OREANDA-NEWS. April 22, 2015. The management board of AS Merko Ehitus has decided to change the segment reporting structure in the group’s financial reports and harmonise it with the group’s new internal reporting structure, which corresponds to the group’s country-based management structure and takes into account the changes in the operational volumes of business segments.

As a result of the change, instead of the previous five segments presented (general construction, civil engineering, road construction, real estate development and other segments), the group will start submitting segment reporting in the following three segments:

  • Estonian construction service
  • Latvia and Lithuanian construction service
  • Real estate development

Estonian construction service and Latvian and Lithuanian construction service segments include all projects of the respective countries pertaining to construction services: including general construction, civil engineering and road construction projects.

Real estate development is based on the development of real estate in the ownership of the group, encompassing development of apartment projects, long-term investments into real estate and real estate projects executed for business purposes, and to a minor extent also real estate maintenance and lease. The reporting of this segment has not changed compared to the former coverage.

As a result of the change the operating segments presented in the group’s external financial reporting structure are grouped together according to the requirements applicable to disclosure of operating segments pursuant to the conditions specified in the International Financial Reporting Standards (IFRS 8).

The group will introduce the changes starting on 1 January 2015 and present interim reports with the new segment reporting structure starting from the first quarter 2015, which will be submitted to the stock exchange on 7 May 2015 before the beginning of the trading day at 8:00 in the morning local Estonian time (EET).

The following presents unaudited comparative data for 2014 pursuant to the new segment reporting structure:

 

ESTONIAN CONSTRUCTION SERVICE
in million euros		 3M 2014 Q2 2014 6M 2014 Q3 2014 9M 2014 Q4 2014 12M 2014
Revenue 26.2 39.1 65.3 43.6 109.0 32.6 141.5
% of total revenue 53.5% 60.3% 57.4% 63.7% 59.8% 46.5% 56.1%
Gross profit 1.3 4.0 5.4 4.5 9.9 4.1 14.0
Gross profit margin 5.0% 10.4% 8.2% 10.3% 9.1% 12.7% 9.9%

 

LATVIAN AND LITHUANIAN CONSTRUCTION SERVICE
in million euros		 3M 2014 Q2 2014 6M 2014 Q3 2014 9M 2014 Q4 2014 12M 2014
Revenue 12.4 15.3 27.8 19.1 46.8 18.2 65.0
% of total revenue 25.4% 23.7% 24.4% 27.9% 25.7% 25.9% 25.8%
Gross profit 0.4 0.6 1.0 1.1 2.1 0.6 2.6
Gross profit margin 3.1% 3.8% 3.5% 5.6% 4.4% 3.1% 4.0%

 

REAL ESTATE DEVELOPMENT
in million euros		 3M 2014 Q2 2014 6M 2014 Q3 2014 9M 2014 Q4 2014 12M 2014
Revenue 10.3 10.4 20.6 5.8 26.4 19.3 45.8
% of total revenue 21.1% 16.0% 18.2% 8.4% 14.5% 27.6% 18.1%
Gross profit 2.2 1.5 3.7 0.6 4.3 3.8 8.1
Gross profit margin 21.8% 14.5% 18.1% 10.5% 16.4% 19.4% 17.7%

AS Merko Ehitus (group.merko.ee) consists of Estonia’s leading construction company AS Merko Ehitus Eesti, the Latvian-market-oriented SIA Merks, UAB Merko Statyba that is operating on the Lithuanian market and the real estate development business unit along with real estate holding companies. As at the end of the year 2014, the group employed 765 people and the company’s revenue for 2014 was EUR 252.3 million.