2011-11-02 07:30:00 CET
2011-11-02 07:30:10 CET
REGULATED INFORMATION
SRV Yhtiöt Oyj - Interim report (Q1 and Q3)
SRV's order backlog grew to a record level - SRV's Interim Report 1 January - 30 September 2011
Espoo, Finland, 2011-11-02 07:30 CET (GLOBE NEWSWIRE) -- SRV GROUP PLC
INTERIM REPORT 2 September 2011, 8.30 a.m. EET
Reporting period 1 January-30 September 2011 in brief:
-- SRV's revenue was EUR 405.5 million (EUR 326.3 million in January-September
2010), change +24.3%
-- Operating profit was EUR 0.9 million (EUR 6.6 million), change -86.3%
-- Loss before taxes was EUR 1.6 million (profit of EUR 3.8 million)
-- The order backlog at the close of the review period was EUR 862.3 million
(EUR 604.4 million), change +42.6%
-- New contracts EUR 615.4 million (EUR 439.9 million), change +39.9%
-- The equity ratio was 30.9 per cent (35.1%)
-- Earnings per share were EUR -0.07 (EUR 0.09)
Third quarter 1 July-30 September 2011 in brief:
-- Revenue was EUR 136.3 million (EUR 115.2 million in July-September 2010)
-- Operating profit was EUR 0.2 million (EUR 3.5 million)
-- Loss before taxes was EUR 1.5 million (profit of EUR 3.8 million)
-- Earnings per share were EUR -0.06 (profit of EUR 0.08)
The interim report has been prepared in accordance with IAS 34. The disclosed
information is unaudited.
Outlook for 2011
SRV adjusts its outlook for the last quarter of 2011 regarding operational
profitability. Revenue for the year 2011 is estimated to total EUR 650 million
(EUR 484.4 in January-December 2010). Profitability of both domestic and
international operations is estimated to improve during the second half of the
year compared to the first half of 2011. Profit before taxes for the fourth
quarter is estimated to exceed EUR 10 million and the profit for the whole year
2011 is expected to exceed the previous year's level (EUR 7.9 million).
The President and CEO Jukka Hienonen comments on SRV's result:
In the first four months of the year, we have witnessed swings of sentiment in
the global economy, which have also been partly reflected in our industry. In
the early part of the year, there were many encouraging signs of recovery from
the recession. In the construction industry, housing construction was already
buoyant and in business premises construction, too, a positive turn was
perceptible.
News on the state of the euro area has become more volatile as autumn advances.
Nevertheless, housing sales are on a fairly reasonable level and new start-up
decisions are being made both in SRV and in other construction companies.
Start-up criteria, however, have tightened to some extent.
SRV currently has a record number of housing units under construction. The
2,500 housing units under construction make SRV one of the top constructors in
the Helsinki Metropolitan Area. Of this production, 85 per cent has been sold.
Most of our developer contracting production will be completed in the final
quarter. Due to the recognition practice based upon delivery, a positive impact
on our result will also be evident at that time.
The Group's order backlog is at a record high. The order backlog is strong in
domestic business premises and housing construction, but also in our
international business operations. At the site of the Pearl Plaza shopping
centre project in St. Petersburg, work advanced from the preparatory stage to
construction in September after we received a building permit.
The Kalasatama Centre project in Helsinki was initiated in August when key
contracts relating to the project were signed with the City of Helsinki. We
will build in the area throughout this decade. There are also plans to build
for the City of Helsinki a social services and health care station, business
premises and a significant number of housing units. We will be able to adjust
the pace of construction to the market situation at the time in question. We
estimate that the project will generate for SRV a total of one billion euros in
revenue during the entire construction period.
The European banking crisis has tightened up the availability of finance
generally, but particularly in the field of real-estate development. To expand
the financing potential of our Russian project development while simultaneously
diversifying our financing risks, we are, in addition to other measures,
cooperating with investment companies active in Russia. In September we
founded, in collaboration with Finnish institutions, the company Russia Invest.
The VTBC Fund, established earlier, has concluded an agreement on the purchase
of its first site in Moscow.
We have raised our revenue significantly during the first nine months of the
year. Unfortunately, volume growth has not been evident to the same degree in
our profitability. SRV's project development expertise is strong both in
Finland and in neighbouring countries. To improve our profitability structure,
we will increase the proportion of developer contracting projects in our
business operations. In Finland and Russia, we have a number of substantial
development projects which have already been launched or will be initiated in
the near future.
Markets and general review
The positive development with regard to SRV's revenue and order backlog
continued in early 2011. SRV's order backlog increased by 42.6 per cent to EUR
862.3 million, which is an all-time high for the Group.
In Finland, the competition for new orders for business premises is fierce.
SRV's volume of construction of business premises has remained at a good level.
However, there is pressure to maintain profitability, as the order backlog
consists mainly of contracting activity with a lower profit margin. In
addition, construction costs have clearly gone up, particularly in business
premises construction, but due to increase in market unstability the trend have
already turned into decline. In order to improve profitability, SRV aims to
shift the emphasis onto the company's own project development.
The market development in domestic housing construction has continued the
positive progress. SRV has increased the production of both rental and
owner-occupied housing. The total amount of SRV's housing production under
construction grew to 2 504 residential units. 85 per cent of production under
construction have been sold, 63 per cent of production are rental or
right-of-occupancy units. The number of developer contracting housing projects
currently under construction grew to 811 residential units. Based on
premarketing, the decision on the start-up of 172 additional units has been
made. In total, SRV sold 382 residential units to consumers and investors (in
comparison to 361 units in January-September 2010). Developer contracting
housing production is recognised upon delivery thus affecting more the last
quarter of the year.
The financial and real-estate markets in Russia are recovering. SRV seeks to
utilizes the market potential in Russia by developing developer contracting
real estate projects. In order to strengthen financial reserves a stakeholders'
agreement between SRV, Ilmarinen, Sponda, Etera and Onvest concerning an
investment company Russia Invest was signed in September. In addition to
continuing the development of its key projects, SRV seeks growth potential by
focusing its efforts on the preparation of the first phase investment
commitments of the VTB-Ashmore property fund. The fund has signed an agreement
to purchase the first property in Moscow.
Amongst the key international projects, the implementation of the Pearl Plaza
shopping centre project in St. Petersburg was confirmed in January, when the
investment decision for the site and the EUR 100 million development contract
with SRV were signed.
SRV's own project development operations enhance the company's potential to
increase its operating volume. Projects require long-term development work and
are carried out over the course of several years. SRV's projects are often
so-called landmark projects - innovative new solutions for the needs of
sustainable regional construction. Such projects include, for example, the
Keilaniemi Towers housing project, the development project for the vicinity of
the Niittykumpu metro station in Espoo, and, as the most recent addition, the
Kalasatama development project in Helsinki.
Group key figures IFRS IFRS IFRS IFRS IFRS
(EUR million) 1-9/ 1-9/ change, change 7-9/ 7-9/ 1-12/
2011 2010 MEUR ,% 2011 2010 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue 405.5 326.3 79.2 24.3 136.3 115.2 484.2
Operating profit 0.9 6.6 -5.7 -86.3 0.2 3.5 12.5
Financial income and -2.5 -2.8 0.3 -1.7 0.3 -4.5
expenses, total
Profit before taxes -1.6 3.8 -5.4 -141.1 -1.5 3.8 7.9
Order backlog 862.3 604.6 257.7 42.6 594.5
New agreements 615.4 439.9 175.6 39.9 304.6 112.6 559.9
Operating profit, % 0.2 2.0 0.2 3.0 2.6
Net profit, % -0.7 0.9 -1.4 2.4 1.1
Equity ratio, % 30.9 35.1 35.2
Net interest bearing 269.6 229.7 222.8
debt
Gearing, % 167.4 147.9 141.7
Return on investment, % 1.4 3.2 4.1
1)
Return on equity, % 1) -2.4 2.3 3.2
Earnings per share, EUR -0.07 0.09 -0.06 0.08 0.19
Equity per share, EUR 4.44 4.47 4.56
Weighted average number 34.9 33.9 2.7 33.9
of shares outstanding
1. In calculating the key ratio only the profit for the period has been
annualised
The Group revenue increased especially as the result of the favourable
development in the volume of domestic housing construction. The decline in the
operating profit was influenced by the weakened profitability of commercial
construction brought on by a lower order backlog profit margin and higher
construction costs, as well as losses generated by international business
operations. Project development expenses also grew from the reference period.
The Group's order backlog grew on account of the increased order backlog of
international and domestic housing construction.
The Group's revenue for the third quarter grew thanks to the favourable
development in the residential construction in Finland. Profitability of the
business operations in Finland was influenced by the weakened profitability of
commercial construction brought on by a lower order backlog profit margin.
Disclosure procedure
SRV Group Plc follows from now on the disclosure procedure enabled by Standard
5.2b published by the Finnish Financial Supervision Authority and hereby
publishes its Interim Report for January-September 2011 enclosed to this stock
exchange release. SRV's Interim Report for January-September 2011 is attached
to this release in pdf format and is also available on the Group's website at
www.srv.fi.
Espoo 1 October 2011
Board of Directors
SRV Group Plc
Taneli Hassinen
Director, Communications and Marketing
For further information, please contact:
Jukka Hienonen, CEO, Tel. +358 201 455 213
Hannu Linnoinen, Senior Executive Vice President, CFO, Tel. +358 201 455 990 or
+358 50 523 5850
Taneli Hassinen, Director Communications, Tel. +358 201 455 208 +358 40 504 3321
© 2024 Nasdaq, Inc. All Rights Reserved |