The Estonian economy continues to grow slowly, with the latest forecasts estimating annual economic growth at 1.2%. The construction market is showing signs of stabilisation. Within the buildings segment, there are indications of a slight increase in orders from the private sector. Public sector volumes are being supported by orders from local governments and the Estonian Centre for Defence Investment. The infrastructure segment is also being supported by the volume of Rail Baltica works this year, whereas investments by the Transport Administration have not recovered.
During the period, revenues generated by both group's main operating segments decreased compared to the first six months of 2024. The Buildings segment accounted for 89% of the group's total revenue, while the Infrastructure segment's contribution decreased slightly (H1 2025: 11%; H1 2024: 13%). In the first half of the year, the group secured a significant number of new contracts, the impact of which will be reflected in revenue over a longer period.
The group's gross margin was 5.9% and operating margin was 2.3%. Net profit for the period was primarily affected by the foreign exchange loss resulting from the weakening of the Ukrainian hryvnia against the euro.
Compared to 30 June 2024, the group's order book grew by 70%. The order books of both the Buildings and the Infrastructure segments increased. A significant portion of the order book comprises work scheduled for 2026 and 2027.
Condensed consolidated interim statement of financial position
| €'000 | 30 June 2025 | 31 December 2024 |
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | 9,326 | 8,195 |
| Trade and other receivables | 38,683 | 29,449 |
| Prepayments | 2,701 | 3,543 |
| Inventories | 24,068 | 28,091 |
| Total current assets | 74,778 | 69,278 |
| Non-current assets | ||
| Other investments | 77 | 77 |
| Trade and other receivables | 10,809 | 10,681 |
| Investment property | 5,517 | 5,517 |
| Property, plant and equipment | 13,102 | 13,247 |
| Intangible assets | 14,927 | 14,951 |
| Total non-current assets | 44,432 | 44,473 |
| TOTAL ASSETS | 119,210 | 113,751 |
| LIABILITIES | ||
| Current liabilities | ||
| Borrowings | 12,432 | 12,626 |
| Trade payables | 45,621 | 36,819 |
| Other payables | 10,087 | 10,260 |
| Deferred income | 12,665 | 12,472 |
| Provisions | 1,039 | 1,333 |
| Total current liabilities | 81,844 | 73,510 |
| Non-current liabilities | ||
| Borrowings | 3,811 | 5,720 |
| Trade payables | 3,023 | 5,091 |
| Provisions | 2,984 | 2,826 |
| Total non-current liabilities | 9,818 | 13,637 |
| TOTAL LIABILITIES | 91,662 | 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 | 4,507 | 4,034 |
| Retained earnings | 4,612 | 4,746 |
| Total equity attributable to owners of the parent | 26,027 | 25,688 |
| Non-controlling interests | 1,521 | 916 |
| TOTAL EQUITY | 27,548 | 26,604 |
| TOTAL LIABILITIES AND EQUITY | 119,210 | 113,751 |
Condensed consolidated interim statement of comprehensive income
| €'000 | H1 2025 | Q2 2025 | H1 2024 | Q2 2024 | 2024 |
| Revenue | 92,638 | 53,283 | 114,945 | 68,700 | 223,925 |
| Cost of sales | (87,188) | (49,635) | (107,751) | (63,644) | (207,155) |
| Gross profit | 5,450 | 3,648 | 7,194 | 5,056 | 16,770 |
| Marketing and distribution expenses | (169) | (86) | (172) | (104) | (422) |
| Administrative expenses | (3,072) | (1,526) | (3,373) | (1,809) | (7,878) |
| Other operating income | 68 | 16 | 77 | 51 | 286 |
| Other operating expenses | (160) | (126) | (458) | (312) | (695) |
| Operating profit | 2,117 | 1,926 | 3,268 | 2,882 | 8,061 |
| Finance income | 258 | 113 | 317 | 180 | 678 |
| Finance costs | (1,904) | (1,165) | (1,546) | (841) | (3,011) |
| Net finance costs | (1,646) | (1,052) | (1,229) | (661) | (2,333) |
| Profit before tax | 471 | 874 | 2,039 | 2,221 | 5,728 |
| Income tax expense | 0 | 0 | (237) | (237) | (563) |
| Profit for the period | 471 | 874 | 1,802 | 1,984 | 5,165 |
| Other comprehensive income Items that may be reclassified subsequently to profit or loss | |||||
| Exchange differences on translating foreign operations | 473 | 569 | 165 | 114 | 248 |
| Total other comprehensive income | 473 | 569 | 165 | 114 | 248 |
| TOTAL COMPREHENSIVE INCOME | 944 | 1,443 | 1,967 | 2,098 | 5,413 |
| Profit (loss) attributable to: | |||||
| - Owners of the parent | (134) | 482 | 1,020 | 1,613 | 3,827 |
| - Non-controlling interests | 605 | 392 | 782 | 371 | 1,338 |
| Profit for the period | 471 | 874 | 1,802 | 1,984 | 5,165 |
| Comprehensive income attributable to: | |||||
| - Owners of the parent | 339 | 1,051 | 1,185 | 1,727 | 4,075 |
| - Non-controlling interests | 605 | 392 | 782 | 371 | 1,338 |
| Comprehensive income for the period | 944 | 1,443 | 1,967 | 2,098 | 5,413 |
| Earnings per share attributable to owners of the parent: | |||||
| Basic earnings per share (€) | (0.00) | 0.02 | 0.03 | 0.05 | 0.12 |
| Diluted earnings per share (€) | (0.00) | 0.02 | 0.03 | 0.05 | 0.12 |
Condensed consolidated interim statement of cash flows
| €'000 | H1 2025 | H1 2024 |
| Cash flows from operating activities | ||
| Cash receipts from customers | 104,987 | 121,573 |
| Cash paid to suppliers | (88,153) | (100,334) |
| VAT paid | (3,252) | (4,746) |
| Cash paid to and for employees | (10,282) | (10,142) |
| Income tax paid | (350) | (237) |
| Net cash from operating activities | 2,950 | 6,114 |
| Cash flows from investing activities | ||
| Paid for acquisition of property, plant and equipment | (198) | (257) |
| Proceeds from sale of property, plant and equipment | 394 | 78 |
| Loans provided | (41) | (18) |
| Repayments of loans provided | 4 | 1 |
| Dividends received | 0 | 6 |
| Interest received | 61 | 138 |
| Investments in long-term deposits | (300) | (250) |
| Net cash used in investing activities | (80) | (302) |
| Cash flows from financing activities | ||
| Proceeds from loans received | 783 | 468 |
| Repayments of loans received | (640) | (3,392) |
| Payments of lease principal | (1,247) | (1,091) |
| Payments of lease interest | (134) | (177) |
| Interest paid | (398) | (368) |
| Dividends paid | 0 | (661) |
| Other payments | 0 | 50 |
| Net cash used in financing activities | (1,636) | (5,171) |
| Net cash flow | 1,234 | 641 |
| Cash and cash equivalents at beginning of period | 8,195 | 11,892 |
| Effect of movements in foreign exchange rates | (103) | (20) |
| Change in cash and cash equivalents | 1,234 | 641 |
| Cash and cash equivalents at end of period | 9,326 | 12,513 |
Financial review
Financial performance
In the first half of 2025, Nordecon delivered a gross profit of €5,450 thousand (H1 2024: €7,194 thousand). The group's gross margin decreased slightly year on year, dropping to 5.9% for the first half of the year (H1 2024: 6.3%) and 6.8% for the second quarter (Q2 2024: 7.4%).
The Buildings segment earned a profit in both the first half and the second quarter of the year, the respective gross margins being 7.4% and 7.2% (H1 and Q2 2024: 7.7%). The Infrastructure segment ended the first half of the year with a gross loss of €49 thousand and a gross margin of (0.5)% (H1 2024: 0.9%), but earned a gross profit of €631 thousand in the second quarter, with a gross margin of 8.2% (Q2 2024: 8.5%).
The group's administrative expenses for the first half of 2025 totalled €3,072 thousand, which is around 9% lower than a year earlier (H1 2024: €3,373 thousand). This was mainly due to a decline in staff costs. The ratio of administrative expenses to revenue (12 months rolling) increased year on year, rising to 3.8% (H1 2024: 3.2%) due to lower revenue.
The group's operating profit for the first half of 2025 was €2,117 thousand (H1 2024: 3,268 thousand) and EBITDA was €3,435 thousand (H1 2024: €4,690 thousand).
The group's finance income and costs are affected by exchange rate fluctuations in the group's foreign markets. In the first half of 2025, the exchange rate of the Ukrainian hryvnia weakened against the euro by around 10%, while the exchange rate of the Swedish krona strengthened against the euro by around 2.8%. As a result, the translation of the loans provided to the group's Ukrainian and Swedish subsidiaries in euros into the local currencies gave rise to an exchange loss of €652 thousand (H1 2024: €163 thousand) and an exchange gain of €11 thousand (H1 2024: no exchange gain or loss), respectively.
The group ended the period with a net profit of €471 thousand (H1 2024: €1,802 thousand). The loss attributable to owners of the parent, Nordecon AS, was €134 thousand (H1 2024: a profit of €1,020 thousand).
Cash flows
The group's operating activities produced a net cash inflow of €2,950 thousand in the first half of 2025 (H1 2024: an inflow of €6,114 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 outflow of €80 thousand (H1 2024: an outflow of €302 thousand). Payments made to acquire property, plant and equipment totalled €198 thousand (H1 2024: €257 thousand) and proceeds from the sale of property, plant and equipment amounted to €394 thousand (H1 2024: €78 thousand). Loans provided amounted to €41 thousand (H1 2024: €18 thousand), interest received to €61 thousand (H1 2024: €138 thousand) and investments in long-term deposits to €300 thousand (H1 2024: €250 thousand).
Financing activities generated a net cash outflow of €1,636 thousand (H1 2024: an outflow of €5,171 thousand). Proceeds from loans received amounted to €783 thousand, consisting mainly of the use of development loans (H1 2024: €468 thousand). Repayments of loans received totalled €640 thousand (H1 2024: €3,392 thousand). Lease payments amounted to €1,247 thousand (H1 2024: €1,091 thousand) and interest payments to €398 thousand (H1 2024: €368 thousand). There were no dividend payments in the reporting period, whereas dividends paid in the first half of 2024 amounted to €661 thousand.
At 30 June 2025, the group's cash and cash equivalents amounted to €9,326 thousand (30 June 2024: €12,513 thousand).
Key financial figures and ratios
| Figure/ratio | H1 2025 | H1 2024 | H1 2023 | 2024 | ||
| Revenue (€'000) | 92,638 | 114,945 | 86,526 | 223,925 | ||
| Revenue change | (19)% | 33% | (15)% | 20.1% | ||
| Net profit (loss) (€'000) | 471 | 1,802 | (2,299) | 5,165 | ||
| Net profit (loss) attributable to owners of the parent (€'000) | (134) | 1,020 | (2,493) | 3,827 | ||
| Weighted average number of shares | 31,528,585 | 31,528,585 | 31,528,585 | 31,528,585 | ||
| Earnings per share (€) | 0.00 | 0.03 | (0.08) | 0.12 | ||
| Administrative expenses to revenue | 3.3% | 2.9% | 3.4% | 3.5% | ||
| Administrative expenses to revenue (rolling) | 3.8% | 3.2% | 3.0% | 3.5% | ||
| EBITDA (€'000) | 3,435 | 4,690 | 1,149 | 11,025 | ||
| EBITDA margin | 3.7% | 4.1% | 1.3% | 4.9% | ||
| Gross margin | 5.9% | 6.3% | 3.2% | 7.5% | ||
| Operating margin | 2.3% | 2.8% | (0.5)% | 3.6% | ||
| Operating margin excluding gain on asset sales | 2.2% | 2.8% | (0.7)% | 3.5% | ||
| Net margin | 0.5% | 1.6% | (2.7)% | 2.3% | ||
| Return on invested capital | 2.0% | 6.2% | (1.0)% | 15.6% | ||
| Return on equity | 1.7% | 7.8% | (6.1)% | 21.0% | ||
| Equity ratio | 23.1% | 19.2% | 17.1% | 23.4% | ||
| Return on assets | 0.4% | 1.5% | (1.1)% | 4.4% | ||
| Gearing | 15.8% | 6.9% | 30.0% | 22.6% | ||
| Current ratio | 0.91 | 0.88 | 0.89 | 0.94 | ||
| 30 June 2025 | 30 June 2024 | 30 June 2023 | 31 Dec 2024 | |||
| Order book (€'000) | 303,914 | 178,799 | 155,133 | 209,489 | ||
Performance by geographical market
In the first half of 2025, revenue generated outside Estonia accounted for approximately 2% of the group's total revenue, consisting solely of revenues generated in Ukraine. We continue to provide services in Ukraine 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. We are also converting a building in Ovruch, in the Zhytomyr oblast, into an apartment complex for internally displaced persons and restoring the administrative building of the Kyiv TV Tower. No revenue was generated in Sweden during the period under review, as Nordecon had no construction contracts in progress in the Swedish market.
| H1 2025 | H1 2024 | H1 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 our 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 half of 2025 was €92,638 thousand, approximately 19% lower than in the first half of 2024, when revenue amounted to €114,945 thousand. The Buildings segment generated revenue of €82,127 thousand and the Infrastructure segment revenue of €10,501 thousand. The corresponding figures for the first half of 2024 were €100,421 thousand and €14,486 thousand. Revenues from both segments decreased: by 18% for the Buildings segment and by 28% for the Infrastructure segment. The changes, as well as the distribution of revenue between segments, were expected.
| Revenue by operating segment | H1 2025 | H1 2024 | H1 2023 | 2024 |
| Buildings | 89% | 87% | 77% | 84% |
| Infrastructure | 11% | 13% | 23% | 16% |
Subsegment revenues
In the first half 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 35% year on year, while revenue from public buildings decreased by around 47%. 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) 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.
Half-year revenue from our own property development operations, which is reported in the apartment buildings subsegment, remained comparable to the same period last year, amounting to €6,781 thousand (H1 2024: €6,174 thousand). The figure includes revenue from 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. In carrying out our own development activities, we carefully monitor potential risks in the housing development market.
| Buildings segment | H1 2025 | H1 2024 | H1 2023 | 2024 |
| Public buildings | 46% | 68% | 33% | 70% |
| Commercial buildings | 41% | 20% | 25% | 21% |
| Apartment buildings | 12% | 9% | 31% | 6% |
| Industrial and warehouse facilities | 1% | 3% | 11% | 3% |
The largest revenue contributor in the Infrastructure segment is still the road construction and maintenance subsegment, whose revenue decreased by around 30% compared to the same period last year. A major share of the subsegment's revenue came from the construction of the Hagudi-Alu section of stage III of the Rail Baltica Rapla County main line railway infrastructure 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.
| Infrastructure segment | H1 2025 | H1 2024 | H1 2023 | 2024 |
| Road construction and maintenance | 70% | 93% | 65% | 90% |
| Other engineering | 30% | 7% | 20% | 10% |
| Environmental engineering | 0% | 0% | 15% | 0% |
Order book
The group's order book (backlog of contracts signed but not yet performed) stood at €303,914 thousand at 30 June 2025. Compared to the same period last year, the order book has increased by 70%. In the first half of the year, we signed new contracts for €172,236 thousand (H1 2024: €64,030 thousand), of which €60,960 thousand in the second quarter (Q2 2024: €46,413 thousand).
| 30 June 2025 | 30 June 2024 | 30 June 2023 | 31 Dec 2024 | |
| Order book (€'000) | 303,914 | 178,799 | 155,133 | 209,489 |
At 30 June 2025, the Buildings segment accounted for 70% and the Infrastructure segment for 30% of the group's total order book (30 June 2024: 90% and 10%, respectively). Compared to 30 June 2024, the order book of the Buildings segment has grown by 31%, driven by increases in the order books of the public and commercial buildings subsegments. The order book of the Infrastructure segment has also increased significantly, driven by the Rail Baltica contracts. The Rail Baltica projects support the order book of the Infrastructure segment in a situation where investment by the Transport Administration is declining year by year. 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 first half of 2025 include:
- Construction of a spa hotel and a swimming complex in Viljandi with an approximate cost of €30,000 thousand.
- Construction of the Punamütsike Kindergarten in Võru with an approximate cost of €6,370 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 €62,300 thousand.
- Design and construction of a barracks at the Tapa Army Base for the Estonian Centre for Defence Investment with an approximate cost of €5,300 thousand.
- Design and construction of a building for the Estonian Centre for Defence Investment in Harju County with an approximate cost of €3,700 thousand.
- Construction of the Tiskre School in Harku rural municipality with an approximate cost of €14,500 thousand.
- Design and construction of a technological warehouse for Cristella in Võru with an approximate cost of €4,000 thousand.
- Design and construction of buildings for the Estonian Centre for Defence Investment with an approximate cost of €34,300 thousand.
Based on the size of the order book and its distribution over the years, as well as the general outlook for the economy and the construction market, the group's management expects business volumes in 2025 to remain broadly at the same level as in 2024. In a highly competitive environment, we have avoided taking unjustified risks that could materialise during the contract execution phase and adversely affect the group's results. The main focus is on managing fixed costs, increasing productivity and effectively executing pre-construction and design activities to leverage our professional competitive advantages.
People
Employees and staff costs
The average number of the group's employees (at the parent and the subsidiaries) in the first half of 2025 was 418, including 267 engineers and technical professionals (ETP). 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):
| H1 2025 | H1 2024 | H1 2023 | 2024 | |
| ETP | 267 | 282 | 384 | 283 |
| Workers | 151 | 148 | 188 | 152 |
| Total average | 418 | 430 | 572 | 435 |
The group's staff costs for the first half of 2025, including all taxes, were €9,221 thousand compared with €10,127 thousand in the first half of 2024. Staff costs declined by around 9%.
In the first half of 2025, the service fees of the members of the council of Nordecon AS totalled €106 thousand and the related social security charges amounted to €35 thousand (H1 2024: €100 thousand and €33 thousand, respectively).
The service fees of the members of the board of Nordecon AS totalled €281 thousand and the related social security charges amounted to €93 thousand (H1 2024: €264 thousand and €87 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:
| H1 2025 | H1 2024 | H1 2023 | 2024 | |
| Nominal labour productivity (rolling), (€'000) | 469.7 | 553.9 | 488.3 | 514.03 |
| Change against the comparative period, % | (15.2)% | 13.4% | 3.9% | 3.0% |
| Nominal labour cost efficiency (rolling), (€) | 8.7 | 11.0 | 11.0 | 9.3 |
| Change against the comparative period, % | (21.3)% | 0.4% | (11.0)% | (9.7)% |
The group's nominal labour productivity and nominal labour cost efficiency decreased year on year because the decline in revenue outstripped the decrease in staff numbers and costs.
Andri Hõbemägi
Nordecon AS
Head of Investor Relations
Tel: +372 6272 022
Email: andri.hobemagi@nordecon.com
www.nordecon.com
