Merko Ehitus' Q2 2026 results continued the weak trend seen in the first quarter, coming in below last year's level.

In Q2, the company reported a net profit of €8.5M, down 24% YoY. In the first half of 2026, net profit declined 41% YoY to €12.8M.

Net profit

Revenue increased 12% YoY in Q2. However, due to lower turnover in the first quarter, total H1 revenue was 11% lower YoY, amounting to €150M.

In Q2 2026, revenue in the construction segment grew faster than in the real estate segment, increasing 15% YoY. However, the construction segment's operating profit fell 43% YoY. Its operating margin was halved compared to the same period last year, declining from 8.34% in Q2 2025 to 4.12% in Q2 2026.

Results by segments, 2026 Q2

The company's profitability in Q2 was weighed down by the cost of sales, which increased 18% YoY, outpacing revenue growth. As a result, the gross margin was lower than a year earlier. Nevertheless, a 13% gross margin is fairly typical for the company. The comparison is distorted by last year's exceptionally high gross margin, which helped partially offset the negative impact of the significant decline in revenue.

Q2 gross margin

During Q2 2026, the company signed new contracts worth €79.6M, while its order book increased by nearly €10M during the quarter to €835.7M.

Order book

As results have weakened, the company's valuation metrics have expanded significantly. Its P/E currently stands at 15.6x, while EV/EBITDA is 18.3x. This reflects market expectations for earnings growth, supported by the substantially expanded order book, a significant portion of which consists of the contract for the Rūdininkai military campus project.