allocation proposal for 2012. Pursuant to the profit allocation proposal, a dividend payable of EUR 5.3 million (EUR 0.3 per share) was recognised in the consolidated balance sheet as at 30 June 2013. The dividends were paid out to shareholders on 3 July 2013.

In addition, the annual general meeting resolved to recall Member of the Supervisory Board Tonu Toomik in connection with the Supervisory Board's resolution to appoint Tonu Toomik as Member of the Management Board of AS Merko Ehitus. The Supervisory Board of AS Merko Ehitus resolved to recall Member of the Management Board Viktor Moisja from 5 June 2013, with Mr Moisja continuing service in the engineering division of the company's subsidiary AS Merko Ehitus Eesti, and to appoint the former member of the Supervisory Board Tonu Toomik as a new member of the Management Board.

Changes in the legal structure of the group

In the first quarter of 2013, OU Paepargi 57 was established as a 100% subsidiary of AS Merko Ehitus group. The share capital of the private limited company is EUR 2,500. The company was founded for the purpose of ensuring company-based accounting for development projects.

In the second quarter of 2013, OU Baltic Electricity Engineering, a 100% subsidiary of AS Merko Ehitus, was renamed OU Merko Investments. The private limited company has a share capital of EUR 10,000.

On 22 May 2013, AS Merko Ehitus concluded an intra-group transaction, disposing a 100% stake in SIA Merks, a subsidiary engaged in construction, to OU Merko Investments, which is fully owned by AS Merko Ehitus. The transaction served the technical purpose of reorganising the legal structure of the group.

By 4 July 2013, the liquidation of Merko Ukraine LLC, initiated in the autumn of 2012, was completed, with the company deleted from the registers.

On 10 June 2013, the shareholders of OU Unigate, a 50%-owned joint venture of AS Merko Ehitus, resolved to increase the nominal value of the share of the joint venture by EUR 887.07 to EUR 6,000 with the aim of bringing the company's share capital into line with the requirements arising from the Commercial Code. A monetary contribution of EUR 350,000 was made by both shareholders, with the nominal value of the share capital amounting to EUR 444 and the share premium to EUR 349,556.

On 17 July 2013, UAB Merko Bustas, a 100% subsidiary of AS Merko Ehitus, established a 100% subsidiary UAB Kraziu Projektas in Lithuania, with a share capital of LTL 10,000 (EUR 2,896). The subsidiary was established with the aim of acquiring registered immovables for development purposes in Lithuania.

On 16 August 2013, OU Paepargi, a 100% subsidiary of AS Merko Ehitus 100% subsidiary OU Constancia, was sold at a sales price of EUR 2,500 to Capital Mill OU.

AS Merko infra branch in Latvia was registered on 10 September 2013. The branch was established with the aim of participating in large-scale infrastructure facilities construction tenders where the competence and references of SIA Merks alone would fall short.

On 3 October 2013, AS Merko Ehitus Eesti, a 100% subsidiary of AS Merko Ehitus, established a 51% subsidiary OU Heamaja. The company was established with the aim of participating in the Suur-Ameerika 1, Tallinn building construction works concession contract tender organized by AS Riigi Kinnisvara.