Published: 2015-04-29 09:50:41 CEST
Merko Ehitus
Minutes of annual general meeting

Resolutions of the annual general meeting

Tallinn, Estonia, 2015-04-29 09:50 CEST --  

 

The general meeting of shareholders of AS Merko Ehitus was held on April 29th 2015 and the following decisions were made:

1. Approval of the annual report of the year 2014 and overview of the financial results and the prospective of the on-going year

The general meeting of shareholders decided to approve the annual report of the year 2014 and take note of the Management Board’s overview of the financial results and prospective outlooks of the on-going year.

Comment from the Management Board

Given the unsettled conditions, we can be quite satisfied with the results for 2014 – especially improved profitability, growth in sales in Latvia and Lithuania and apartment sales in Estonia. Yet the volume of new construction contracts on the Baltic market has gradually declined since 2014, particularly in the field of civil engineering, due to the decrease in European Union funded projects. In addition, slow economic growth and low investor confidence is dampening private sector initiative in commercial real estate development; often developers have a shortage of equity. This results in a longer construction project preparation times and has a negative impact on the volume of contracts for office, retail, production and other commercial buildings.

The construction market’s growth prospects depend largely on how rapidly new public procurements can be launched. We forecast a moderate rebound in this area starting in 2016. Because of the drop in state contract volumes, our priorities in all three Baltic states are pursuing good cooperation with private customers, offering them high-quality, optimum construction solutions, an efficient construction process, and the certainty that projects will be completed on schedule. In 2015, we see growth opportunities in Lithuania, and expect procurement volumes to stay on par in the field of electrical construction, as these contracts depend on investments made by the transmission system operator and distribution grid companies.

After the last three years of fast growth, the Baltic apartment market is showing signs of stabilisation. Demand remains high for good living environments and high-quality residential construction, and we continue to deliver to our customers in this regard. The apartment market is also supported by low interest rates, relatively stable construction prices and growth in the population’s personal savings. As a result, the residential construction remains in our focus, and this year we plan to invest 45-50 million euros into development projects in the Baltic states.

The lower order volumes, the pressure of price competition on profit margins and increased contractual risks will be reflected in the results for 2015 and 2016. As demand on the Baltic construction market will continue to be muted for the next few years, construction companies will find cost-effectiveness and flexibility to be increasingly important in responding to changes in the market situation.

2. Proposal on distribution of profits

The general meeting of shareholders decided to:

  1. approve the net profit for the year 2014 as EUR 12,416,623;
  2. pay the shareholders the total amount of EUR 7,257,000 as dividends from net profit brought forward, which totals to EUR 0.41 per share;
    shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2014, at 23.59, will be entitled to dividends;
    dividends will be paid to the shareholders on May 26th 2014 by transferring the amount concerned to shareholder’s bank account, linked to security account;
  3. the outstanding net profit will not be distributed.

3. Proposal on reduction of share capital

Considering the perspectives of the Baltic construction market in the coming years and the related need for capital by Merko Ehitus group, the share capital would be reduced in order to improve the group’s capital structure and support return on equity. AS Merko Ehitus lacks the need to possess share capital in the existing amount and the requirements that legislation imposes on share capital will also be fulfilled in the case of the reduced share capital.

Based on the above, the general meeting of shareholders decided to:

  1. reduce the share capital of the public limited company by EUR 4,071,000 from the current EUR 12,000,000 to EUR 7,929,000
  2. share capital will be reduced by way of reducing the book value of the shares by EUR 0.23 from the current EUR 0.677966 to EUR 0.447966;
    the number of shares will remain the same – 17,700,000 shares;
  3. pursuant to the articles of association of Merko Ehitus, the minimum share capital of the company is EUR 6,000,000 and the maximum share capital is EUR 24,000,000;
    after the registration of the reduction of share capital in the Commercial Register the new share capital will amount to EUR 7,929,000 which is in line with the company’s articles of association consisting of 17,700,000 shares, each with a book value of EUR 0.447966;
  4. shareholders, entered into the share register of AS Merko Ehitus on May 22nd 2015, at 23.59, will be entitled to the monetary payments from the reduction of share capital;
  5. the monetary payments to the shareholders in the amount of EUR 0.23 per share, related to the reduction of share capital shall be made within the period prescribed by law, i.e. latest within 3 (three) months after the registration of the reduction of share capital in the Commercial Register.

4. Appointment of auditor for the financial years of 2015-2017

The general meeting of shareholders decided to appoint AS PricewaterhouseCoopers the auditor of AS Merko Ehitus for the financial years of 2015 through 2017 and to pay to the auditing company for auditing as per contract to be entered into with AS PricewaterhouseCoopers.

 

The 2014 annual yearbook of AS Merko Ehitus and the presentation used by the Mangement Board at the general meeting of shareholders are enclosed to the current announcement.

 

Andres Trink
Chairman of the Management Board
AS Merko Ehitus
+372 650 1250

andres.trink@merko.ee

 

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.


Merko_Ehitus_Yearbook_2014.pdf
Merko_Ehitus_AGM_presentation_29_04_2015.pdf