MERKO EHITUS

COMMENTARY TO FINANCIAL RESULTS



CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR YEAR 2000



Year 2000 unaudited and consolidated net sales of Merko Ehitus 

group amounted to 1420 million EEK, and net profit was 66.6 million EEK.  

The respective figures year ago were net sales of 734 million EEK and net

profit, excluding the one-off financial expense of 56.2 million EEK,

incurred by the spin-off of E.L.L. Kinnisvara, was 16.5 million EEK.



The consolidated financial results of Merko Ehitus group include 

the results of parent company AS Merko Ehitus, and its 100% 

subsidiaries SIA Merks (project management and construction) in 

Latvia, UAB Merko Statyba (project management and construction) in 

Lithuania, and Gustaf (construction), and 66% holding in subsidiary 

Merko Tartu (construction), and 65% holding in subsidiary Matek 

(production of structures for small houses).

 

In addition to the subsidiaries, the profit figure of Merko Ehitus 

group also includes the results of the affiliated enterprises 

Normanni Linnagrupi AS (project management, 50% holding) and 

Insenervõrgud (engineering, 50% holding) and Tartu Maja 

Betoontooted (production of concrete, 25% holding).

 



Financial ratios illustrating the activities of Merko Ehitus group in 

year 2000 were:





					2000 a. 	1999 a. 



Net profit margin                         4,7%           2,2%*

Operating profit margin                   4,6%           3,2%

Return on equity (per year)              49,4%          12,6%*

Return on assets (per year)              17,7%           5,0%*

Current ratio                             1,3            1,3

Invoice turnover (per year)               7,0            8,4

Equity-to-assets ratio                     34%            39%





* excluding the one-off financial expense of 56.2 million EEK, 

  incurred by the spin-off of E.L.L. Kinnisvara



Net profit margin: net profit / net sales

Gross profit margin: gross profit / net sales

Return on equity (annual): net profit / average equity during the period

Return on assets (annual): net profit / average assets during the period 

Current ratio: current assets / current liabilities

Invoice turnover (annual): net sales / accounts receivable

Equity-to-assets ratio: owners equity / total assets



Year 2000 consolidated and unaudited income statement and balance 

sheet are compiled in accordance with the principles of the International 

Accounting Standards (IAS), and correspond with the Estonian legal acts 

regulating the accounting principles used.



Unfinished costruction contracts are presented in the balance sheet 

according to the Standard of “Accounting for long-term costruction 

contracts” of the Estonian Accounting Board, which came into effect in

year 2000. In order to ensure the comparability, the figures of unfinished 

costruction contracts of 1999 are presented on the same balance sheet rows.





Ülo Metsaots

Financial Director

+372 6105 110