2011-02-17 07:30:00 CET
2011-02-17 07:30:10 CET
REGULATED INFORMATION
SRV Yhtiöt Oyj - Financial Statement Release
SRV'S ORDER BACKLOG GREW BY 23.3 PER CENT - SRV'S FINANCIAL STATEMENT RELEASE 1 JANUARY - 31 DECEMBER 2010
Espoo, Finland, 2011-02-17 07:30 CET (GLOBE NEWSWIRE) -- SRV GROUP PLC
FINANCIAL STATEMENT RELEASE 17 February 2011, 8.30 a.m. EET
Reporting period 1 January-31 December 2010 in brief:
-- SRV's revenue was EUR 484.8 million (EUR 390.5 million in January-December
2009), change 24.2%
-- Operating profit was EUR 13.0 million (EUR 10.7 million), change 21.7%
-- Profit before taxes was EUR 7.6 million (EUR 6.5 million), change 16.5%
-- The order backlog at the close of the review period was EUR 593.7 million
(EUR 481.6 million), change 23.3%
-- New contracts EUR 559.9 million (EUR 396.1 million), change 41.4%
-- The equity ratio was 35.1 per cent (41.3%)
-- Earnings per share were EUR 0.19 (EUR 0.08)
-- Proposed dividend EUR 0.12 (EUR 0.12) per share
Fourth quarter 1 July - 30 December 2010 in brief:
-- Revenue amounted to EUR 157.2 million (EUR 120.1 million in October -
December 2009)
-- Operating profit was EUR 5.7 million (EUR 2.7 million)
-- Profit before taxes was EUR 4.1 million (EUR 2.2 million)
-- Earnings per share were EUR 0.10 (EUR 0.03)
“Our outlays on business premises and housing construction in Finland have
produced results. SRV's order backlog grew by 23 per cent to EUR 594 million.
The volume of new contracts grew by 41 per cent.
SRV's Business Premises had excellent success in acquiring customers and its
order backlog was up 27 per cent. The growth of the order backlog proves that
SRV's open operating model, robust expertise in implementation, reputation as a
reliable construction firm and committed employees support new customer
acquisition also in a tight market situation. Thanks to increased operating
volumes, we have been able to keep the profitability of our business operations
on a good level.
SRV's housing production focuses on growth centres, where the migration of the
population and structural demand lay a strong foundation for expanding
operations. During the past year, we bolstered our position as a residential
constructor and became a major player in housing production. In 2010, we
started the construction of 543 developer contracting housing units (251 in
January - December 200) and sold 524 units to consumers (207). At the end of
2010, SRV had a total of 1629 residential units under construction (966 units
in December 2009), of which 605 were developer contracting units and 1024 were
built under contract agreements or negotiation contracts. Moreover, thanks to
the positive response to premarketing, SRV had decided to start the
construction of 104 housing units.
Russia is the main focus area in SRV's strategy. During 2010, we focused our
effors on the start-ups of our key projects. In January, after the close of the
financial period, we signed 100 million euro project management contract to
build a shopping centre in St.Petersburg in the Baltic Pearl area. The total
value of the investment is EUR 130 million. SRV has a 50 per cent stake in the
project. As in other projects in Russia, SRV can remain, according to its
strategy, a temporary owner in completed projects to increase the commercial
value. Depending on the market situation, such projects are sold after 1 to 3
years after completion. Commencing the construction works of Pearl Plaza is a
significant step in our Russian projects.
The financial result of the international operations was negative due to the
fact that the volume of the operations and the order backlog were on
insufficient level compared to the project development costs and fixed costs of
the segment. SRV will continue its efforts in start-ups of its own key projects
and in preparing the first investment projects of the real estate investment
collaboration to secure the growth of the order backlog of international
operations.
SRV boasts strong innovative project development, and we will continue our
efforts on it by utilising the support from the company's solvency and
financing position. Even though the business premises market is challenging, I
believe that through project development SRV can start projects that are
important to the business activities of our clients. As an example of
successful result of persistence we can mention the Karisto shopping centre
project in Lahti, the construction contract for which was signed in June.
In domestic housing production we focus on growth centres. We have created
numerous major long-term possibilities in the Greater Helsinki Area, such as
the Keilaniemi Towers project, the project for planning the land use of the
neighbouring areas of the future metro station in Niittykumpu district in
Espoo, the acquisition of the Perkkaa plots from Siemens in Espoo, as well as
participation in Sitra's Low2No project with the aim to develop and implement a
solution for the construction of low carbon or no-carbon sustainable urban
environments,” says Jukka Hienonen, CEO of SRV.
Group key figures IFRS IFRS IFRS IFRS
(EUR million) 1-12/ 1-12/ change, change 10-12/ 10-12/
2010 2009 MEUR ,% 2010 2009
--------------------------------------------------------------------------------
Revenue 484.8 390.5 94.3 24.2 157.2 120.1
--------------------------------------------------------------------------------
Operating profit 13.0 10.7 2.3 21.7 5.7 2.7
Financial income and -5.4 -4.2 -1.2 29,8 -1.6 -0.5
expenses, total
Profit before taxes 7.6 6.5 1.1 16.5 4.1 2.2
Order backlog 593.7 481.6 112.1 23.3
New agreements 559.9 396.1 163.8 41.4 120.1 120.4
Operating profit, % 2.7 2.7 3.6 2.2
Net profit, % 1.1 0.7 1.5 0.8
Equity ratio, % 35.1 41.3
Net interest bearing debt 220.9 179.9
Gearing, % 140.6 109.8
Return on investment, % 4.0 4.9
Return on equity, % 3.2 1.8
Earnings per share, EUR 0.19 0.08 0.10 0.03
Equity per share, EUR 4.55 4.48
Weighted average number of 33.9 36.0 -5.8
shares outstanding
1) In calculating the key ratio only the profit for the period has been
annualised
Consolidated revenue was EUR 484.8 million (EUR 390.5 million in
January-December 2009), of which Finland accounted for 95 per cent (94%) and
Russia and the Baltic countries for 5 per cent (6%). Revenue in the Business
Premises business area was EUR 319.5 million (EUR 208.0 million). Revenue in
the Housing business area was EUR 143.1 million (EUR 158.6 million). Revenue in
the International business area was EUR 22.3 million (EUR 24.0 million).
The Group's operating profit was EUR 13.0 million (EUR 10.7 million in
January-December 2009). Operating profit margin was 2.7 per cent (2.7%).
Operating profit in the Business Premises business area was EUR 18.0 million
(EUR 18.0 million). Operating profit in the Housing business area was EUR 8.4
million (EUR 5.4 million). Operating loss in the International business area
was EUR 7.5 million (operating loss of EUR 7.7 million).
The Group's profit before taxes was EUR 7.6 million (profit of EUR 6.5 million
in January-December 2009). The profit for the financial year was EUR 5.2
million (profit of EUR 2.9 million). Earnings per share were EUR 0.19 (EUR
0.08). Return on equity was 3.2 per cent (1.8%) and return on investment was
4.0 per cent (4.9%).
The Group's revenue for the fourth quarter was EUR 157.2 million (EUR 120.1
million in October-December 2009) and operating profit EUR 5.7 million (EUR 2.7
million). Profit before taxes was EUR 4.1 million (profit of EUR 2.2 million).
Earnings per share were EUR 0.10 (EUR 0.03).
The order backlog grew by 23.3 per cent and was EUR 593.7 million on 31
December 2010 (EUR 481.6 million on 31 December 2009). The major reason behind
the development of the order backlog was the 41.4 per cent increase of new
contracts and the principle of the recognition of revenue from developer
contracting housing projects based upon delivery. The share of sold order
backlog increased by 39.3 per cent to EUR 441 million (EUR 317 million on 31
December 2009). The increase was due to the amount of new projects as well as
to the fact that the housing sales concentrated more on production under
construction. The share of the unsold order backlog amounted to EUR 153 million
(EUR 165 million on 31 December 2009).
Key figures for the Segments
IFRS IFRS IFRS IFRS
Revenue 1-12/ 1-12/ change, change, 10-12/ 10-12/
(EUR million) 2010 2009 MEUR % 2010 2009
--------------------------------------------------------------------------------
Business 319.5 208.0 111.5 53.6 103.2 66.9
Premises
--------------------------------------------------------------------------------
Housing 143.1 158.6 -15.4 -9.7 44.2 49.9
International 22.3 24.0 -1.7 -7.0 9.8 3.4
Other 10.3 8.7 1.6 18.9 2.8 2.3
Operations
Eliminations -10.4 -8.8 -1.7 -2.8 -2.3
Group, total 484.8 390.5 94.3 24.2 157.2 120.1
IFRS IFRS IFRS IFRS
Operating 1-12/ 1-12/ change, change, 10-12/ 10-12/
profit 2010 2009 MEUR % 2010 2009
(EUR million)
--------------------------------------------------------------------------------
Business 18.0 18.0 0.0 0.0 4.5 4.3
Premises
--------------------------------------------------------------------------------
Housing 8.4 5.4 3.0 55.0 3.9 1.9
International -7.5 -7.7 0.2 -1.0 -2.0
Other -5.9 -4.7 -1.2 -2.0 -1.4
Operations
Eliminations 0.0 -0.3 0.3 0.2 -0.2
Group, total 13.0 10.7 2.3 21.7 5.7 2.7
Operating profit IFRS IFRS IFRS IFRS
(%) 1-12/2010 1-12/2009 10-12/2010 10-12/2009
---------------------------------------------------------------
Business Premises 5.6 8.6 4.4 6.5
---------------------------------------------------------------
Housing 5.9 3.4 8.8 3.8
International -33.5 -32.1 -9.8 -58.4
Group, total 2.7 2.7 3.6 2.2
Order backlog IFRS IFRS
(EUR million) 31.12.10 31.12.09 change, MEUR change,%
------------------------------------------------------------------
Business Premises 324.6 255.3 69.3 27.1
------------------------------------------------------------------
Housing 249.9 201.7 48.2 23.9
International 19.2 24.6 -5.4 -21.9
Group, total 593.7 481.6 112.1 23.3
- sold order backlog 441 317 125 39.3
- unsold order backlog 153 165 -12 -7.5
Earnings trends of the Segments
IFRS IFRS IFRS IFRS
Business 1-12/ 1-12/ change, change, 10-12/ 10-12/
Premises 2010 2009 MEUR % 2010 2009
(EUR million)
--------------------------------------------------------------------------------
Revenue 319.5 208.0 111.5 53.6 103.2 66.9
--------------------------------------------------------------------------------
Operating 18.0 18.0 0.0 0.0 4.5 4.3
profit
Operating 5.6 8.6 4.4 6.5
profit, %
Order backlog 324.6 255.3 69.3 27.1
The Business Premises business area comprises SRV Toimitilat Oy's retail,
office, logistics and rock construction operations and property development.
Revenue in the Business Premises business area was EUR 319.5 million (EUR 208.0
million). Operating profit was EUR 18.0 million (EUR 18.0 million), generating
an operating profit margin of 5.6 per cent (8.6%). The order backlog grew by
27.1 per cent to EUR 324.6 million (EUR 255.3 million). The increase in revenue
was attributable to the growth in the contracts and the order backlog.
Fourth-quarter revenue amounted to EUR 103.2 million (EUR 66.9 million) and
operating profit to EUR 4.5 million (EUR 4.3 million). The increase in revenue
was attributable to the growth in the contracts and the order backlog.
Competition for new contracts remained tight.
Among the projects completed during the financial year were extension and
renovation of the Stockmanns' Helsinki department store, the construction of
the new Viikki parking garage and air raid shelter as well as the new logistics
centre for Anttila Oy in Kerava. Moreover, the completed projects included the
renovation of the shopping centre Forum in Jyväskylä, the first phase of Malmi
Hospital in Helsinki, the renovation of Kiinteistö Oy Niittymäentie 7 for
Ilmarinen Mutual Pension Insurance Company in Espoo, alteration and renovation
works in the mail sorting department of Itella's postal centre in Pasila,
Helsinki, as well as the repair works on the second stage of the University of
Helsinki's Metsätalo Building and the adjacent service tunnel in Unioninkatu,
Helsinki. The new equestrian centre Primus in Espoo, the bus depot in Kivikko,
Vantaa, the renovation and building of Mercuria business school in Vantaa, and
a new production building for Lassila & Tikanoja in Kerava were also completed.
The construction of Vierumäki Congress & Resort Hotel was completed and handed
over to Mutual Pension Insurance Company Varma.
In January, SRV signed a contract for the construction of the spa hotel Holiday
Club Saimaa in Lappeenranta. In addition to the hotel, the contract includes an
aqua park with a wellness area, a restaurant world and a multifunction ice
arena. The spa hotel will be completed in the summer of 2011.
In January, SRV and the Finnish Fair Corporation signed a contract for the
heightening of the Helsinki Fair Centre's car park, expanding it by
approximately 1,200 new parking spaces.
In February, Citycon Oyj chose SRV as its project management contractor for the
construction and renovation of Espoontori shopping centre. The total floor area
of the project is about 18,600 square metres.
In February, SRV and Helsinki University Premises and Property Services signed
a project management contract on the construction and renovation of the
Kaisa-talo building, a shopping centre in Kaisaniemenkatu, Helsinki, which will
be converted into the University's central campus library. This 30,740 square
metre project will be completed by 1 May 2012.
In June, SRV and Kesko signed the project management contract for the
construction of the shopping centre Karisma to be built in the Karisto district
in Lahti. SRV and Kesko have jointly developed the project and SRV will act as
the main contractor in the project. The total sales area in the shopping centre
is 35,000 square meters including a modern K-Citymarket and some 90 shops. The
shopping centre will open for Christmas 2011.
In July, SRV and Aro-Yhtymä Oy signed a project management contract for the
construction of a car dealership in Vantaa. The building will measure 18,400
gross square metres and will be completed towards the end of 2011.
In October, SRV sold the STC Viinikkala property to Pohjola Insurance Ltd. STC
Viinikkala is a logistics centre developed and built by SRV with 10,000 square
metres of modifiable warehouse, production and office space. The project will
be completed by the end of September 2011.
In November, Holiday Club Resorts Oy and SRV agreed on the construction of
holiday homes. The first Villas-apartments will be completed in the Holiday
Club Saimaa spa hotel complex being built in Lappeenranta next year. As a
whole, Holiday Club Saimaa is the biggest tourism project under construction in
the Nordic countries.
In December, SRV and Keva (Local Government Pensions Institution) signed a
contract for the construction of rental apartments to be built on Abraham
Wetterintie street in the Herttoniemi district of Helsinki. Six high-rise
buildings will include a total of 345 apartments, commercial premises and
basement parking. The total floor area of the project totals 42,386 square
metres. The project will be completed in autumn 2012.
During the financial year, a project and construction contract was signed for
the construction of a logistics centre for Tapiola General Mutual Insurance
Company on Tuupakantie in Vantaa. Contracts were also signed with the City of
Vaasa for the construction of day-care centre Punahilkka in Vaasa, for the
construction of new car service and repair premises for ScanAuto in
Hämeenlinna, the renovation of the premises of the European Chemicals Agency in
Annankatu, Helsinki. Moreover, SRV signed a contract with the City of Hyvinkää
on the construction of new premises for the Hyvinkää town hall in the Old Wool
Factory. Contracts were also signed with the Helsinki University Premises and
Property Services for the completion of the renovation of the Institute of
Dentistry and the renovation of the Accelerator Laboratory on the Kumpula
campus, for the construction of a K-supermarket for Ruokakesko in Espoo and for
the extension works of an aviation service hangar at the Helsinki-Vantaa
airport.
In a completion arranged by Rakennuslehti magazine SRV's Helsinki Music Centre
was elected as the best construction site in Finland in 2010. In its arguments
the professional jury praised SRV's solid working methods and site management.
Also the work safety at the Music Centre construction site is of the highest
level. SRV has put extensive efforts into fighting grey economy, as well, and
the Music Centre site has been a pilot site in implementing the SRV network
register.
IFRS IFRS IFRS IFRS
Housing 1-12/ 1-12/ change, change, 10-12/ 10-12/
(EUR million) 2010 2009 MEUR % 2010 2009
--------------------------------------------------------------------------------
Revenue 143.1 158.6 -15.4 -9.7 44.2 49.9
--------------------------------------------------------------------------------
Operating 8.4 5.4 3.0 55.0 3.9 1.9
profit
Operating 5.9 3.4 8.8 3.8
profit, %
Order backlog 249.9 201.7 48.2 23.9
The Housing business area comprises housing construction in the Helsinki
Metropolitan Area and the neighbouring municipalities, in addition to regional
business operations. Besides housing, regional business operations include
commercial, business premises and logistics construction projects.
Revenue in the Housing business area amounted to EUR 143.1 million (EUR 158.6
million) in the review period and operating profit was EUR 8.4 million (EUR 5.4
million). The order backlog was EUR 249.9 million (EUR 201.7 million). The
decline in revenue was attributable to the focus on developer contracting
housing projects and the fact that housing sales concentrated more on
production under construction. For the developer contracting housing projects
SRV applies the recognition principle based upon delivery. By using the earlier
percentage of completion method the revenue for the review period would have
been around EUR 21.1 million higher. During the financial year construction of
543(251) residential units was started and 201 residential units (252) were
completed during the financial year. Growth in operating profit was
attributable to better project results compared to previous year.
Fourth-quarter revenue amounted to EUR 44.2 million (EUR 49.9 million) and
operating profit to EUR 3.9 million (EUR 1.9 million). Housing sales
concentrated more on production under construction. Increase in revenue and
operating profit during the quarter resulted from the completion of four
developer contracting projects with a total of 171 (64) residential units.
During the financial year we signed contracts worth EUR 75.7 million with
external clients. Of the signed contracts, negotiation contracts amounted to
EUR 19.9 million; in these contracts, SRV serves as project developer and in
addition to construction attends to certain development tasks. A contract was
signed with Scan-Auto for the construction of a new Scania centre in Oulu for
servicing large vehicles. The project was completed before the year's end. We
signed a contract with YH-Asumisoikeus Länsi Oy for the construction of 28
right-of-occupancy flats in the Vatiala district in Kangasala and 20 flats in
Pirkkala. In Ylöjärvi, SRV will build two blocks of flats housing a total of 40
residential units for AVO Vuokratalot Oy. Moreover, 28 flats in terraced houses
will be built for Suomen Asumisoikeus Oy in Kaarina.
Contracts worth EUR 55.8 million that were won through bidding competitions
were signed. The major contracts in the Helsinki metropolitan area were for a
66-unit apartment house to be built for VVO on Agronominkatu street in Viikki,
Helsinki, for a 58-unit apartment house for Asokodit in Suurpelto, Espoo and an
assisted-living building for Espoon Kruunu in Kauklahti, with 62 adjacent
housing units. In Paattinen, Turku, construction of a school for the city of
Turku was commenced. In Tampere, an assisted-living home is being built for
Kotilinna-säätiö, with 76 units.
More resources were allocated to developing contracting projects. During the
review period, 543 (251) new housing units were qualified for sale to consumers
and were included in the order backlog. In Helsinki, SRV will build the HITAS
project Isolokki in Arabianranta (142 price and quality controlled
owner-occupied flats) and Tampuriini in Kannelmäki (29-unit apartment house).
In Espoo, SRV started up Saunavuori, an apartment house with 57 units in
Saunalahti, and Espoon Kokki, an apartment house with 78 units in Matinkylä.
Espoon Kokki will be erected next to the Iso Omena shopping centre and the new
metro station to be built in Matinkylä. In Vantaa, construction of two
high-rise buildings (Mortti with 38 homes and Vertti with 47 homes) was started
on a plot next to the Martinlaakso train station. One apartment house and three
terraced-house projects were started in Pirkanmaa: apartment house Teravaskanto
in Kangasala (32 units), Pirkkalan Sinisiipi (26 units), Nokian Walborg (16
untis) and Tampereen Frida (11 units). SRV builds Sello, a 26-unit apartment
house, in Kaarina as well as Kirkkoväärti, a 21-unit apartment house in
Vaajakoski, Jyväskylä. The first five homes in the 20-unit terraced-house
project Marjalan Saunaranta were completed in Joensuu already during the
financial year.
In addition to projects that are qualified for sale, SRV has decided to start
the construction of high-rise blocks in Kaarina, Lahti, Saarijärvi and in
Ylöjärvi. The projects include 104 housing units. Because the projects did not
reach RS-stage by the end of the year they are not included in the order
backlog.
Housing production in Finland 1-12/ 1-12/ change, 10-12/ 10-12/
2010 2009 units 2010 2009
Developer contracting
--------------------------------------------------------------------------------
Start-ups 543 251 292 133 247
Sold 524 207 317 163 86
Completed 201 252 -51 171 64
Completed and unsold 137 171 -34
Under construction, total 1) 2) 1 629 966 663
- negotiation and construction 1 024 703 321
contracts 1) 2)
- developer contracting 1) 605 263 342
- of which unsold 1) 284 231 53
1)at the end of the period
2) housing contracts of SRV Business Premises Ltd are included in the
production under construction
The S-Group's Kodin Terra hardware and home decor department store and ABC
service station in the Kolmenkulma business estate in Nokia were completed in
late spring. Major developer contracting projects under construction include
Martti, Mortti and Vertti in the Martinlaakso district of Vantaa (152 units),
Isolokki in Arabianranta, Helsinki (142 units) and Kokki in Matinkylä, Espoo
(78 units).
SRV increased significantly its housing production and at the close of the
financial year SRV had a total of 1629 residential units under construction. 83
per cent of the production under construction was implemented under building
contracts or they were our own production which had already been sold. During
the financial year, SRV started the construction of 543 (251) developer
contracting residential units. SRV sold 524 (207) housing units to consumers,
most of them in projects under construction. With negotiation contracts, 116
(323) units were sold to investors. At the end of the period, 605 (263)
residential units for sale to consumers were being constructed, 284 (231) of
which had not been sold. There were 137 (171) completed but unsold units, 22 of
which were rented at the period-end. A total of 201 (252) developer contracting
residential units were completed during the review period. The most significant
completed projects included apartment building Musketööri which was completed
in Kartanonkoski, Vantaa in December and Rubiini with 43 units in Vallikallio,
Espoo. Based on the current completion schedules, SRV estimates that a total of
465 developer contracting residential units will be completed during 2011 of
which 67 units during the first quarter.
SRV is participating in the Low2No project, which aims to develop and implement
a solution for the construction of low carbon or no-carbon sustainable urban
environments in order to minimise energy consumption. This project is partly
funded by Tekes. In addition to SRV, the participants include Sitra (the
Finnish Innovation Fund), VVO Yhtymä Oyj and an international design team that
was selected in a sustainable construction competition in 2009. The City of
Helsinki has reserved a city block for Sitra in Jätkänsaari that will be built
in line with the Low2No concept. The housing units and business premises in
this block will be designed as multipurpose environments that serve changing
work and life patterns, making use of innovative environment, layout and
service planning.
IFRS IFRS IFRS IFRS
International 1-12/ 1-12/ change, change, 10-12/ 10-12/
Operations 2010 2009 MEUR % 2010 2009
(EUR million)
--------------------------------------------------------------------------------
Revenue 22.3 24.0 -1.7 -7.0 9.8 3.4
--------------------------------------------------------------------------------
Operating profit -7.5 -7.7 0.2 -1.0 -2.0
Operating profit, -33.5 -32.1 -9.8 -58.4
%
Order backlog 19.2 24.6 -5.4 -21.9
International Operations comprises the business activities of the SRV
International subgroup in Russia and the Baltic countries.
Revenue in the International business area was EUR 22.3 million (EUR 24.0
million). Operating loss was EUR 7.5 million (a loss of EUR 7.7 million). The
order backlog was EUR 19.2 million (EUR 24.6 million). The revenue level was a
result of the small number of projects under construction while the activities
were focused on the development of our own projects in Russia, in particular.
In addition to the small number of projects under construction, operating
profit was affected by the development costs of developer contracting projects
and the fixed costs of business operations. Furthermore cost entries of around
EUR 2.0 million were recorded. They related to projects which were completed
earlier and to inventories.
Fourth-quarter revenue amounted to EUR 9.8 million (EUR 3.4 million) and
operating loss to EUR 1.0 million (loss of EUR 2.0 million). Commenced hotel
renovations increased the revenue. In addition to the small number of projects
under construction, operating loss was affected by the development costs of
developer contracting projects, the fixed costs of business operations and to
cost entries totalling around EUR 1 million relating to inventories.
Russia
The official opening ceremonies of Etmia II office and parking house project in
the heart of Moscow were arranged during the financial year. More than 90 per
cent of the facilities are leased and SRV is negotiating with several tenant
candidates for the rest of the premises. SRV's role in the project is to act as
co-owner with a 50 per cent stake and as the project management contractor.
During the review period, SRV had a particular focus on the analysis and
clarification of the investment sites of VTBC-Ashmore Real Estate Partners I in
Moscow. The fund primarily invests in the construction of offices, commercial
premises, hotels and upscale housing in Moscow and St. Petersburg. SRV's share
of the investment commitments in the first phase is EUR 20 million. During the
spring, Deutsche Bank announced its wishes to withdraw from its position in the
General Partner company due to tightened bank control regulations. Deutsche
Bank has been replaced with Ashmore Group Plc ("Ashmore"), which also became a
shareholder in the General Partner company and, together with various funds it
manages, a Limited Partner investor. The other investors involved in the fund
are VTB Capital and the Finnish pension insurance companies Ilmarinen and
Etera. VTB Capital and Ashmore act as sponsors and general partners of the
fund. Their tasks include identifying investments and arranging financing for
the projects. SRV acts both as an investor and project management contractor
with respect to the fund, through which it expects to receive at least EUR 200
million worth of construction contracts. The fund is currently primarily
analysing Elite residential sites as well as office, commercial and hotel sites
in the heart of Moscow.
During the review period, SRV continued the development of the shopping centre
to be built on the Baltic Pearl area in St.Petersburg. SRV and Shanghai
Industrial Investment Company (SIIC) established a joint project company, OOO
Pearl Plaza, to develop the project. SRV's share of the joint venture is 50 per
cent. SRV is responsible for the development and construction of the project.
During the review period, SRV signed a project management contract with OOO
Pearl Plaza for the design and development of the shopping centre. Urban
Planning and Architectural Committee of St. Petersburg approved the conceptual
plan in November. Negotiations concerning the final investment decision were
going on at the end of the year. The shopping centre is part of the Baltic
Pearl development project, in which Baltic Pearl CJSC will use a land area of
over 205 hectares, located south-west of central St. Petersburg, for
development. This project is China's largest international investment project,
apart from oil and natural gas investments. The cornerstone laying ceremony of
the Baltic Pearl project was held at the end of September. Paavo Väyrynen, the
Finnish Minister for Foreign Trade and Development, attended the ceremony.
In the Moscow area, construction of the electrical connection for the Mytischi
shopping centre project was completed during the summer. Financing of the
project has not advanced, and implementation possibilities of alternative
concepts are being studied. The majority owner of the project is the Finnish
real estate investment company Vicus, with a 75 per cent stake. SRV owns 25 per
cent of the shopping centre project and its total investments amount to EUR 7.5
million.
At the Sheremetyevo airport in Moscow, SRV continued the renovation of the old
Aeroport hotel. In St.Petersburg, the renovation of some 200 rooms in the
Pulkovskaya Hotel began also in October. Both hotels belong to the Wenaas
Group. The projects are a continuation of the cooperation that started already
in 2007.
SRV continued the development of the Septem City project which is located on a
8.5 hectare land area in the Ohta district in St. Petersburg. The plans include
the construction of office and retail space, as well as hotel, restaurant and
entertainment premises. Moreover, facilities will be built for the IBI
University. The Urban Planning and Architectural Committee of St. Petersburg
has approved the overall concept of the project allowing the construction of
600,000 square metres. The project will be implemented in several phases. In
the first phase, a shopping centre will be built in the area. The concept
development of the shopping centre is being processed and the decision
concerning the final scope will be done in terh near future. SRV has invested
about EUR 51.8 million in acquisition of land and properties in this area;
further investment in land acquisition is estimated at about EUR 8 million. At
the moment, SRV owns 87.5 per cent of the project, but its ownership will
decline to 77.5 per cent when all ownership arrangements have been completed
according to the cooperation contract.
The development of the Eurograd logistics area in St. Petersburg continued. SRV
has 49 per cent ownership of the Russian company that possesses a plot of 24.9
hectares located north of St. Petersburg, in the immediate vicinity of the Ring
Road. Over 100,000 square metres of logistics facilities are planned for the
site, to be built in several stages during the next few years. The zoning of
the area for logistics has been completed.
In the city of Vyborg, the intensified marketing campaign for the apartments in
the Papula residential area continued till the summer. A total of 17 housing
units have been sold while 21 units remained unsold at the end of the period.
Baltic countries
Business volumes in the Baltic countries were low. In Estonia, 14 (11)
residential units were sold during the period. All in all, there were 17 (31)
completed but unsold units at the end of the period. In Estonia, the number of
staff was adjusted to the market situation.
In Latvia, the construction of the International School of Latvia commenced in
September according to the construction contract between SRV and the school
which was signed in 2009. The project start-up was postponed due to a delay in
the financing.
IFRS IFRS IFRS IFRS
Other 1-12/ 1-12/ change, change, 10-12/ 10-12/
Operations 2010 2009 MEUR % 2010 2009
(EUR million)
--------------------------------------------------------------------------------
Revenue 10.3 8.7 1.6 18.9 2.8 2.3
--------------------------------------------------------------------------------
Operating -5.9 -4.7 -1.2 -2.0 -1.4
profit
Other Operations comprise mainly the SRV Group Plc and SRV Kalusto Oy
businesses.
The revenue of Other Operations during the review period was EUR 10.3 million
(EUR 8.7 million) and operating loss was EUR 5.9 million (a loss of EUR 4.7
million). Fourth-quarter revenue was EUR 2.8 million (EUR 2.3 million) and
operating profit EUR 2.0 million (a loss of EUR 1.4 million). The increase in
revenue was attributable to higher operation volumes and the decrease in
operating profit was attributable to increased costs used for project
development.
Financing and financial position
Net operational cash flow was EUR 26.8 million negative (EUR 6.1million in
January-December 2009). The weakening of the cash flow during the review period
was attributed to the increase of inventories as a result of land investments
in the housing production and the start-ups of developer contracting
production. The Group's inventories were EUR 338.9 million (EUR 292.2 million),
the share of land areas and plot-owning companies being EUR 183.1 million (EUR
153.0 million). The Group's invested capital amounted to EUR 387.0 million (EUR
349.0 million).
At the end of the financial year, the Group's financing reserves were EUR 108.8
million, of which the Group's cash assets amounted to EUR 9.0 million and the
share of committed undrawn financing reserves amounted to EUR 99.9 million. In
addition, the group had committed financing commitments amounting to EUR 38.0
million. The Group's net interest-bearing liabilities were EUR 220.9 million on
31 December 2010 (EUR 179.9 million on 31 December 2009). Net financing
expenses totalled EUR 5.4 million (EUR 4.2 million).
Investments in SRV's developer contracting housing projects in Finland
including completed, unsold projects, total around EUR 88.5 million. SRV
estimates that the completion of these projects requires another EUR 69.0
million. Undrawn housing corporate loans related to RS projects totalled EUR
74.9 million. Investments in the international business area related to unsold
residential projects in Estonia amount to EUR 1.1 million, and EUR 2.7 million
in Vyborg. EUR 32.4 million is invested in the Etmia office project.
Equity ratio was 35.1 per cent (41.3%). The change in the equity ratio and net
liabilities was affected by the EUR 8.5 million derivative agreement signed by
SRV with Nordea Bank Ab for 1,909,483 SRV Group Plc's shares which are
considered equal to treasury shares held by the company as well as the increase
in inventories. The Group's shareholders' equity totalled EUR 157.1 million
(EUR 163.9 million on 31 December 2009). The return on investment was 4.0 per
cent (4.9%) and the return on equity was 3.2 per cent (1.8%). In its reporting
SRV Group applies IFRIC 15 Agreements for the Construction of Real Estate. The
recognition of developer contracting production upon delivery increases the
total amount of inventories, interest bearing debts and balance sheet, thus
weakening the key figures related to the financing position for its part.
Investments
The Group's investments totalled EUR 2.3 million (EUR 3.7 million) and were
mainly related to the acquisition of machinery and equipment.
Unbuilt land areas, land acquisition commitments and land development agreements
Land reserve Business Housing International Total
31.12.2010 Operations Operations
--------------------------------------------------------------------------------
Unbuilt land areas and land acquisition commitments
--------------------------------------------------------------------------------
-
Building rights*, m2 206 000 284 000 861 000 1 351 000
Land development
agreements
Building rights*, m2 481 000 369 000 152 000 1 002 000
* Building rights also include the estimated building rights/construction volume
of unzoned land reserves and land areas covered by agreements in projects that
are wholly or partly owned by SRV
During the financial year, SRV bought a total of 10,000 square metres of
building rights in the Matinkylä district from the City of Espoo. Furthermore,
the company agreed with the City of Espoo on the purchase of 4,000 square
metres in Matinkylä. SRV bought 7,000 square metres of building rights in the
Kaarela area in the district of Kannelmäki in Helsinki. Moreover, the lease of
12,000 square metres of building rights in a HITAS project in the Arabianranta
district of Helsinki was transferred from VVO to SRV.
On 14 June 2010, The Trade and Competitiveness Division of the Espoo City Board
decided to make a reservation for SRV, Mutual Pension Insurance Company Varma
and SATO Oyj regarding the future Niittykumpu metro station and neighbouring
areas in the intersection of Merituulentie and Haukilahdenkatu for planning of
the metro station and related use of land. The intention is to plan and build
residential and commercial buildings in the area. The preliminary plan includes
building rights of about 150,000 m2 of floor area.
On 11 October 2010, Siemens Osakeyhtiö sold its plots and office building in
the Perkkaa area of Espoo to Kiinteistö Oy Perkkaantalo, a joint venture of
SRV, SATO Oyj and Ilmarinen Mutual Pension Insurance Company. City plan
alterations to designate new block areas for apartment houses are pending. The
joint venture will start developing the area in cooperation with the City of
Espoo. The target for residential floor area is 110,000-120,000 m2.
On 4 October 2010, based on competition, the Town Council of Mikkeli decided to
approve SRV as their partner to develop market and build the Itäportti area in
Visulahti, Mikkeli. The aim of the town and SRV is to develop the area into a
competitive commercial area with valid zoned building right for 72 500 floor
square metres.
Group structure
SRV is Finland's leading project management contractor that builds and develops
commercial and business premises, residential units as well as infrastructure
and logistics projects. Apart from Finland, the company operates in Russia and
the Baltic countries. SRV Group Plc, the Group's parent company, is responsible
for the Group's management, treasury, finance and administrative functions. The
Property Development and Building Systems units support and serve all of the
Group's business operations. SRV's business areas are Business Premises,
Housing, International Operations, and Other Operations. The Business Premises
business area comprises the operations of SRV Toimitilat Oy. Housing comprises
the operations of SRV Asunnot Oy and one regional subsidiary. International
Operations comprises the business activities in Russia and the Baltic
countries. Other Operations consist primarily of the SRV Group Plc and SRV
Kalusto Oy businesses.
Changes in Group structure
SRV decided to merge its Business Premises and Housing and Regional business
areas in Finland as from 1 January 2011. The aim is that the juridical changes
are finalised by the end of March 2011.
After the merger, SRV's business operations will be divided into two business
areas: Operations in Finland and International Operations. In addition, the
company will report Other operations in accordance with the present practice.
In its financial reporting, the company will give more detailed information on
Business Premises construction and Housing construction within the business
segments.
The CEO of the company resulting from the merger, SRV Construction Ltd, is Juha
Pekka Ojala. He s in charge of the Business Premises and Housing business
areas. SRV Construction ltd has regional units in Turku, Tampere, Jyväskylä,
Oulu, Lappeenranta and Joensuu.
Changes in the Group management
Jukka Hienonen started as CEO of the Group on 1 August 2010. Hannu Linnoinen.
Senior Executive Vice President, CFO, acted as CEO during 1 January - 31 July
2010. SRV's Country Manager (Russia) Jussi Kuutsa was nominated as member of
SRV's Corporate Executive Team as of 3 November 2010. SRV's Russian business
operations were divided into two segments. Jussi Kuutsa is in charge of
operational functions in Russia, and Veli-Matti Kullas is in charge of project
development. SRV's Executive Vice President, Business Premises, Juha Pekka
Ojala was appointed SRV Group's Senior Executive Vice President in charge of
business premises and housing in Finland as of 14 December 2010. Jussi Ollila,
member of the Corporate Executive Team, Senior Vice President, Communications
and Marketing, joined another company outside the Group as of 1 September 2010.
Taneli Hassinen was appointed Group's Senior Vice President, Communications and
Marketing and member of the Corporate Executive Team at SRV Group Plc as of 15
March 2011.
Personnel
SRV had an average payroll of 794 (776) employees, of whom 566 (544) were
white-collar. The parent company had an average staff of 47 (53) white-collar
employees. At the close of the financial year, the Group had 792 (766)
employees, of whom 47 (47) were employed by the parent company. An average of
16 per cent (17) of the employees work in subsidiaries and representative
offices abroad. At the end of the financial year, SRV had a total of 17 (18)
trainees working in the Group's operations in Finland (in summer jobs and in
work training as well as students working on their thesis or diploma). The
salaries and compensations paid during the financial year totalled EUR 39.0
million (EUR 35.8 million).
In 2010, SRV launched an extensive training programme for leadership and
interaction skills. More than 100 supervisors from all SRV locations, both
offices and the work site organisation, are participating in the programme. Our
partner is JTO School of Management. The training programme will continue in
2011.
Personnel by business 31.12.201 31.12.200 Share of Group personnel,
area 0 9 31.12.2010, %
--------------------------------------------------------------------------------
Business Premises 337 289 42.6
--------------------------------------------------------------------------------
Housing 222 215 28.0
International 153 182 19.3
Other Operations 80 81 10.1
Group, total 792 767 100.0
The share-based incentive plan for 2010 includes about 70 employees and the
reward is based mainly on consolidated and partly on business area performance.
The reward for the earning period 2010 is 56,869 SRV Group Plc shares. In
addition, a sum of money corresponding to this number of shares is paid for tax
withholding purposes.
Outlook for construction
During the review period, the world economy continued to grow. The recovery is
unstable and the situation continues to be challenging in the property and
construction markets. Expectations for increases in interest rates have been
postponed in Europe and the United States due to the slow start of the
recovery.
The total number of building permits increased during the review period due to
a sharp rise in permits for residential buildings while the number of permits
for commercial and office buildings declined. Due to revived residential
construction, there have been delays in the availability of certain building
materials. On monthly level, the construction costs have shown an upward trend.
Strong consumer confidence in the housing markets and the low interest level
has sustained demand. The volume of new start-ups in developer contracting
housing projects is still growing. Weak employment trends will have a negative
short-term effect on the housing markets. In the longer term, trends such as
migration to population growth centres and the smaller size of households will
increase the need for housing construction.
New start-ups in commercial and office construction continued to decrease
during the period. Vacancy rates in office premises in particular have reached
a high level and construction is slow. The near future outlook for commercial
and logistics construction is somewhat better.
The slight growth in renovations is expected to continue in 2010. The cutback
in civil engineering is predicted to be over at the end of the year.
The economic situation in the Baltic countries has remained weak. The Estonian
economy is predicted to grow during the ongoing year. In Latvia and Lithuania,
the growth in total production is meagre. Construction and the property markets
are slow, still. In the short term, the economic situation in the Baltic
countries will continue to be challenging.
The Russian economy continues to be challenging. The Russian national economy
has revived due to rising oil prices, inflation has abated and interest rates
have declined while the scarce availability of financing limits growth
opportunities. In 2010, Russia's total production is expected to grow by 4-5
per cent.
Risks, risk management and corporate governance
General economic trends and changes in customers' operating environments have
an immediate effect on the construction and property markets. A change in the
general interest level has a direct impact on both SRV's cash flow from
operating activities and financing costs. The general economic trend is upward
but unstable. Demand for property investments has remained weak. Interest rates
are low but, compared to pre-recession times, the availability of credit from
banks is lower and loan margins are clearly higher. The global financial crisis
is making it more difficult for SRV's clients to obtain financing and is
hampering the functioning of the property markets. Property values face
pressures and the number of property transactions and, in particular, new
large-scale project start-ups have decreased due to difficulties in securing
financing. The financial crisis adds SRV's risk to be forced to tie up capital
in projects longer than intended.
SRV's revenue is generated by construction projects, and the company's result
depends on the profitability of individual projects as well as their progress.
Fierce competition for new orders in the construction sector may affect the
volume and profitability of SRV's new order backlog. In developer contracting
projects, recognition of revenue is based mainly on the Completed Contract
method. Revenue recognition depends on the percentage of sold premises in
delivered projects. Delivery schedule of developer contracting projects can
affect essentially on the development of revenue and profit for the financial
year and the quarters. Project sales are affected by factors such as the
availability of financing for the buyer and occupancy rate. When sales are
delayed, the recognition of revenue and operating profit is delayed
correspondingly. Postponed start-ups of developer contracting projects increase
the level of development expenses, which are recorded as costs. The slowdown in
housing sales will increase sales and marketing costs and interest expenses in
developer contracting housing production. After a rapid decline, housing sales
have recovered in Finland while remaining virtually at a standstill in Estonia.
Construction is subject to significant cost risks relating to subcontracting
and deliveries, and the control of these underlines the need for long-term
planning. A weak economic cycle increases financial risks relating to
subcontractors. SRV's contracting model requires skilled and competent
personnel. Warranty and liability obligations related to construction can span
up to ten years. Construction costs in many materials are rising. The swift
growth in residential construction has hampered the availability of purchases
in adjusted production chains. SRV is involved in some arbitration and legal
proceedings. SRV's management believes that the cases or their outcome do not
have a significant impact on SRV's financial result.
Besides land acquisition risks, property projects face other challenges, such
as those related to the outcome of zoning, soil conditions, financing,
commercialisation of projects, partners, and the geographical location and type
of project. In accordance with its strategy, SRV has focused on developer
contracting projects and has increased its land acquisition in Finland and
Russia, in particular. The crisis in the international financial market has
substantially weakened the availability of financing in property projects for
property development and investments. It has also put project start-ups on
hold.
The financial risks connected with SRV's operations are interest rate,
currency, liquidity and contractual party risks, which are discussed in more
detail in the Notes to the Financial Statements. Currency risks are divided
into transaction risks and translation risks. Transaction risks are related to
currency-denominated business and financing cash flows. The accounting effects
of translation risks are shown in the translation differences of equity in the
consolidated figures in investments made in foreign subsidiaries with some
other operating currency than euro.
Liquidity risks may have an effect on the Group's earnings and cash flow if the
Group is unable to ensure sufficient financing for its operations. SRV
maintains adequate liquidity by means of efficient management of cash flows and
solutions linked to it, such as binding lines of credit that are valid until
further notice. The company has a long-term liquidity arrangement of EUR 100
million, of which EUR 55 million will mature in December 2012 and EUR 45
million in December 2013. The company's financing agreements contain customary
terms and conditions. The financial terms and conditions of the agreements
concern the equity ratio.
The Group's risk management is carried out in line with the Group's operations
system and control is exercised in accordance with the Group strategy approved
by the Board of Directors of the Group's parent company. SRV also makes every
effort to cover operational risks by means of insurance and contractual terms.
A more detailed account of SRV's risks, risk management and corporate
governance policies will be disclosed in the 2010 Annual Report and Notes to
the Financial Statements.
Environmental issues
The Group's aim is to minimise the harmful environmental impacts and to
contribute to sustainable development in built environment. SRV wants to be a
forerunner also in development and construction of attractive living and
working environments that encourage to ecologic way of life.
In 2010, SRV together with Sitra and VVO launched a sustainable development
design competition for the implementation of a Low2No city block to be built in
Jätkäsaari, Helsinki. SRV arranged also an extensive design competition
together with VTT and Orimattila town to find ecologically, financially and
socially sustainable solutions for a future town. Several other projects are
under construction or being developed with special focus on minimising the
environmental impacts.
In 2010, SRV's personnel's awareness of environment was enhanced through
training and information and by updating model documents. In autumn 2010 SRV
joined the Green Building Council Finland which fosters sustainable development
practices in construction and real estate business.
Corporate governance and resolutions of general meetings
The Annual General Meeting was held on 16 March 2010. The AGM adopted the
financial statements for 2009 and granted release from liability to the members
of the Board of Directors and the Presidents and CEOs. A dividend of EUR 0.12
per share was declared. Mr Ilpo Kokkila was elected chairman of the Board of
Directors and Mr Arto Hiltunen, Mr Timo Kokkila, Mr Lasse Kurkilahti, Mr Matti
Mustaniemi and Mr Ilkka Salonen were elected to seats on the Board. The firm of
public accountants Ernst & Young Oy was elected as the company's auditor. Mikko
Rytilahti, authorised public accountant, will act as the principal auditor.
The general meeting authorised the Board of Directors to decide on the
acquisition of the company's own shares, using the company's unrestricted
equity. The Board was authorised to acquire a maximum of 3,676,846 own shares,
however, in such a manner that the number of shares acquired on the basis of
this authorisation when combined with the shares already owned by the company
and its subsidiaries, does not at any given time exceed 3,676,846 shares, or 10
per cent of all shares of the company. Based on this authorisation, the Board
may acquire a maximum of 3,676,846 shares of the company in public trading
arranged by Nasdaq OMX Helsinki Oy at a market price valid at the moment of
acquisition, and a maximum of 2,400,000 shares of the company in public trading
arranged by Nasdaq OMX Helsinki Oy or otherwise for a maximum price of EUR 4.45
per share, the maximum being, however, 3,676,846 shares. The aforementioned
authorisations include the right to acquire own shares otherwise than in
proportion to the holdings of the shareholders. These authorisations will
remain in force for 18 months from the decision of the meeting.
The general meeting authorised the Board of Directors to decide on the issue of
new shares or the transfer of treasury shares against payment or without
consideration. This authorisation includes the right to issue new shares or to
transfer the treasury shares in deviation from the shareholders' pre-emptive
subscription right under the terms of the Companies Act. This authorisation is
in force for two years from the decision of the meeting.
In its organisational meeting on 16 March 2010, the Board of Directors elected
Lasse Kurkilahti vice chairman of the Board, Matti Mustaniemi chairman of the
Audit Committee, Lasse Kurkilahti and Timo Kokkila members of the Audit
Committee, Arto Hiltunen and Ilkka Salonen members of the Nomination and
Remuneration Committee and Ilpo Kokkila chairman of the Nomination and
Remuneration Committee.
Shares and shareholders
SRV Group Plc's share capital is EUR 3,062,520. The share has no nominal value
and the number of shares outstanding is 36,768,468. The company has one class
of shares. SRV had a total of 5,740 shareholders on 30 June 2010.
The company received six flagging notifications during the financial year Bank
AB (publ) announced that it had bought 1,909,483 SRV Group Plc shares,
increasing Nordea Group's total holding in SRV to 5.28 per cent. On 17 March
2010, Nordea Bank Suomi Oyj announced that it had purchased the above-mentioned
shares from Nordea Bank AB (publ), after which the total holding of Nordea
Group in SRV was 5.28 per cent. On 17 May 2010 Nordea Bank AB (publ) announced
that it had bought the above-mentioned shares, the holding of Nordea Group
being 5.27%. The flagging notifications are related to a futures contract
between Nordea and SRV. Upon termination of the contract, the shares will be
sold and Nordea Group's holding in SRV will fall to below 1/20. On 20 December
2010, Timo Kokkila announced that his portion of ownership had increased to
12.30 per cent (earlier 0.0%) and that his ownership had increased to 4,522,288
shares (5,000 shares). On 20.12.2010, Ilpo Kokkila announced that his portion
of ownership had decreased to 38.65 per cent (50.94%) and that his ownership
had decreased to 14,212,841 shares (18,730,129 shares).
The share closing price at OMX Helsinki at the end of the financial year was
EUR 6.63 (EUR 5.89 on 31 December 2009). The highest share price in the review
period was EUR 7.14 and the lowest was EUR 5.50. The change in the all-share
index of the Helsinki Stock Exchange (OMX Helsinki) during the same period was
16.2 per cent and the OMX Industrial and Services index 46.0 per cent.
At the end of the financial year, the company had a market capitalisation of
EUR 224.8 million, excluding the Group's own shares. About 12.1 million shares
were traded during the financial year and the trade volume was EUR 71.3
million.
On 5 January 2010, SRV implemented the agreement signed with Eero Heliövaara on
11 August 2009, and Nordea Bank AB (publ) acquired Heliövaara's shares for a
per-share price of EUR 4.45. In the same connection, SRV signed an EUR 8.5
million derivative agreement with Nordea for 1,909,483 company shares,
according to which the shares will be sold to SRV or an entity named by SRV.
These shares are considered equal to treasury shares held by the company. The
derivative agreement will mature in March 2011.
At the end of the financial year, SRV Group Plc had 2,867,399 of SRV Group
Plc's shares taking account of the derivative contract concluded with Nordea
Bank AB (7.8 per cent of the total number of the company's shares and combined
number of votes). On 16 February 2011, the Group had 2,867,339 shares (7.8 per
cent of the total number of the company's shares and combined number of votes).
Financial targets
As SRV's medium term aim, the Board of Directors has set the achievement of
annual average growth of approximately 15 per cent in Group revenue and annual
average growth of over 30 per cent in revenue from International Operations.
SRV aims to increase the level of operating profit and, in the medium to long
term, to achieve an operating margin of 8 per cent. In addition, the company
aims to maintain an equity ratio of over 30 per cent.
The international economic and financial crisis has hampered the growth outlook
for business operations. Realisation of the sales of developer contracting
projects has a substantial effect on the development of profitability. In the
current economic conditions, the set financial targets cannot be met. The
company is endeavouring to maintain profitability by rationalising operations.
Events after the end of the Financial year
In January, SRV and Pearl Plaza LLC, the joint venture of SRV and Shanghai
Industrial Investment (Holdings) Co Ltd, concluded the investment decision on
construction of the first phase of the shopping centre in Saint Petersburg,
Russia and signed with SRV Project Management contract for the construction
works of the first phase of the project. The PM contract is worth about 100
million Euros. The value of investment is about 130 million Euros. Financing of
the project will come mainly from China. SRV will invest approximately 20
Million Euros in the implementation of the first phase. SRV is responsible for
commercial development and leasing of the premises. The scope of the first
phase of Pearl Plaza SC is about 86,500 m2, with GLA about 46,500 m2. Pearl
Plaza has signed a letter of intent with the Finnish Prisma supermarket
operator, who will lease around 7600 square meters from the shopping centre for
a hypermarket.
Outlook for 2011
Revenue and profit before taxes in 2011 are expected to exceed the previous
year's level.
Proposal for the distribution of profits
The parent company's distributable funds on 31 December 2010 are EUR
131,871,340.63
of which net profit for the financial year is
EUR 2,810,343.35
The Board of Directors proposes to the Annual General Meeting that
distributable funds be disposed of as follows:
A dividend of EUR 0.12 per share be paid to shareholders, or EUR
4,412,216.16
The amount to be transferred to shareholders' equity EUR
127,459,124.47
No material changes have taken place in the company's financial position after
the close of the financial year. The company's liquidity is good and, in the
view of the Board of Directors, the proposed dividend payout does not
compromise the company's solvency.
Espoo, 16 February 2011 Board of Directors All forward-looking statements in
this review are based on the management's current expectations and beliefs
about future events, and actual results may differ materially from the
expectations and beliefs such statements contain. For further information,
please contact: Jukka Hienonen, CEO, +358 201 455 213Hannu Linnoinen, Senior
Executive Vice President, CFO, +358 201 455 990. +358 50 523 5850
Distribution: Nasdaq OMX Helsinki, principal media, www.srv.fi
Key figures:
IFRS IFRS IFRS IFRS
1-12/ 1-12/ 10-12/ 10-12/
2010 2009 2010 20009
--------------------------------------------------------------------------------
Revenue EUR 484.8 390.5 157.2 120.1
million
Operating profit EUR 13.0 10.7 5.7 2.7
million
Operating profit, % of revenue % 2.7 2.7 3.6 2.2
Profit before taxes EUR 7.6 6.5 4.1 2.2
million
Profit before taxes, % of revenue % 1.6 1.7 2.6 1.8
Net profit attributable to equity EUR 6.4 2.9 3.3 1.0
holders of the parent company million
Return on equity % 3.2 1.8
Return on investment % 4.0 4.9
Invested capital EUR 387.0 349.0
million
Equity ratio % 35.1 41.3
Net interest-bearing debt EUR 220.9 179.9
million
Gearing ratio % 140.6 109.8
Order backlog EUR 593.7 481.6
million
New agreements 559.9 396.1
Personnel on average 794 776
Property, plant and equipment EUR 2.3 3.7 0.2 1.0
investments million
Property, plant and equipment % 0.5 0.9 0.1 0.8
investments, % of revenue
Earnings per share, share issue EUR 0.19 0.08 0.10 0.03
adjusted
Equity per share, share issue EUR 4.55 4.48 -- --
adjusted
Dividend per share, share issue EUR 0.12 0.12 -- --
adjusted 1)
Dividend payout ratio % 63.2 150.0 -- --
Dividend yield % 1.8 2.0 -- --
Price per earnings ratio 34.9 73.6 -- --
Share price development -- --
Share price at the end of the period EUR 6.63 5.89 -- --
Average share price EUR 6.42 4.06 -- --
Lowest share price EUR 5.50 2.75 -- --
Highest share price EUR 7.14 5.97 -- --
Market capitalisation at the end of EUR 224.8 210.7 -- --
the period million
Trading volume 1,000 12 114 8 309 -- --
Trading volume % 35.7 23.1 -- --
Weighted average number of shares 1,000 33 923 35 999 -- --
outstanding
Number of shares outstanding at the 1,000 33 901 35 768 -- --
end of the period
1) Board of Directors' proposal for the distribution of profits of 2010
Calculation of key figures:
Possible table in table detected.
Object reference not set to an instance of an object.
SRV Group Plc Financial Statements Review 1 January - 31 December 2010: Tables
APPENDIXES1) Condensed consolidated financial statements: income statement,
balance sheet, statement of changes in equity, cash flow statement, commitments
and contingent liabilities, derivative contracts liabilities2) Quarterly
development3) Segment information 4) Events after the financial year 1. Group
financials 1.1. - 31.12.2010 IFRS standards and operating segments SRV Group's
consolidated financial statements have been prepared in accordance with the
International Financial Reporting Standards (IFRS) valid on 31 December 2010.
The figures in the tables have been rounded which should be noted when counting
the total sums. The condensed consolidated financial statement information has
been prepared in accordance with the accounting policies set out in the IAS 34
standard, and the information disclosed for the periods January December 2010
and January - December 2009 is audited and the information disclosed for the
periods October - December 2010 and October December 2009 is unaudited. The
consolidated financial statements have been prepared based on a historical cost
basis, except for available-for-sale investments, financial assets and
liabilities measured at fair value through income statement and derivative
contracts measured at fair value as well as share-based payments which are
measured at fair value. SRV's reporting segments comprise Business Premises,
Housing, International Operations and Other Operations. The operating segment
figures are disclosed in accordance with IFRS 8, following the accounting
principles applied in the consolidated financial statements.
Estimate of the impacts of the new standards, changes and interpretations:
The following standards, amendments and interpretations have been applied as
from the accounting period beginning on 1 January 2010.
-- IAS 27 Consolidated and Separate Financial Statements. The changes in the
ownership interest of a subsidiary that does not result in loss of control
are recognized in equity. Losses incurred by the subsidiary will be
allocated to the non-controlling interest even if the losses exceed the
non-controlling equity investment in the subsidiary.
-- IFRIC 15 Agreements for the Construction of Real Estate. The interpretation
specifies when the revenue in connection with construction contracts may be
recognized using the percentage of completion method and when completed
contract method should be used instead. The application of this
interpretation will have an impact primarily on revenue recognition of the
housing developer contracting. The Group previously recognised revenue from
developer contracting housing projects on a percentage of completion basis.
Under the new interpretation, revenue will from now on mainly be recognised
on the basis of project delivery. The interpretation has been applied
retroactively.
The amendments have impact on Group's financial position and to some extent on
the presentation of of consolidated financial statements.
-- Annual improvements 2009. The amendments and interpretations do not have an
effect on the Group's financial position. They have to some extent effect
on the presentation of the consolidated financial statements.
The following standards, amendments and interpretations shall be applied as
from the accounting period beginning on 1 January 2011 or thereafter:
-- IFRS 9 Financial instruments, part 1. Since EU has not approved the new
standard, it cannot be applied for the time being. According to IFRS 9, the
new standard would be effective for annual periods beginning on or after 1
January 2013. The amendments shall be applied retroactively. Early adoption
is permitted. These standards, amendments and interpretations have impact
on Group's financial position and to some extent on the presentation of of
consolidated financial statements.
-- Annual improvements 2010 (effective on 1 January 2011). The Group will
apply this amendment as of 1 January 2011.
-- Amendment IFRS 7 Financial instruments: Disclosures - Transfers of
financial assets. The amendment will be effective for annual periods
beginning on or after 1 July 2011. EU has not yet approved this standard.
Based on current information, these standards, amendments and interpretations
have no impact on Group's financial position. To some extent, they have impact
on the presentation of of consolidated financial statements.
Consolidated income IFRS IFRS IFRS IFRS
statement 1-12/ 1-12/ change change 10-12/ 10-12/
(EUR million) 2010 2009 , MEUR ,% 2010 2009
--------------------------------------------------------------------------------
Revenue 484.8 390.5 94.3 24.2 157.2 120.1
--------------------------------------------------------------------------------
Other operating income 3.2 2.6 0.7 25.2 1.0 1.0
Change in inventories of 29.7 -10.3 40.1 -388.3 6.1 -14.3
finished goods and work in
progress
Use of materials and services -437.8 -313.5 -124.4 39.7 -139.6 -88.1
Employee benefit expenses -49.6 -44.5 -5.1 11.5 -14.0 -12.3
Depreciation and impairments -3.5 -3.7 0.2 -4.4 -1.0 -0.8
Other operating expenses -13.8 -10.4 -3.4 32.8 -4.0 -2.9
Operating profit 13.0 10.7 2.3 21.7 5.7 2.7
Financial income 2.1 6.0 -3.9 -64.6 0.1 0.5
Financial expenses -7.5 -10.2 2.7 -26.1 -1.7 -1.0
Financial income and expenses, -5.4 -4.2 -1.2 29,8 -1.6 -0.5
total
Profit before taxes 7.6 6.5 1.1 16.5 4.1 2.2
Income taxes -2.5 -3.6 1.2 -32.1 -1.7 -1.3
Net profit for the period 5.2 2.9 2.2 76.8 2.4 0.9
Attributable to
Equity holders of the parent 6.4 2.9 3.3 1.0
company
Minority interest -1.2 0.0 -0.9 -0.1
Earnings per share calculated on 0.19 0.08 137.5 0.10 0.03
the profit attributable to
equity holders of the parent
company (undiluted and diluted)
IFRS IFRS IFRS IFRS
Statement of comprehensive income 1-12/ 1-12/ 10-12/ 10-12/
(EUR million) 2010 2009 2010 2010
--------------------------------------------------------------------------------
Net profit for the period 5.2 2.9 2.4 0.9
--------------------------------------------------------------------------------
Items recognised directly in equity:
Exchange differences on translating 0.0 0.0 0.0 -0.1
foreign operations
Available for sale financial assets 0.1 0.0 0.1 0.0
Income (loss) recognised directly in 0.0 0.0 0.0 0.0
equity net of tax
Total comprehensive income for the 5.2 2.9 2.4 0.9
period
Profit for the period attributable to:
Equity holders of the parent company 6.4 2.9 3.3 0.9
Minority interest -1.2 0.0 -0.9 -0.1
Consolidated balance sheet IFRS IFRS change.
(EUR million) 31.12.10 31.12.09 %
----------------------------------------------------------
ASSETS
----------------------------------------------------------
Non-current assets
Property. plant and equipment 14.0 16.3 -14.1
Goodwill 1.7 1.7 0.0
Other intangible assets 0.4 0.5 -18.3
Other financial assets 5.2 4.8 7.9
Receivables 21.9 16.2 35.4
Deferred tax assets 5.5 2.3 142.0
Non-current assets. total 48.7 41.7 16.7
Current assets
Inventories 338.9 292.2 16.0
Trade and other receivables 81.9 76.9 6.5
Current tax receivables 1.5 1.9 -18.9
Cash and cash equivalents 9.0 5.2 71.8
Current assets. total 431.3 376.2 14.6
ASSETS. TOTAL 480.0 418.0 14.9
Consolidated balance sheet IFRS IFRS change
.
(EUR million) 31.12.1 31.12.0 %
0 9
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
--------------------------------------------------------------------------------
Equity attributable to equity holders of the parent
company
Share capital 3.1 3.1 0.0
Invested free equity fund 87.8 87.3 0.5
Translation differences -0.1 -0.1 13.7
Fair value reserve 0.0 -0.1 -100.0
Retained earnings 63.7 69.9 -8.9
Equity attributable to equity holders of the parent 154.4 160.1 -3.6
company. total
Minority interest 2.7 3.8 -27.1
Equity. total 157.1 163.9 -4.1
Non-current liabilities
Deferred tax liabilities 0.8 0.5 58.2
Provisions 4.2 4.8 -11.6
Interest-bearing liabilities 78.8 96.9 -18.7
Other liabilities 1.3 0.8 70.4
Non-current liabilities. total 85.1 102.9 -17.3
Current liabilities
Trade and other payables 79.7 56.4 41.2
Current tax payables 3.4 2.6 31.0
Provisions 3.5 3.8 -8.0
Interest-bearing liabilities 151.1 88.2 71.3
Current liabilities. total 237.8 151.1 57.3
Liabilities. total 322.9 254.1 27.1
EQUITY AND LIABILITIES 480.0 418.0 14.9
Consolidated cash flow statement IFRS IFRS
(EUR million) 1-12/2010 1-12/2009
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period 5.2 2.9
Adjustments:
Depreciation and impairments 3.5 3.7
Non-cash transactions 0.6 2.7
Financial income and expenses 5.4 4.2
Capital gains on sales of tangible and intangible assets 0.0 0.0
Income taxes 2.5 3.6
Adjustments. total 12.0 14.1
Changes in working capital:
Change in loan receivables 1.1 -13.5
Change in trade and other receivables -10.6 17.7
Change in inventories -46.4 10.0
Change in trade and other payables 22.9 -12.3
Changes in working capital. total -33.0 1.9
Interest paid -7.7 -12.7
Interest received 0.8 5.7
Dividends received 0.1 0.0
Income taxes paid -4.2 -5.9
Net cash flow from operating activities -26.8 6.1
Cash flow from investing activities
Acquisition of subsidiaries. net of cash -0.3 -2.3
Property. plant and equipment -1.5 -0.8
Intangible assets -0.1 -0.1
Other financial assets -0.4 -0.5
Sale of property. plant and equipment and intangible 0.1 0.0
assets
Sale of financial assets 0.0 0.0
Net cash used in investing activities -2.2 -3.7
Cash flows from financing activities
Proceeds from loans 15.4 19.6
Repayments of loans -6.1 -22.2
Change in loan receivables 0.0 0.0
Change in housing corporation loans -2.2 -9.2
Change in credit limits 38.2 17.5
Purchase of treasury shares -8.5 -1.8
Dividends paid -4.1 -4.4
Net cash from financing activities 32.8 -0.6
Net change in cash and cash equivalents 3.7 1.8
Cash and cash equivalents at the beginning of period 5.2 3.4
Cash and cash equivalents at the end of period 9.0 5.2
Inventories IFRS IFRS change
.
(EUR million) 31.12.1 31.12.0 % 0 9
--------------------------------------------------------------------------------
Raw materials and consumables 0.2 0.0
--------------------------------------------------------------------------------
Work in progress 46.8 35.1 33.3
Land areas and plot-owning companies 183.1 153.0 19.7
Shares in completed housing corporations and real 88.3 86.5 2.1
estate companies
Advance payments 5.6 3.6 57.9
Other inventories 14.9 14.0 6.4
Inventories. total 338.9 292.2 16.0
Statement of changes in Group equity 1.1. - 31.12.2010
Equity attributable to
the equity holders of the parent company
-------------------------------------------------------------------------
IFRS Share Invested Trans-l Fair Retai- Total Minori Total
(EUR million) capita free ation value ned ty equity
l equity differ- reserv earnin intere
fund ences e gs st
--------------------------------------------------------------------------------
Equity on 3.1 87.3 -0.1 -0.1 69.9 160.1 3.8 163.9
1.1.2010
--------------------------------------------------------------------------------
Total income 0.0 0.0 0.1 6.4 6.4
and expenses
for the
financial year
--------------------------------------------------------------------------------
Dividends paid -4.1 -4.1
--------------------------------------------------------------------------------
Share based 0.3 0.3
incentive plan
--------------------------------------------------------------------------------
Purchase of -8.5 -8.5
treasury
shares
--------------------------------------------------------------------------------
Other changes 0.4 -0.4 0.1
--------------------------------------------------------------------------------
Equity on 3.1 87.8 -0.1 0.0 63.7 154.4 2.7 157.1
31.12.2010
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1 - 31.12.2009
Equity attributable to
the equity holders of the parent company
-----------------------------------------------------------------
IFRS Share Invested Trans-l Fair Retai- Total Minori Total
(EUR million) capita free ation value ned ty equity
l equity differ- reserv earnin intere
fund ences e gs st
--------------------------------------------------------------------------------
Equity on 3.1 87.3 -0.1 -0.1 73.4 163.6 2.2 165.9
1.1.2009
--------------------------------------------------------------------------------
Total income 0.0 0.0 0.0 0.0 2.9 2.9
and expenses
for the
financial year
--------------------------------------------------------------------------------
Dividends paid -4.3 -4.3
--------------------------------------------------------------------------------
Share based 0.0 0.0
incentive plan
--------------------------------------------------------------------------------
Purchase of -1.8 -1.8
treasury
shares
--------------------------------------------------------------------------------
Other changes -0.2 -0.2
--------------------------------------------------------------------------------
Equity on 3.1 87.3 -0.1 -0.1 69.9 160.2 3.8 163.9
31.12.2009
--------------------------------------------------------------------------------
Commitments and contingent liabilities IFRS IFRS change.
EUR million 31.12.10 31.12.09 %
--------------------------------------------------------------------------------
Collateral given for own liabilities
--------------------------------------------------------------------------------
Real estate mortgages given 129.0 106.0 21.7
Pledges given 0.0 0.0
Other commitments
Guarantees given for liabilities on uncompleted 0.0 0.0
projects
Investment commitments given 21.8 22.1 -1.3
Plots purchase commitments 16.6 19.5 -15.1
Fair and nominal values of IFRS IFRS
derivative instruments 31.12.10 31.12.2009
--------------------------------------------------------------------------------
(EUR million) Fair Values Fair Values
Positive Negative Positive Negative
Hedge accounting not applied
Foreign exchange forward contracts 0.0 0.0 0.0 0.0
Interest rate swaps 0.0 1.3 0.0 0.7
Nominal values of derivative instruments IFRS IFRS
---------- ---------
31.12.10 31.12.09
---------- ---------
Foreign exchange forward contracts 0.0 0.0
Interest rate swaps 63.4 63.4
The fair values of derivative instruments are based on market prices at the end
of the reporting period.
Open foreign exchange forward contracts are hedging the financing cash flow.
2. Group and Segment information by quarter
SRV Group IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 10-12/ 7-9/10 4-6/10 1-3/10 10-12/ 7-9/09 4-6/09 1-3/09
10 09
--------------------------------------------------------------------------------
Revenue 157.2 115.3 117.3 95.0 120.1 87.3 96.0 87.0
--------------------------------------------------------------------------------
Operating profit 5.7 4.3 1.5 1.6 2.7 2.3 3.9 1.8
Financial income -1.6 -0.8 -1.6 -1.4 -0.5 -1.2 -1.0 -1.5
and expenses.
total
Profit before 4.1 3.5 -0.1 0.2 2.2 1.1 2.9 0.3
taxes
Order backlog 1) 593.7 604.3 604.4 530.0 481.6 465.8 461.1 458.5
New agreements 120.1 112.6 186.7 140.6 120.4 86.2 98.2 91.3
Earnings per 0.10 0.08 0.02 -0.01 0.03 0.01 0.04 0.00
share. eur
Equity per 4.55 4.47 4.38 4.36 4.48 4.45 4.44 4.40
share. eur 1)
Share price. eur 6.63 6.14 6.16 6.41 5.89 5.64 4.18 3.00
1)
Equity ratio. % 35.1 35.0 35.1 37.0 41.3 40.9 40.1 40.5
1)
Net interest 220.9 227.7 216.7 199.8 179.9 189.8 186.8 172.6
bearing debt 1)
Gearing. % 1) 140.6 146.7 142.3 132.3 109.8 116.3 116.6 107.1
Revenue IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 10-12/1 7-9/10 4-6/10 1-3/10 10-12/0 7-9/09 4-6/09 1-3/09
0 9
--------------------------------------------------------------------------------
Business 103.2 84.8 76.8 54.7 66.9 40.2 46.1 54.8
Premises
--------------------------------------------------------------------------------
Housing 44.2 24.7 35.8 38.3 49.9 39.7 42.4 26.6
International 9.8 5.8 4.8 2.0 3.4 7.4 7.6 5.6
Other 2.8 2.5 2.5 2.5 2.3 2.1 2.1 2.2
Operations
Eliminations -2.8 -2.5 -2.6 -2.5 -2.3 -2.1 -2.1 -2.2
Group. total 157.2 115.3 117.3 95.0 120.1 87.3 96.0 87.0
Operating IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
profit
(EUR million) 10-12/1 7-9/10 4-6/10 1-3/10 10-12/0 7-9/09 4-6/09 1-3/09
0 9
--------------------------------------------------------------------------------
Business 4.5 4.5 4.7 4.3 4.3 3.1 4.6 5.9
Premises
--------------------------------------------------------------------------------
Housing 3.9 1.4 0.7 2.4 1.9 1.3 2.3 -0.1
International -1.0 -0.4 -2.2 -3.9 -2.0 -1.3 -1.9 -2.5
Other -2.0 -1.1 -1.6 -1.2 -1.4 -0.7 -1.0 -1.6
Operations
Eliminations 0.2 0.0 -0.1 -0.1 -0.2 -0.1 0.0 0.0
Group. total 5.7 4.3 1.5 1.6 2.7 2.3 3.9 1.8
Operating IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
profit
(%) 10-12/1 7-9/10 4-6/10 1-3/10 10-12/0 7-9/09 4-6/09 1-3/09
0 9
--------------------------------------------------------------------------------
Business 4.4 5.3 6.1 7.9 6.5 7.7 10.0 10.8
Premises
--------------------------------------------------------------------------------
Housing 8.8 5.5 2.1 6.3 3.8 3.4 5.3 -0.4
International -9.8 -7.1 -46.6 -197.5 -58.4 -17.6 -25.6 -44.4
Group. total 3.6 3.7 1.3 1.6 2.2 2.6 4.1 2.1
Order backlog IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 31.12.1 30.9.1 30.6.1 31.3.1 31.12.0 30.9.0 30.6.0 31.3.0
0 0 0 0 9 9 9 9
--------------------------------------------------------------------------------
Business 324.6 338.5 358.2 331.7 255.3 252.0 224.3 252.8
Premises
--------------------------------------------------------------------------------
Housing 249.9 242.6 220.5 174.3 201.7 187.5 206.1 174.3
International 19.2 23.1 25.7 24.0 24.6 26.3 30.7 31.5
Group. total 593.7 604.3 604.4 530.0 481.6 465.8 461.1 458.5
- sold order 441 443 426 389 317 325 306 291
backlog
- unsold order 153 162 178 141 165 141 155 168
backlog
Invested IFRS IFRS IFRS IFRS IFRS IFRS IFRS IFRS
capital
(EUR million) 31.12.1 30.9.1 30.6.1 31.3.1 31.12.0 30.9.0 30.6.0 31.3.0
0 0 0 0 9 9 9 9
--------------------------------------------------------------------------------
Business 54.4 79.2 75.8 56.2 42.0 61.0 77.0 69.2
Premises
--------------------------------------------------------------------------------
Housing 125.3 127.7 127.7 121.6 122.9 124.1 137.0 136.7
International 185.3 175.2 177.2 173.6 176.3 165.6 152.0 150.5
Other and 22.0 8.2 4.2 6.0 7.7 6.2 -12.2 -14.0
eliminations
Group. total 387.0 390.2 384.9 357.5 349.0 356.9 353.8 342.3
Residential
production
in Finland 10-12/ 7-9/10 4-6/10 1-3/10 10-12/ 7-9/09 4-6/09 1-3/09
(units) 10 09
--------------------------------------------------------------------------------
Developer
contracting
--------------------------------------------------------------------------------
Start-ups 133 110 300 0 247 0 0 4
Sold 163 164 102 95 86 43 51 27
Completed 1) 171 14 0 16 64 37 93 58
Completed and 137 90 105 138 171 161 185 156
unsold 1)
Under 1 629 1 183 1 064 996 966 783 694 625
construction 1)
2)
- negotiation 1 024 540 517 749 703 703 576 414
and construction
contracts 1) 2)
- developer 605 643 547 247 263 80 118 211
contracting 1)
- of which 284 361 400 169 231 79 100 180
unsold 1)
2)<tr><td class="gnw_colhead">Assets</td><td class="gnw_colhead">IFRS</td><td
class="gnw_colhead">IFRS</td><td class="gnw_colhead">change.</td><td
class="gnw_colhead">change.</td></tr><tr><td class="gnw_colhead_uline">(EUR million)</td><td
class="gnw_colhead_uline">31.12.10</td><td
class="gnw_colhead_uline">31.12.09</td><td
class="gnw_colhead_uline">MEUR</td><td class="gnw_colhead_uline">%</td></tr><tr><td class="gnw_label_uline">Business Premises</td><td
class="gnw_num_uline">108.2</td><td class="gnw_num_uline">88.7</td><td
class="gnw_num_uline">19.5</td><td class="gnw_num_uline">22.0</td></tr><tr><td class="gnw_label">Housing</td><td class="gnw_num">165.4</td><td
class="gnw_num">151.5</td><td class="gnw_num">13.9</td><td
class="gnw_num">9.2</td></tr><tr><td class="gnw_label">International</td><td class="gnw_num">191.3</td><td
class="gnw_num">182.5</td><td class="gnw_num">8.8</td><td
class="gnw_num">4.8</td></tr><tr><td class="gnw_label">Other Operations</td><td
class="gnw_num">251.7</td><td class="gnw_num">214.5</td><td
class="gnw_num">37.2</td><td class="gnw_num">17.3</td></tr><tr><td class="gnw_label">Eliminations</td><td class="gnw_num">-236.7</td><td
class="gnw_num">-219.3</td><td class="gnw_num">-17.4</td><td class="gnw_right"></td></tr><tr><td class="gnw_label">Group. total</td><td class="gnw_num">480.0</td><td
class="gnw_num">418.0</td><td class="gnw_num">62.1</td><td
class="gnw_num">14.9</td></tr>
Liabilities IFRS IFRS change. change.
(EUR million) 31.12.10 31.12.09 MEUR %
-------------------------------------------------------
Business Premises 77.1 55.5 21.6 38.9
-------------------------------------------------------
Housing 140.2 133.2 7.1 5.3
International 198.4 181.7 16.6 9.1
Other Operations 109.1 79.2 29.9 37.7
Eliminations -201.8 -195.6 -6.3
Group. total 322.9 254.1 68.8 27.1
Invested capital IFRS IFRS change. change.
(EUR million) 31.12.10 31.12.09 MEUR %
------------------------------------------------------------
Business Premises 54.4 42.0 12.4 29.4
------------------------------------------------------------
Housing 125.3 122.9 2.4 1.9
International 185.3 176.3 9.0 5.1
Other and eliminations 22.0 7.7 14.3 185.0
Group. total 387.0 349.0 38.0 10.9
Inventories IFRS IFRS change
.
(MEUR) 31.12.1 31.12.0 MEUR
0 9
--------------------------------------------------------------------------------
Land areas and plot-owning companies 183.1 153.0 30.1
--------------------------------------------------------------------------------
Business Premises 34.5 27.8 6.7
Housing 56.2 41.4 14.8
International 92.2 83.6 8.6
Work in progress 46.8 35.1 11.7
Business Premises 0.0 0.0 0.0
Housing 46.0 21.2 24.8
International 0.9 14.0 -13.1
Shares in completed housing corporations and real 88.3 86.5 1.8
estate companies
Business Premises 25.8 25.5 0.3
Housing 42.5 55.5 -13.0
International 20.0 5.5 14.5
Other inventories 20.7 17.6 3.1
Business Premises 5.1 5.1 0.0
Housing 6.2 3.7 2.5
International 10.5 9.9 0.6
Inventories. total 338.9 292.2 46.7
Business Premises 65.3 58.4 7.0
Housing 150.9 121.7 29.2
International 123.4 112.9 10.6
Business Premises IFRS IFRS change. change.
(EUR million) 1-12/2010 1-12/2009 MEUR %
-------------------------------------------------------------------------
Revenue 319.5 208.0 111.5 53.6
-------------------------------------------------------------------------
Operating profit 18.0 18.0 0.0 0.0
Segment's assets
Non-current assets 0.8 0.9 -0.1 -9.2
Current assets 107.5 87.8 19.6 22.3
Total assets 108.2 88.7 19.5 22.0
Segment's liabilities
Non-current liabilities 0.7 11.0 -10.3 -93.8
Current liabilities 76.4 44.5 31.9 71.6
Total liabilities 77.1 55.5 21.6 38.9
Invested capital at end of period 54.4 42.0 12.4 29.4
Return on investment. % 37.3 35.2
Order backlog at end of period 324.6 255.3 69.3 27.1
Housing IFRS IFRS change. change.
(EUR million) 1-12/2010 1-12/2009 MEUR %
-------------------------------------------------------------------------
Revenue 143.1 158.6 -15.4 -9.7
-------------------------------------------------------------------------
Operating profit 8.4 5.4 3.0 55.0
Segment's assets
Non-current assets 4.6 1.4 3.2 224.6
Current assets 160.8 150.1 10.7 7.1
Total assets 165.4 151.5 13.9 9.2
Segment's liabilities
Non-current liabilities 71.1 68.2 2.9 4.2
Current liabilities 69.1 65.0 4.2 6.4
Total liabilities 140.2 133.2 7.1 5.3
Invested capital at end of period 125.3 122.9 2.4 1.9
Return on investment. % 6.8 4.2
Order backlog at end of period 249.9 201.7 48.2 23.9
International Operations IFRS IFRS change. change.
(EUR million) 1-12/2010 1-12/2009 MEUR %
-------------------------------------------------------------------------
Revenue 22.3 24.0 -1.7 -7.0
-------------------------------------------------------------------------
Operating profit -7.5 -7.7 0.2
Segment's assets
Non-current assets 26.0 25.1 0.8 3.2
Current assets 165.4 157.4 8.0 5.1
Total assets 191.3 182.5 8.8 4.8
Segment's liabilities
Non-current liabilities 9.0 18.4 -9.3 -50.8
Current liabilities 189.3 163.4 26.0 15.9
Total liabilities 198.4 181.7 16.6 9.1
Invested capital at end of period 185.3 176.3 9.0 5.1
Return on investment. % -3.4 -1.4
Order backlog at end of period 19.2 24.6 -5.4 -21.9
4. Events after the end of the reporting period
In January. SRV and Pearl Plaza LLC. the joint venture of SRV and Shanghai
Industrial Investment (Holdings) Co Ltd. concluded the investment decision on
construction of the first phase of the shopping centre in Saint Petersburg.
Russia and signed with SRV Project Management contract for the construction
works of the first phase of the project. The PM contract is worth about 100
million Euros. The value of investment is about 130 million Euros. Financing of
the project will come mainly from China. SRV will invest approximately 20
Million Euros in the implementation of the first phase. SRV is responsible for
commercial development and leasing of the premises. The scope of the first
phase of Pearl Plaza SC is about 86.500 m2. with GLA about 46.500 m2. Pearl
Plaza has signed a letter of intent with the Finnish Prisma supermarket
operator. who will lease around 7600 square meters from the shopping centre for
a hypermarket.
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