Quarterly Report • Nov 6, 2025
Quarterly Report
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2025 III quarter and 9 months consolidated interim report (unaudited)
Compared to the optimistic estimates at the beginning of the year, the economic
growth forecast for 2025 has become increasingly modest. Estonia's economic
growth continues at a slow pace, with the latest forecasts estimating annual
growth at 0.6%. The construction market shows signs of stabilisation, but the
sector's recovery remains very slow and uneven.
The Buildings segment accounts for 80% of the Group's total revenue, and there
has been no significant change in the revenue distribution between segments
compared to the same period last year. The decrease in revenue compared to the
same period in 2024 was primarily affected by an approximately 21% decline in
the volume of the Buildings segment. Revenue in the Infrastructure segment
remained essentially at the same level. During the reporting period, the Group
signed a substantial volume of new contracts, the impact of which on revenue
will materialise over a longer timeframe.
The Group's gross profit margin was 6.7% and operating profitability 3.2%. Net
profit for the reporting period was mainly affected by an exchange loss
resulting from the weakening of the Ukrainian hryvnia against the euro.
On an annual basis, i.e., compared to 30 September 2024, the Group's order book
increased by 41%. The volume of outstanding work increased in both the Buildings
and Infrastructure segments. A significant share of the order book consists of
work to be performed in 2026 and 2027.
Condensed consolidated interim statement of financial position
ASSETS
Current assets
Cash and cash equivalents 8,083 8,195
Trade and other receivables 44,289 29,449
Prepayments 3,261 3,543
Inventories 25,500 28,091
Total current assets 81,133 69,278
Non-current assets
Other investments 77 77
Trade and other receivables 11,202 10,681
Investment property 5,517 5,517
Property, plant and equipment 12,553 13,247
Intangible assets 14,922 14,951
Total non-current assets 44,271 44,473
TOTAL ASSETS 125,404 113,751
LIABILITIES
Current liabilities
Borrowings 11,758 12,626
Trade payables 51,308 36,819
Other payables 9,814 10,260
Deferred income 12,519 12,472
Provisions 809 1,333
Total current liabilities 86,208 73,510
Non-current liabilities
Borrowings 3,395 5,720
Trade payables 2,955 5,091
Provisions 3,259 2,826
Total non-current liabilities 9,609 13,637
TOTAL LIABILITIES 95,817 87,147
EQUITY
Share capital 14,379 14,379
Own (treasury) shares (660) (660)
Share premium 635 635
Statutory capital reserve 2,554 2,554
Translation reserve 4,429 4,034
Retained earnings 6,484 4,746
Total equity attributable to owners of the
parent 27,821 25,688
Non-controlling interests 1,766 916
TOTAL EQUITY 29,587 26,604
TOTAL LIABILITIES AND EQUITY 125,404 113,751
Condensed consolidated interim statement of comprehensive income
Revenue 147,666 55,028 178,722 63,777 223,925
Cost of sales (137,747) (50,559) (165,955) (58,204) (207,155)
Gross profit 9,919 4,469 12,767 5,573 16,770
Marketing and distribution
expenses (279) (110) (301) (129) (422)
Administrative expenses (4,758) (1,686) (5,011) (1,638) (7,878)
Other operating income 70 2 145 68 286
Other operating expenses (196) (36) (628) (170) (695)
Operating profit 4,756 2,639 6,972 3,704 8,061
Finance income 349 91 437 120 678
Finance costs (2,517) (613) (2,625) (1,079) (3,011)
Net finance costs (2,168) (522) (2,188) (959) (2,333)
Profit before tax 2,588 2,117 4,784 2,745 5,728
Income tax expense 0 0 (237) 0 (563)
Profit for the period 2,588 2,117 4,547 2,745 5,165
Other comprehensive income
Items that may be reclassified
subsequently to
profit or loss
Exchange differences on
translating foreign operations 395 (78) 502 337 248
Total other comprehensive
income (expense) 395 (78) 502 337 248
TOTAL COMPREHENSIVE INCOME 2,983 2,039 5,049 3,082 5,413
Profit attributable to:
Owners of the parent 1,738 1,872 3,373 2,353 3,827
Non-controlling interests 850 245 1,174 392 1,338
Profit for the period 2,588 2,117 4,547 2,745 5,165
Comprehensive income
attributable to:
Owners of the parent 2,133 1,794 3,875 2,690 4,075
Non-controlling interests 850 245 1,174 392 1,338
Comprehensive income for the
period 2,983 2,039 5,049 3,082 5,413
Earnings per share
attributable to owners of the
parent:
Basic earnings per share (EUR) 0.06 0.06 0.11 0.07 0.12
Diluted earnings per share (EUR) 0.06 0.06 0.11 0.07 0.12
Condensed consolidated interim statement of cash flows
Cash flows from operating activities
Cash receipts from customers 167,978 199,510
Cash paid to suppliers (143,000) (173,448)
VAT paid (5,906) (7,048)
Cash paid to and for employees (16,021) (15,051)
Income tax paid (350) (237)
Net cash from operating activities 2,701 3,726
Cash flows from investing activities
Paid for acquisition of property, plant and equipment (247) (289)
Proceeds from sale of property, plant and equipment 409 193
Loans provided (44) (35)
Repayments of loans provided 6 1
Dividends received 0 6
Interest received 91 159
Net cash from investing activities 215 35
Cash flows from financing activities
Proceeds from loans received 783 902
Repayments of loans received (1,074) (1,857)
Lease payments (1,845) (1,689)
Payments of lease interest (195) (260)
Interest paid (560) (559)
Dividends paid 0 (661)
Net cash used in financing activities (2,891) (4,124)
Net cash flow 25 (363)
Cash and cash equivalents at beginning of period 8,195 11,892
Effect of movements in foreign exchange rates (137) (53)
Change in cash and cash equivalents 25 (363)
Cash and cash equivalents at end of period 8,083 11,476
Financial review
Financial performance
Nordecon's gross profit for the first nine months of 2025 amounted to EUR9,919
thousand (9M 2024: EUR12,767 thousand). The group's gross margin decreased
slightly year on year, dropping to 6.7% for the nine-month period (9M
2024: 7.1%) and 8.1% for the third quarter (Q3 2024: 8.7%). Both operating
segments earned a profit in both the nine-month period and the third quarter.
The Buildings segment achieved gross margins of 7.7% for the nine months and
8.4% for the third quarter (9M 2024: 8.5% and Q3 2024: 10.2%), while the
Infrastructure segment achieved gross margins of 5.5% and 8.9% for the same
periods (9M 2024: 5.1% and Q3 2024: 9.2%).
The group's administrative expenses for the first nine months of 2025 totalled
EUR4,758 thousand, which is around 5% lower than a year earlier (9M 2024: EUR5,011
thousand). The ratio of administrative expenses to revenue (12 months rolling)
increased year on year, rising to 4.0% (9M 2024: 3.1%), as the decline in
revenue outpaced the decrease in expenses.
The group's operating profit for the nine months of 2025 was EUR4,756 thousand (9M
2024: 6,972 thousand) and EBITDA was EUR6,719 thousand (9M 2024: EUR9,154 thousand).
The group's finance income and costs are affected by exchange rate fluctuations
in the group's foreign markets, particularly movements in the exchange rate of
the Ukrainian hryvnia. In the first nine months of 2025, the exchange rate of
the Ukrainian hryvnia weakened against the euro by around 9% and the translation
of the loans provided to the group's Ukrainian subsidiaries in euros into the
local currency gave rise to a foreign exchange loss of EUR591 thousand (9M 2024:
EUR534 thousand).
The group ended the period with a net profit of EUR2,588 thousand (9M 2024: EUR4,547
thousand). Net profit attributable to owners of the parent, Nordecon AS,
amounted to EUR1,738 thousand (9M 2024: EUR3,373 thousand).
Cash flows
The group's operating activities produced a net cash inflow of EUR2,701 thousand
in the nine months of 2025 (9M 2024: an inflow of EUR3,726 thousand). The items
with the strongest impact on operating cash flow were receipts from customers
and cash paid to suppliers, which decreased due to the decline in revenue.
Investing activities resulted in a net cash inflow of EUR215 thousand (9M 2024: an
inflow of EUR35 thousand). Payments made to acquire property, plant and equipment
totalled EUR247 thousand (9M 2024: EUR289 thousand) and proceeds from the sale of
property, plant and equipment amounted to EUR409 thousand (9M 2024: EUR193
thousand). Loans provided amounted to EUR44 thousand (9M 2024: EUR35 thousand) and
interest received to EUR91 thousand (9M 2024: EUR159 thousand).
Financing activities generated a net cash outflow of EUR2,891 thousand (9M 2024:
an outflow of EUR4,124 thousand). The largest items were related to loans and
leases. Proceeds from loans received amounted to EUR783 thousand, consisting
mainly of the use of development loans (9M 2024: EUR902 thousand). Repayments of
loans received totalled EUR1,074 thousand (9M 2024: EUR1,857 thousand), consisting
of regular repayments of long-term investment and development loans and the
change in the overdraft balance. Lease payments amounted to EUR1,845 thousand (9M
2024: EUR1,689 thousand). There were no dividend payments in the reporting period,
whereas dividends paid in the first nine months of 2024 amounted to EUR661
thousand.
At 30 September 2025, the group's cash and cash equivalents amounted to EUR8,083
thousand (30 September 2024: EUR11,476 thousand).
Key financial figures and ratios
Revenue (EUR'000) 147,666 178,722 130,799 223,925
Revenue change (17.4)% 36.6% (20.9)% 20.1%
Net profit (loss) (EUR'000) 2,588 4,547 (2,772) 5,165
Net profit (loss)
attributable to owners of
the parent (EUR'000) 1,738 3,376 (2,452) 3,827
Weighted average number of
shares 31,528,585 31,528,585 31,528,585 31,528,585
Earnings per share (EUR) 0.06 0.11 (0.08) 0.12
Administrative expenses to
revenue 3.2% 2.8% 3.3% 3.5%
Administrative expenses to
revenue (rolling) 4.0% 3.1% 3.3% 3.5%
EBITDA (EUR'000) 6,719 9,154 1,799 11,025
EBITDA margin 4.6% 5.1% 1.4% 4.9%
Gross margin 6.7% 7.1% 3.3% 7.5%
Operating margin 3.2% 3.9% (0.4)% 3.6%
Operating margin excluding
gain on asset sales 3.2% 3.8% (0.6)% 3.5%
Net margin 1.8% 2.5% (2.1)% 2.3%
Return on invested capital 7.2% 13.0% 1.9% 15.6%
Return on equity 9.2% 18.4% (1.4)% 21.0%
Equity ratio 23.6% 22.1% 17.0% 23.4%
Return on assets 2.2% 3.8% 0.3% 4.4%
Gearing 15.8% 12.6% 16.8% 22.6%
Current ratio 0.94 1.00 0.91 0.94
Order book (EUR'000) 276,332 195,628 175,539 209,489
Performance by geographical market
In the nine months of 2025, revenue generated outside Estonia accounted for
approximately 2% of the group's total revenue, consisting solely of revenue
generated in Ukraine. A significant proportion of revenue during the period came
from the reconstruction of a building in Ovruch, Zhytomyr Oblast, Ukraine, into
an apartment building for internally displaced persons, and from the restoration
of the administrative building of the Kiev TV tower. In addition, we continued
to provide services under contracts signed in 2023 for the reconstruction of
substations and the installation of associated physical protection systems in
the Poltava, Zhytomyr, Volyn and Ivano-Frankivsk oblasts. Work in these areas is
taking longer than originally planned and depends on the needs of the national
grid. No revenue was generated in Sweden during the period under review, as
Nordecon had no construction contracts in progress in the Swedish market
9M 2025 9M 2024 9M 2023 2024
Estonia 98% 98% 98% 98%
Ukraine 2% 2% 1% 2%
Finland - - 1% -
Performance by business line
Segment revenues
The group's goals include maintaining a balance between the revenues of the two
main operating segments (Buildings and Infrastructure), where market conditions
permit. This helps us to diversify risk and provides better opportunities to
continue construction activities in challenging market conditions where, for
example, volumes in one subsegment decline sharply while volumes in another
start to grow more rapidly.
The group's revenue for the first nine months of 2025 was EUR147,666 thousand,
approximately 17% lower than in the same period in 2024, when revenue amounted
to EUR178,722 thousand. The Buildings segment generated revenue of EUR118,569
thousand and the Infrastructure segment revenue of EUR29,082 thousand. The
corresponding figures for the first nine months of 2024 were EUR149,615 thousand
and EUR29,068 thousand. Revenue generated by the Buildings segment decreased by
around 21%, while revenue generated by the Infrastructure segment remained more
or less stable compared to the same period last year.
Buildings 80% 84% 73% 84%
Infrastructure 20% 16% 27% 16%
Subsegment revenues
In the nine months of 2025, most of the revenue generated by the Buildings
segment came from the public and commercial buildings subsegments, with
commercial buildings contributing at their highest level in recent years.
Revenue from commercial buildings increased by around 60% year on year, while
revenue from public buildings decreased by around 46%. Revenue from the
apartment buildings subsegment, which resulted from our own property development
operations, also declined.
The largest projects in the public buildings subsegment were the design and
construction of a new study and sports building for the Saku Upper Secondary
School near Tallinn, the design and construction of a study building for the
Estonian Centre for Defence Investment on the Raadi campus in Tartu, and the
construction of Loodusmaja (Nature Hub) and the new television building of the
Estonian Public Broadcasting in Tallinn.
The largest projects in the commercial buildings subsegment were the
construction of the LEED Gold compliant Golden Gate office building at Ahtri 6
in Tallinn, a commercial building at Väike-Turu 7 in Tartu, the LEED Gold
compliant Uusküla spa hotel on the northern shore of Lake Peipus in Alutaguse
rural municipality and Lidl stores in Võru and Viljandi.
Revenue from our own property development operations, which is reported in the
apartment buildings subsegment, increased compared to the same period last year,
reaching EUR9,079 thousand (9M 2024: EUR7,453 thousand). The figure primarily
reflects the sale of apartments in phase 1 of the Seileri Kvartal housing estate
in Pärnu (https://seileri.ee) and the Tammepärja Kodu housing estate in the
Tammelinn district in Tartu (https://tammelinn.ee). Preparations for and
construction of the next phases are underway in both developments. When carrying
out our own development activities, we carefully monitor potential risks in the
housing development market.
Public buildings 48% 70% 33% 70%
Commercial buildings 41% 21% 23% 21%
Apartment buildings 10% 7% 30% 6%
Industrial and warehouse facilities 1% 2% 14% 3%
The largest revenue contributor in the Infrastructure segment is still the road
construction and maintenance subsegment, whose revenue decreased by around 17%
compared to the same period last year. A major share of the subsegment's revenue
came from the construction of the Rail Baltica main line railway infrastructure:
the Hagudi-Alu section of stage III in Rapla County and the Selja-Tootsi section
of stage I in Pärnu County. A significant share of revenue also came from the
sale of asphalt concrete and the provision of road maintenance services in Järva
County. Most of the other engineering revenue resulted from the construction of
a platform area for Class E aircraft at Tallinn Airport.
Road construction and maintenance 83 % 94% 60% 90%
Other engineering 17 % 6% 31% 10%
Environmental engineering 0 % 0% 9% 0%
Order book
The group's order book (backlog of contracts signed but not yet performed) stood
at EUR276,332 thousand at 30 September 2025. Compared to the same period last
year, the order book has increased by around 41%. In the nine months of 2025, we
signed new contracts for EUR191,857 thousand (9M 2024: EUR131,801 thousand), of
which contracts for EUR19,621 thousand in the third quarter (Q3 2024: EUR67,771
thousand).
Order book (EUR'000) 276,332 195,628 175,539 209,489
The Buildings segment accounts for 68% and the Infrastructure segment for 32% of
the group's order book (30 September 2024: 82% and 18%, respectively). Compared
to 30 September 2024, the order book of the Buildings segment has increased by
18%, primarily through contracts secured in the public buildings and commercial
buildings subsegments. The order book of the Infrastructure segment has
increased more than twofold, driven by contracts related to Rail Baltica.
The Rail Baltica project, which has significantly revitalised the construction
sector, has been supplemented by road construction projects financed by the
European Cohesion Fund through the Estonian Transport Administration. However,
this does not fully offset the underfunding of road construction. The volume of
public investment in the order book of the Buildings segment has also decreased.
There is some activity at the local government level and in the national defence
sector. The private sector is showing signs of recovery.
Major contracts secured in the nine months of 2025 include:
* Construction of a spa hotel and a swimming complex in Viljandi with an
approximate cost of EUR30,000 thousand.
* Construction of the Punamütsike Kindergarten in Võru with an approximate
cost of EUR6,370 thousand.
* Construction of the Selja-Tootsi section of stage I of the Rail Baltica
Pärnu County main line railway infrastructure with an approximate cost of
EUR62,300 thousand.
* Design and construction of a barracks at the Tapa Army Base for the Estonian
Centre for Defence Investment with an approximate cost of EUR5,300 thousand.
* Design and construction of a building for the Estonian Centre for Defence
Investment in Harju County with an approximate cost of EUR3,700 thousand.
* Construction of the Tiskre School in Harku rural municipality with an
approximate cost of EUR14,500 thousand.
* Design and construction of a technological warehouse for Cristella in Võru
with an approximate cost of EUR4,000 thousand.
* Design and construction of buildings for the Estonian Centre for Defence
Investment with an approximate cost of EUR34,300 thousand.
* Reconstruction of a state building in Võru with an approximate cost of
EUR4,700 thousand.
* Construction of a commercial building in Narva with an approximate cost of
EUR5,005 thousand.
Based on the size of the order book and its distribution across financial years,
as well as the general outlook for the economy and the construction market, the
group's management expects business volumes in 2025 to decrease compared to
2024. In a highly competitive environment, management has avoided taking
unjustified risks that could materialise during contract execution and adversely
affect the group's results. The main focus is on managing fixed costs,
increasing productivity and executing pre-construction and design activities
effectively to leverage our professional competitive advantages.
People
Employees and staff costs
The group's average number of employees for the first nine months of 2025 was
425, including 272 engineers and technical professionals (ETPs). Compared to the
same period last year, the number of employees decreased by around 3%.
Average number of employees at group companies (the parent company and the
subsidiaries):
ETPs 272 283 382 283
Workers 153 154 185 152
Total average 425 437 567 435
The group's staff costs for the nine months of 2025, including all taxes,
amounted to EUR14,694 thousand compared with EUR16,178 thousand in the same period
in 2024. Staff costs declined by around 9%.
In the first nine months of 2025, the service fees of the members of the council
of Nordecon AS totalled EUR173 thousand and the related social security charges
amounted to EUR57 thousand (9M 2024: EUR149 thousand and EUR49 thousand,
respectively).
The service fees of the members of the board of Nordecon AS totalled EUR424
thousand and the related social security charges amounted to EUR140 thousand (9M
2024: EUR391 thousand and EUR129 thousand, respectively).
Labour productivity and labour cost efficiency
We measure the efficiency of our operating activities using the following
productivity and efficiency indicators, which are based on the number of
employees and the staff costs incurred:
Nominal labour productivity (rolling), (EUR'000) 452.7 557.4 488.4 514.03
Change against the comparative period, % (18.8)% 14.1% 2.7% 3.0%
Nominal labour cost efficiency (rolling), (EUR) 8.5 11.0 10.4 9.3
Change against the comparative period, % (22.4)% 5.0% (12.8)% (9.7)%
The group's nominal labour productivity and nominal labour cost efficiency
decreased year on year because the decline in revenue exceeded the decrease in
staff numbers and costs.
Andri Hõbemägi
Nordecon AS
Head of Investor Relations
Tel: +372 6272 022
Email: [email protected] (mailto:[email protected])
www.nordecon.com (http://www.nordecon.com)
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