2011-05-04 07:30:00 CEST
2011-05-04 07:30:10 CEST
REGULATED INFORMATION
SRV Yhtiöt Oyj - Interim report (Q1 and Q3)
GROWTH IN SRV'S ORDER BACKLOG REMAINED STRONG - SRV'S INTERIM REPORT 1 JANUARY - 31 MARCH 2011
Espoo, Finland, 2011-05-04 07:30 CEST (GLOBE NEWSWIRE) -- SRV GROUP PLC
INTERIM REPORT 4 May 2011, 8.30 a.m.
Reporting period 1 January-31 March 2011 in brief:
-- SRV's revenue was EUR 132.6 million (EUR 93.8 million in January-March
2011), change +41.3%
-- Operating profit was EUR 1.0 million (EUR 1.6 million), change -35.4%
-- Profit before taxes was EUR 1.7 million (EUR 0.2 million
-- The order backlog at the close of the review period was EUR 702.2 million
(EUR 530.0 million), change +32.5%
-- New contracts EUR 220.2 million (EUR 140.6 million), change +56.6%
-- The equity ratio was 33.2 per cent (37.0%)
-- Earnings per share were EUR 0.05 (EUR -0.01)
The interim report has been prepared in accordance with IAS 34. The disclosed
information is unaudited.
The President and CEO Jukka Hienonen comments on SRV's result:
Post-recession housing construction is off to a brisk start in Finland. SRV has
boldly become involved in new projects on offer. In addition to increased
developer contracting housing construction, we have taken on a significant
portion of rental unit production contracts in the Helsinki Metropolitan Area.
At the end of April we had more than 2000 housing units under construction.
In contrast, the market for business premises is off to a slower start than the
housing market. The only significant on-going developer contracting project at
the moment is the Derby Business Park project in Perkkaa, Espoo. The project
also includes the construction of the Finnish headquarters of Siemens
Corporation. In addition, we are carrying out logistics projects in the
Helsinki Metropolitan Area, as well as trade sector contracts in various
locations around Finland.
The increased share of contract-based construction in our overall production
has lowered our relative profitability despite the significant increase in our
revenue.
Some initial steps have been taken in international operations. The most
significant of these projects is the Pearl Plaza shopping centre in St.
Petersburg, initiated early this year. Our goal is to start up several projects
in Russia which have been stagnant for a long time, and this requires
committing a significant share of SRV's capital to these projects.
We have reconfigured our group structure. As of the beginning of this year, we
merged our Housing, Business Premises, and Regional business areas. A more
unified structure provides obvious advantages related to synergy, allowing us
to utilise the best practices and resources available for the construction of
housing and business premises alike in various projects.
The profitability of the first quarter is not in line with our level of
ambition. The increased number of backlog orders under construction, together
with new orders, forms a solid basis for future progress. This indicates a
concentration of profits in the latter half of 2011 and the last quarter in
particular.
In early 2011, we have been able to make progress on two of our long-term major
development projects: the Kalasatama Centre and Keilaniemi. They will both be
key projects for this decade and are expected to have significant roles in
SRV's earnings.
Markets and general review
The positive development with regard to SRV's revenue and order backlog
continued in early 2011. The number of new SRV contracts increased by 56.6 per
cent and the order backlog reached its highest level in the history of SRV.
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.
In Finland, the commercial construction markets have not started to climb yet,
and competition for new orders is fierce. SRV's volume of commercial
construction has remained at a good level. However, there is pressure to
maintain profitability, as the company's order backlog is based on contracting
activity with a lower profit margin. In addition, construction costs have gone
up. 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 made positive
progress. SRV has focused more clearly than before on the production of both
rental and owner-occupied housing. The total amount of SRV's housing production
under construction grew to 1 956 residential units, of which 65 per cent are
rental or right-of-occupancy units. Eighty-four per cent of this new production
has already been sold. The number of developer contracting housing projects
currently under construction grew to 660 residential units and the decision on
the start-up of 272 additional units has been made. In total, SRV sold 237
residential units to consumers and investors (in comparison to 163 units in
January-March 2010).
The financial and real-estate markets in Russia are slowly recovering. 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.
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.
SRV's financial stability and position have remained at a good level and
support the utilisation of the innovative project development expertise of SRV.
IFRS IFRS IFRS
Group key figures 1-3/ 1-3/ change,M change, 1-12/
(EUR million) 2011 2010 EUR % 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue 132.6 93.8 38.8 41.3 484.2
Operating profit 1.0 1.6 -0.6 -35.4 12.5
Financial income and expenses, 0.7 -1.4 2.1 -4.5
total
Profit before taxes 1.7 0.2 1.5 960.9 7.9
Order backlog 702.2 530.0 172.1 32.5 594.5
New agreements 220.2 140.6 79.6 56.6 559.9
Operating profit, % 0.8 1.7 2.6
Net profit, % 0.8 -0.7 1.1
Equity ratio, % 33.2 37.0 35.2
Net interest bearing debt 246.4 199.8 222.8
Gearing, % 159.1 132.3 141.7
Return on investment, % 1) 2.5 2.5 4.1
Return on equity, % 1) 2.9 -1.7 3.2
Earnings per share, EUR 0.05 -0.01 0.19
Equity per share, EUR 4.49 4.36 4.56
Weighted average number of shares 33.9 34.0 -0.1 33.9
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. The Group's profit before taxes improved on account of the gains
from interest rate swaps and currency fluctuation, as well as affiliate-derived
financial income from derivative contracts included in the financial income and
expenses. The Group's order backlog grew on account of the increased order
backlog of international and domestic housing construction.
Key figures for the Segments
IFRS IFRS IFRS
Revenue 1-3/ 2011 1-3/ 2010 change,MEU change, % 1-12/ 2010
(EUR million) R
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operations in Finland 123.9 93.0 31.0 33.3 462.3
International 8.4 0.7 7.6 1018.3 21.7
Operations
Other Operations 3.3 2.5 0.7 28.8 10.3
Eliminations -3.0 -2.5 -0.5 -10.2
Group, total 132.6 93.8 38.8 41.3 484.2
IFRS IFRS IFRS
Operating profit 1-3/ 2011 1-3/ 2010 change,MEU change, % 1-12/ 2010
(EUR million) R
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Operations in Finland 4.4 6.7 -2.4 -35.1 26.4
International -2.4 -3.9 1.5 -8.0
Operations
Other Operations -1.0 -1.2 0.2 -5.9
Eliminations 0.0 -0.1 0.1 0.0
Group, total 1.0 1.6 -0.6 -35.4 12.5
Operating profit IFRS IFRS IFRS
(%) 1-3/2011 1-3/2010 1-12/2010
-------------------------------------------------------
-------------------------------------------------------
Operations in Finland 3.5 7.2 5.7
International Operations -28.4 -517.7 -37.1
Group, total 0.8 1.7 2.6
Order backlog IFRS IFRS change, change, IFRS
(EUR million) 3/2011 3/2010 MEUR % 12/2010
-------------------------------------------------------------------
-------------------------------------------------------------------
Domestic operations 589.8 506.1 83.7 16.5 574.5
International operations 112.4 24.0 88.5 369.2 20.0
Group, total 702.2 530.0 172.1 32.5 594.5
- sold order backlog 569 389 180 46.2 442
- unsold order backlog 133 141 -8 -5.6 153
Earnings trends of the Segments
IFRS IFRS IFRS
Domestic Operations 1-3/ 2011 1-3/ 2010 change,MEUR change, % 1-12/ 2010
(EUR million)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue 123.9 93.0 31.0 33.3 462.3
- business 75.3 68.9 6.4 9.3 353.2
construction
- housing construction 48.8 24.1 24.6 102.2 109.4
Operating profit 4.4 6.7 -2.4 -35.1 26.4
Operating profit, % 3.5 7.2 5.7
Order backlog 589.8 506.1 83.7 16.5 574.5
- business 277.7 365.9 -88.1 -24.1 271.6
construction
- housing construction 312.0 140.2 171.8 122.5 302.9
Domestic Operations comprises construction operations of SRV Construction Ltd
and property development. Domestic operations has been divided into business
premises including retail, office, logistics and rock construction operations
as well as housing construction.
Revenue in Domestic Operations was EUR 123.9 million (EUR 93.0 million) and its
share of total revenue of the Group was 94 per cent (99%). Operating profit was
EUR 4.4 million (EUR 6.7 million) generating an operating profit margin of 3.5
per cent (7.2%). The decrease in operating profit was attributable to the
weakening of profitability level in business construction due to increased
share of contract-based order backlog and lower profit margin as well as an
increased level of construction costs. The order backlog grew by 16.5 per cent
and was EUR 589.8 million (EUR 506.1 million).
Business Premises construction
Revenue in Business Premises construction was EUR 75.3 million (EUR 68.9
million). The order backlog was EUR 277.7 million (EUR 365.9 million).
Competition for new contracts remained tight.
The projects completed during the review period include, for example, raising
the height of the car park facilities at the Helsinki Fair Centre in Pasila,
Helsinki for the Finnish Fair Corporation; changes to the Sähkötalo building in
Kamppi, Helsinki; changes to the business premises of the European Chemicals
Agency of the European Union in downtown Helsinki; and, the renovation of the
Forum shopping centre in Jyväskylä for Citycon.
During the review period, contracts worth EUR 48.6 million were signed with
external clients. In March, SRV and Länsimetro Oy signed a contract for the
excavation work in Otaniemi related to the construction of the west metro. The
contract includes the excavation work for two long parallel metro tunnels of
approximately 1.6 kilometres each and two vertical shafts, as well as the
construction of the station and signal boxes. The work in Otaniemi will be
complete in September 2013.
Contracts for the following projects were also signed during the review period:
the basic renovation of the Viikki laboratory building with the University of
Helsinki; implementing the extension of the Shopping Centre Zeppelin in
Kempele; a new construction for the Jyväskylä Hospital School; and, as an
addition to a previously signed contract with the Hospital District of
Southwest Finland for foundation work, a contract for the construction of
equipment storage facilities for the Turku University Hospital.
Housing Construction
Revenue in Housing Construction was EUR 48.8 million (EUR 24.1 million). The
order backlog grew by 123 pe cent and was EUR 312.0 million (EUR 140.2
million). SRV has increased significantly its housing production and at the
close of the review period SRV had a total of 1,956 residential units under
construction. 84 per cent of the production under construction was implemented
under building contracts ofr they were SRV's own production which had already
been sold.
During the review period, housing construction contracts worth EUR 37.6 million
were signed with external clients. Contracts were concluded with the
construction company TA Asumisoikeus Oy for the construction of four sites and
182 right-of-occupancy units in Espoo's Vanttila and Saunalahti. Contracts with
YH-Länsi Oy were concluded in Pirkanmaa for two construction projects that
include 42 residential units in Kangasala and 31 units in Ylöjärvi. These
Pirkanmaa projects will be implemented on lots already owned by SRV. In
Joensuu, 17 right-of-occupancy units will be constructed for Avain
Rakennuttajat.
SRV started a total of 122 developer contracting housing projects during the
review period. Eighteen high-end single-family houses will be built for Espoon
Kaisla in Saunalahti, Espoo. A 29-unit apartment building will be constructed
for Lahden Alfred in downtown Lahti, a 26-unit apartment building will be built
for Kaarinan Klarinetti in downtown Kaarina, and 23 residential units for
Ylöjärven Kultasiipi will be built in downtown Ylöjärvi. In addition, a 26-unit
apartment building called Saarijärven Kimallus will be constructed in downtown
Saarijärvi. On top of the projects initiated during the review period, SRV has
decided to start the construction of 221 residential units in the Helsinki
Metropolitan Area and 51 units in Pirkanmaa.
In total, 147 (95) of the developer contract housing projects' apartments were
sold during the review period. At the end of the period, there were 660 (247)
apartments under construction, with 310 (169) left unsold. There were 86 (138)
completed and unsold apartments, of which 12 were rented out by the end of the
period. In total, 67 (16) developer contract housing projects' apartments were
completed during the period, as the first two in a group of four apartment
buildings were completed in Martinlaakso, Vantaa.
Housing production in Finland 1-3/ 1-3/ change, 1-12/
2011 2010 units 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Developer contracting
Start-ups 122 0 122 543
Sold 147 95 52 524
Completed 67 16 51 201
Completed and unsold 86 138 -52 137
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Under construction, total 1) 2) 1 956 950 1 006 1 629
- negotiation and construction 1 296 703 593 1 024
contracts 1) 2)
- developer contracting 1) 660 247 413 605
- of which unsold 1) 310 169 141 284
1)at the end of the period
Based on the current schedules of completion, SRV estimates 34 residential
units to be completed during the second quarter and a total of 508 developer
contracting residential units in the entire year of 2011.
SRV continued to participate 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. In
addition to SRV, other participants in this project, which is partly funded by
the Finnish Funding Agency for Technology and Innovation Tekes, include the
Finnish Innovation Fund Sitra and VVO Yhtymä Oyj, as well as an international
design team put together on the basis of a sustainable construction-related
competition organised in 2009. The City of Helsinki has allocated a whole block
in Jätkäsaari to be built in accordance with the Low2No concept by Sitra, SRV,
and VVO. The residential and commercial units within this block will be
designed using innovative environmental, spatial, and service-based planning to
be implemented as a multi-purpose environment that responds to changing work
and living habits. IFRS IFRS IFRS
International 1-3/ 2011 1-3/ 2010 change, change,% 1-12/ 2010
Operations MEUR
(EUR million)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue 8.4 0.7 7.6 1018.3 21.7
Operating profit -2.4 -3.9 1.5 -8.0
Operating profit, % -28.4 -517.7 -37.1
Order backlog 112.4 24.0 88.5 369.2 19.2
International Operations comprises business activities of the SRV International
subgroup in Russia and the Baltic countries.
Revenue in the International Operations was EUR 8.4 million (EUR 0.7 million)
and its share of total revenue of the Group was 6 per cent (1%). Operating loss
was EUR 2.4 million (a loss of EUR 3.9 million). The order backlog was EUR
112.4 million (EUR 24 million).
Russia
The OOO Pearl Plaza, jointly owned by SRV and the Shanghai Industrial
Investment Company, made a decision in January concerning the first phase of
the shopping centre project in St. Petersburg. The value of investment is
approximately EUR 130 million and funding for the project mainly comes from
China. SRV's ownership in this joint venture is 50 per cent. SRV will invest
approximately EUR 20 million in the implementation of the first phase. At the
same time, SRV signed a project management contract worth approximately EUR 100
million for the planning and construction of an 87 000 m2 shopping centre. The
shopping centre will be completed in spring 2013. The first letter of intent
was signed with the Finnish Prisma supermarket operator SOK, who will lease 7
600 m2 for a Prisma hypermarket. The building permit planning for the site was
started immediately and the construction site's preparation work will be
launched in the course of this spring.
SRV continued the development of the Septem City project in St. Petersburg,
which comprises 8.5 hectares of land in the Ohta region. The plans for the area
include constructing a shopping centre, office, and business premises, as well
as premises for hotel, restaurant, and entertainment services. This project
will be implemented in several phases and the first phase will be to construct
a shopping centre. The shopping centre concept has received preliminary
approval and the process of detaching the first phase as its own legal
structure has been initiated. SRV has invested approximately EUR 51.8 million
in the acquisition of land areas and properties. The estimated amount of SRV's
further investment in land acquisition is about EUR 8 million. Currently SRV
has an 87.5 per cent ownership in the project, but it will decrease to 77.5 per
cent once all the ownership arrangements have been finalised in accordance with
the cooperation contract.
The development of the Eurograd logistics area in St. Petersburg continued. SRV
has 49 per cent ownership in the Russian company that possesses a 24.9 hectare
land area located north of St. Petersburg, in the immediate vicinity of the
Ring Road. There are plans to build more than 100 000 square metres of
logistics premises in several phases over the course of the next few years. The
zoning of the area for logistics has been completed.
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. The other
investors involved in the fund are VTB Capital and Ashmore Group Plc
('Ashmore'), together with the funds they control, as well as 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 project
management contracts. The fund is currently primarily analysing Elite
residential sites as well as office, commercial, and hotel sites in the heart
of Moscow.
More than 92 per cent of the premises of the Etmia II office and parking house
project in the heart of Moscow have been 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.
The financing of the Mytishi shopping centre project in the Moscow region has
not advanced, and the 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.
SRV continued the renovation of the old Aeroport hotel at Sheremetyevo airport
in Moscow, as well as the renovation of 200 rooms in the Pulkovskaya Hotel in
St. Petersburg. During the review period, a new contract was signed for the
renovation of the Pribaltiskaya Hotel's Aqua Park located in St. Petersburg.
All three hotels belong to the Wenaas Group. The projects are a continuation of
cooperation already started in 2007.
In the city of Vyborg, four apartments in the Papula residential area were sold
during the review period. A total of 21 housing units have been sold, while 17
units remained unsold at the end of the period.
Baltic countries
Business volumes in the Baltic countries were low. In Estonia, 2 (4)
residential units were sold during the period. There were 15 (27) completed but
unsold units at the end of the period.
In Latvia, the construction of the international school was in progress
according to the construction contract between SRV and the International School
of Latvia.
IFRS IFRS IFRS
Other Operations 1-3/ 2011 1-3/ 2010 change, MEUR change,% 1-12/ 2010
(EUR million)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Revenue 3.3 2.5 0.7 28.8 10.3
Operating profit -1.0 -1.2 0.2 -5.9
Other operations comprise mainly the businesses of SRV Group Plc and SRV
Kalusto Oy (equipment).
Revenue of Other Operations during the review period was EUR 3.3 million (EUR
2.5 million) and operating loss was EUR 1.0 million (a loss of EUR 1.2
million). The positive trend in revenue and operating profit was attributable
to higher operation volumes.
Group project development
SRV's proposal for implementing the Kalasatama Centre project in Helsinki moved
forward. The Real Estate Committee of the City of Helsinki has made a proposal
for the Helsinki City Council to elect SRV as the winner of the competitive
bidding for the implementation of the site. The final decision by the City
Board is expected to be made in May. According to SRV's plans, the total floor
area of the Kalasatama Centre is 176 000 m2, divided into residential units (86
000 m2), business and service premises (55 000 m2), office spaces (14 000 m2),
and hotel premises (10 000 m2). The construction of an 11 000 m2 social and
health care service centre for the City is also included in the project.
The local plan changes related to SRV's residential tower plans in Espoo's
Keilaniemi area go under review by the Espoo City Planning Committee in April.
The plan proposal is available to the public from the beginning of May until
the end of June. The plans for the site include some 72 000 m2 for apartments
and 9 000 m2 for offices.
SRV is developing a regional development project in connection with the future
Niittykumpu metro station in cooperation with the Mutual Pension Insurance
Company Varma and Sato Corporation. The City of Espoo granted a planning
reservation for the project in June 2010. The plans for the area mainly
comprise housing construction as well as a shopping centre. The overall size of
the area to be developed is approximately 140 000 m2. This includes some 80 000
m2 of city land covered by the planning reservation, of which SRV's share is
one third. As part of the development project, SRV has purchased the Niittytori
shopping centre. The local plan for the area will include the right to build
approximately 15 000 m2 of housing. The draft local plan for the area has been
submitted to the Real Estate Committee and will be handled in May.
SRV has started the construction of an office building complex at Derby
Business Park located in Perkkaa, Espoo. The site includes three office
buildings (20 000 m2) that will house, among others, the Siemens headquarters
for Finnish operations and the headquarters of SRV. As part of the project, the
former Siemens headquarters building, purchased through a joint venture by SRV,
Sato Corporation, and the Mutual Pension Insurance Company Varma, will be
re-developed into a building suitable for housing construction. The local plan
changes for the area are pending. The target for residential floor area is
110,000-120,000 m2. The plan proposal is expected to be handled by the City
Planning Committee in the autumn of 2011.
Financing and financial position
Net operational cash flow was EUR -18.0 million negative (EUR -7.1 million in
January-March 2010). The weakening of the cash flow during the review period
was attributed to the increase of inventories. The Group's inventories were EUR
330.6 million (EUR 290.0 million), the share of land areas and plot-owning
companies being EUR 191.4 million (EUR 165.9 million). The Group's invested
capital amounted to EUR 410.6 million (EUR 357.5 million).
At the end of the review period, the Group's financing reserves were EUR 132.1
million, of which the Group's cash assets amounted to EUR 9.4 million and the
share of committed undrawn financing reserves amounted to EUR 101.7 million. In
addition, the group had committed financing commitments amounting to EUR 29.4
million. The Group's net interest-bearing liabilities were EUR 246.4 million on
31 March. Net financing incomes totalled EUR 0.7 million (net financing
expenses EUR 1.4 million). The increase of financing incomes was attributable
to gains from interest rate swaps, exchange rate gains and financial incomes
from associated companies.
Investments in SRV's developer contracting housing projects in Finland
including completed, unsold projects, total around EUR 81.4 million. SRV
estimates that the completion of these projects requires another EUR 71.7
million. Undrawn housing corporate loans related to RS projects totalled EUR
85.0 million. Investments in the business premises projects on a developer
contracting basis total EUR 25.7 million. Investments in the completed
international projects total EUR 38.4 million, of which unsold residential
projects in Estonia amount to EUR 1.0 million, and EUR 2.1 million in Vyborg.
EUR 38.8 million is invested in the Etmia office project.
Equity ratio was 33.2 per cent (37.0%). 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 increasein inventories. The Group's shareholders' equity totalled EUR 152.6 million
(EUR 147.5 million on 31 March 2010). The return on investment was 2.5 per cent
(2.5%) and the return on equity was 2.9 per cent (-1.7%).
Investments
The Group's investments totalled EUR 1.5 million (EUR 0.5 million) and were
mainly related to the acquisition of machinery and equipment.
Unbuilt land areas, land acquisition commitments and land development agreement
Land reserve Business Housing International Total
31.3.2011 construction construction Operations
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-
Unbuilt land areas and land acquisition commitments
Building rights*, 229 000 262 000 861 000 1 352 000
m2
Land development
agreements
Building rights*, 556 000 296 000 152 000 1 004 000
m2
* 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
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 Domestic Operations, International Operations, and
Other Operations. Domestic Operations comprises construction operations of SRV
Construction Ltd and property development. Domestic operations has been divided
into business premises including retail, office, logistics and rock
construction operations as well as housing construction. 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
As of 1 January 2011, SRV merged Business Premises and Housing and Regional
business areas in Finland. SRV Construction Ltd is responsible for domestic
operations. SRV Asunnot Oy, representing housing business, was merged to SRV
Construction Ltd as of 31 March 2011.
Changes in the Group management
Taneli Hassinen was appointed Group's Director, 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 788 (773) employees, of whom 576 (534) were
white-collar. The parent company had an average staff of 45 (46) white-collar
employees. At the close of the review period, the Group had 790 (786)
employees, of whom 46 (45) were employed by the parent company. 140 (164)
employees work in subsidiaries abroad. At the end of the review period, SRV had
a total of 22 (20) 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).
Personnel by business 31.3.2011 31.3.2010 Share of Group personnel,
area 31.3.2011, %
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Domestic operations 550 521 69,6
International 154 183 19,5
operations
Other Operations 86 82 10,9
Group, total 790 786 100,0
The Board of Directors of SRV Group Plc decided on 17 February 2011 on a new
long-term share-based incentive plan for the SRV Group key personnel. The Plan
is directed to approximately 70 employees. The Plan is valid for the years
2011-2016, and the potential reward from the Plan is based on the increase in
SRV Group Plc's share price. The Plan is carried out as share bonus rights.
Their value is based on the price development of SRV's shares. The maximum
total amount of bonus rights granted is 2,000,000.
According to the incentive plan terms half of the value increase calculated
from the price development of SRV's share is given to the key employees in
SRV's shares and half is paid in cash for taxes arising from the bonus. There
is a restriction concerning the transfer of shares and a restriction period.
Based on the plan, 1,688,000 bonus rights have been granted totaling a
theoretical market value of around EUR 2.3 million on 16 February 2011. The
theoretical market value is calculated by the Black & Scholes model used for
pricing options with the following criteria: share price EUR 7.43, reference
share price EUR 6.81, risk-free interest rate 2.5% and volatility 33 per cent.
Outlook for construction
The recovery of the world economy continues, but it is slow and unstable. The
European Central Bank has increased the interest rate to 1.25 per cent, but the
pressure still remains for further increases. The expected growth of the
Finnish economy is 3-4 per cent in 2011. The situation in the real-estate and
construction markets remains challenging, especially with regard to commercial
construction.
The total number of new constructions is clearly higher than a year ago, but
the total number of building rights went down in early 2011. Construction costs
keep climbing.
Strong consumer confidence and interest rates that are low for now have kept
demand at a decent level in the housing market. The volume of new start-ups for
developer contracting housing has been high in early 2011. Weak employment
trends, increased interest rates, or disruptions in the global economy caused
by crises may have negative short-term effects on the housing market. 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 construction of business premises and office spaces
remained low during the review period. The vacancy rates of office spaces are
particularly high and construction activity is slow.
Renovation activity continues to grow slightly this year. The outlook for land
and water construction is reasonably good in the Helsinki metropolitan area as
the result of several public infrastructure projects that have been initiated,
but elsewhere the situation is weaker.
The economy in the Baltic countries is on a slight upswing. The prediction is
that overall production in Estonia, Latvia, and Lithuania will increase by
about 3-4 per cent in 2011. However, activity in the construction sector and
real-estate market remains at a low level.
The Russian market situation continues to present challenges. The national
economy of Russia has recovered with the rising oil prices and the interest
rate has come down. Consumption is expected to pick up. However, growth of
inflation together with limited availability of financing may slow down the
positive economic trend. In 2011, Russia's total production is expected to grow
by about 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 demand for property investments has remained weak. Interest rates are low,
but pressures to raise rates exist. 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, remains low due to difficulties
in securing financing. SRV's risk to be forced to tie up capital in projects
longer than intended is higher than before.
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.
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. Construction sector has implemented an invert value added tax
policy. As new procedure it requires reinforced accuracy from administration.
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. SRV measures its land reserves at cost of acquisition according to
IFRS standard. If the cost of acquisition, added with construction costs, is
lower than the fair value of the property, the value of the property will be
reduced. 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 2010. 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.
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 (EUR 100
million), which mature partly in 2012 and partly in 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 has been disclosed in the 2010 Annual Report and Notes to
the Financial Statements.
Corporate governance and resolutions of general meetings
The Annual General Meeting of SRV Group Plc was held on 15 March 2011. The AGM
adopted the financial statements 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. The dividend was paid on 25 March 2011. Mr
Ilpo Kokkila was elected chairman of the Board of Directors and Mr Arto
Hiltunen, Mr Olli-Pekka Kallasvuo, Mr Timo Kokkila, 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.
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. Based on these authorisations,
the shares can be acquired in single or multiple parts.
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 15 March 2011, the Board of Directors elected
Olli-Pekka Kallasvuo vice chairman of the Board, Matti Mustaniemi chairman of
the Audit Committee, Olli-Pekka Kallasvuo 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 6,029 shareholders on 31 March 2011.
The company received one flagging notification during the review period. Bank
AB (publ) announced that as a result of the transaction on 15 March 2011 its
holding of SRV Group Plc's shares and voting rights fell below 1/20 and Nordea
Pankki Suomi Oyj's holding of SRV Group Plc's shares and voting rights exceeded
1/20. Moreover, Nordea Pankki Suomi Oyj had sold to Nordea Bank AB (publ)
share-related derivative contracts (1,909,483 shares), which will mature on 15
April 2011. Therefore Nordea Bank AB's (publ) holding in SRV Group Plc will
exceed 1/20 and Nordea Pankki Suomi Oyj's holding will fall below 1/20. Nordea
has made a derivative contract (total return swap) with SRV Group Plc for the
same amount of shares. As the contract matures, Nordea's holding of SRV Group
Plc's shares and voting rights will fall below 1/20.
The share closing price at OMX Helsinki at the end of the review period was EUR
6.75 (EUR 6.63 on 31 December 2010). The highest share price in the review
period was EUR 7.43 and the lowest was EUR 5.80. The change in the all-share
index of the Helsinki Stock Exchange (OMX Helsinki) during the same period was
-1.9 per cent and the OMX Industrial and Services index -2.3 per cent.
At the end of the review period, the company had a market capitalisation of EUR
229.3 million, excluding the Group's own shares. About 2.3 million shares were
traded during the financial year and the trade volume was EUR 15.5 million.
At the end of the review period, SRV and Nordea Pankki Suomi Oyj had derivative
contract (total return swap) for 1,909,483 SRV's shares on a price of EUR 4.45
per share (totaling EUR 8.5 million). These shares are considered equal to
treasury shares held by the company. As the contract matures, the shares will
be sold to SRV Group Plc or an entity named by SRV.
At the end of the review period, SRV Group Plc held 2,803,509 its own shares,
taking the derivative contract into consideration (7.6 per cent of the total
number of the company's shares and voting rights). On 3 May 2011 the Group held
1,254,533 shares (3.4 per cent of the total number of the shares and voting
rights).
After the review period, SRV Group Plc reduced the number of its own shares,
which is described more detailed in the “Events after the end of the review
period”. 3 May 2011 the Group held 701,700 company's own shares representing
1.9 per cent of the company's shares (taking the derivative contract into
consideration, 1,254,533 shares representing 3.4 per cent of the company's
shares).
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. Realisation of the sales
of developer contracting projects has a substantial effect on the development
of profitability.
Events after the end of the review period
After the review period on 11 April 2011, SRV Group Plc reduced its holding in
own shares by implementing a directed share issue, in which 1,500,000 million
shares were offered, in deviation from shareholders' pre-emptive rights, for
subscription at a price of EUR 6.60 per share. Arrangement was executed on 11
April 2011 by Evli Bank Plc.
Related to the arrangement, SRV made a direct acquisition of 1,356,650 company
shares using the company's unrestricted equity. The shares were acquired on 11
April 2011 from Nordea Bank AB (publ.) at a price of EUR 4.45 per share. The
acquisition took place as part of a derivatives contract concluded between the
company and Nordea on 5 January 2010. The derivatives contract will continue in
respect of 552,833 shares, which are considered equal to treasury shares held
by the company. As the contract matures, the shares will be sold to SRV Group
Plc or an entity named by SRV. The arrangement increased SRV's shareholders'
equity by EUR 9.9 million.
Outlook for 2011
SRV maintains its outlook for 2011. Revenue and profit before taxes in 2011 are
expected to exceed the previous year's level.
Espoo 3 May 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, 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
Key figures: IFRS IFRS IFRS
1-3/ 1-3/ 1-12/
2011 2010 2010
--------------------------------------------------------------------------------
Revenue EUR 132.6 93.8 484.2
mill.
Operating profit EUR 1.0 1.6 12.5
mill.
Operating profit, % of revenue % 0.8 1.7 2.6
Profit before taxes EUR 1.7 0.2 7.9
mill.
Profit before taxes, % of revenue % 1.3 0.2 1.6
Net profit attributable to equity holders EUR 1.6 -0.4 6.4
of the parent company mill.
Return on equity 1) % 2.9 -1.7 3.2
Return on investment 1) % 2.5 2.5 4.1
Invested capital EUR 410.6 357.5 387.1
mill.
Equity ratio % 33.2 37.0 35.2
Net interest-bearing debt EUR 246.4 199.8 222.8
mill.
Gearing ratio % 159.1 132.3 141.7
Order backlog EUR 702.2 530.0 594.5
mill.
New agreements EUR 220.2 140.6 559.9
mill.
Personnel on average 788 773 794
Property, plant and equipment investments EUR 1.5 0.5 2.3
mill.
Property, plant and equipment investments, % 1.1 0.5 0.5
% of revenue
Earnings per share, share issue adjusted EUR 0.05 -0.01 0.19
Equity per share, share issue adjusted EUR 4.49 4.36 4.56
Dividend per share, share issue adjusted EUR 0.12 0.12 0.12
Dividend payout ratio % 240.0 -1 200.0 63.2
Dividend yield % 1.8 1.9 1.8
Price per earnings ratio 135.0 -641.0 34.9
Share price development
Share price at the end of the period EUR 6.75 6.41 6.63
Average share price EUR 6.89 5.95 6.42
Lowest share price EUR 5.80 5.50 5.50
Highest share price EUR 7.43 6.55 7.14
Market capitalisation at the end of the EUR 229.3 216.9 224.8
period mill.
Trading volume 1 000 2 265 5 837 12 114
Trading volume % 6.7 17.2 35.7
Weighted average number of shares 1 000 33 930 33 964 33 923
outstanding
Number of shares outstanding at the end of 1 000 33 965 33 843 33 901
the period
1) In calculating the key ratio only the profit for the period has been
annualised
Calculation of key figures:
Gearing ratio, % Net interest-bearing debt x 100 /
Total equity
Return on equity, % Profit before taxes - income taxes) x 100/
Total equity. average
Return on investment, % (Profit before taxes + interest and other financial
expenses) x 100 /
Invested capital. average
Equity ratio, % Total equity x 100 /
(Total assets - advances received)
Invested capital Total assets - non-interest bearing debt - deferred tax
liabilities - provisions
Net interest bearing Interest bearing debt - cash and cash equivalents
debt
Earnings per share, Net profit for the period attributable to equity
share issue adjusted holders of the parent company /
Weighted average number of shares outstanding
Equity per share, share Shareholders' equity attributable to equity holders of
issue adjusted the parent company /
Number of shares outstanding at the end of the period.
share issue adjusted
Price per earnings Share price at the end of the period /
ratio Earnings per share. share issue adjusted
Dividend payout ratio, Dividend per share. share issue adjusted x 100 /
% Earnings per share. share issue adjusted
Dividend yield, % Dividend per share. share issue adjusted x 100 /
Share price at the end of the period. share issue
adjusted
Average share price Number of shares traded in euros during the period /
Number of shares traded during the period
Market capitalisation Number of shares outstanding at the end of the period x
at the end of the share price at the end of the period
period
Trading volume Number of shares traded during the period and in
relation to the weighted average number of shares
outstanding
SRV Group Plc Interim Report 1.1. - 30.3.2011: TABLES
Appendixes
1) Condensed consolidated financial statements: income statement, balance
sheet, statement of changes in equity, cash flow statement, commitments and
contingent liabilities, derivative contracts liabilities
2) Quarterly development
3) Segment information
4) Events after the reporting period
1. Group financials 1.1. - 31.3.2011
The interim report has been prepared in accordance with the accounting policies
set out in the IAS 34 standard and the information disclosed is unaudited. SRV
has applied the same accounting principles as in its year-end financial
statements for 2010. The figures in the tables have been rounded which should
be noted when counting the total sums.
SRV's reporting segments comprise Domestic Operations, 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.
As of 1 January 2011, SRV will provide a consolidated financial statement
regarding its subsidiaries and joint ventures, compiled using the equity
method. The comparative figures have been calculated accordingly. The Group's
consolidated income statement includes earnings per share from the joint
venture. Correspondingly, the balance sheet includes the Group's share of the
joint venture's capital, including the goodwill incurred by the acquisition of
subsidiaries. If the Group's share of joint venture losses exceeds the book
value, the losses in excess of the book value will be eliminated in the
consolidated financial statement, unless the Group has committed to meet joint
venture liabilities. Unrealised gains between the Group and the joint venture
have been eliminated in accordance with the Group's ownership share.
Estimate of the impacts of the new standards, changes and interpretations:
As from 1 January 2010, SRV Group will apply IFRIC 15 Agreements for the
Construction of Real Estate in its reporting. This interpretation concerns the
recognition of revenue from developer contracting projects. The interpretation
specifies whether revenue from a construction project should be recognised on a
percentage of completion basis or upon delivery. The adoption of the
interpretation primarily affects the recognition of revenue from SRV Group's
developer contracting housing projects. 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 change in revenue recognition affects SRV Group's income statement and
balance sheet items, the key figures based on them, and the order backlog. It
will result in greater variation between quarterly trends in revenue andearnings, as the recognition of revenue from developer contracting projects may
depend on the date of their completion. The delayed revenue recognition of
projects will increase the balance sheet total and weaken the key figures
calculated on the basis of the balance sheet.
SRV Group's internal management reporting follows earnings in line with the new
interpretation and the Group publishes its segment reports in accordance with
the new accounting principles.
The following standards, amendments and interpretations shall be applied as
from the accounting period beginning on 1 January 2011 or thereafter. 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.
-- 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.
-- Annual improvements 2010 (effective on 1 January 2011). The Group will
apply this amendment as of 1 January 2011.
Consolidated income IFRS IFRS IFRS
statement 1-3/ 1-3/ change change 1-12/
(EUR million) 2011 2010 , MEUR ,% 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Revenue 132.6 93.8 38.8 41.3 484.2
Other operating income 1.1 0.8 0.3 39.0 3.2
Change in inventories of finished goods -0.5 12.0 -12.5 -104.0 28.2
and work in progress
Use of materials and services -115.0 -89.7 -25.3 28.2 -435.8
Employee benefit expenses -13.0 -11.7 -1.3 10.7 -49.6
Depreciation and impairments 0.0 0.0 -0.4
Other operating expenses -0.8 -0.8 0.0 -1.1 -3.5
Operating profit -3.3 -2.7 -0.6 21.2 -13.8
Financial income 1.0 1.6 -0.5 -35.4 12.5
Financial expenses 1.4 0.6 0.8 132.3 3.1
Financial income and expenses, total -0.8 -2.0 1.3 -62.8 -7.6
Profit before taxes 0.7 -1.4 2.1 -149.3 -4.5
Income taxes 1.7 0.2 1.5 960.9 7.9
Net profit for the period -0.6 -0.8 0.2 -28.8 -2.8
1.1 -0.7 1.8 -271.7 5.2
Attributable to
Equity holders of the parent company 1.6 -0.4 6.4
Minority interest -0.5 -0.2 -1.2
Earnings per share calculated on the 0.05 -0.01 0.19
profit attributable to equity holders
of the parent company (undiluted and
diluted)
IFRS IFRS IFRS
Statement of comprehensive income 1-3/ 2011 1-3/ 2010 1-12/ 2010
(EUR million)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net profit for the period 1.1 -0.7 5.2
Items recognised directly in equity:
Exchange differences on translating foreign 0.0 0.0 0.0
operations
Available for sale financial assets 0.0 0.0 0.1
Net gain (loss) on cash flow hedges 0.0 0.0 0.0
Deferred tax 0.0 0.0 0.0
Income (loss) recognised directly in equity 0.0 0.0 0.0
net of tax
Total comprehensive income for the period 1.1 -0.7 5.2
Profit for the period attributable to:
Equity holders of the parent company 1.6 -0.5 6.4
Minority interest -0.5 -0.2 -1.2
Consolidated balance sheet IFRS IFRS change, IFRS
(EUR million) 31.3.11 31.3.10 % 31.12.10
------------------------------------------------------------------
------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 14.2 15.9 -10.8 14.0
Goodwill 1.7 1.7 0.0 1.7
Other intangible assets 0.4 0.4 -16.3 0.4
Other financial assets 5.6 4.8 16.7 5.2
Receivables 21.1 17.2 22.8 22.8
Deferred tax assets 5.8 4.6 26.2 5.1Non-current assets, total 48.8 44.7 9.2 49.2
Current assets
Inventories 330.6 290.0 14.0 324.1
Trade and other receivables 103.0 85.4 20.5 96.0
Current tax receivables 1.9 3.2 -40.5 1.5
Cash and cash equivalents 9.4 6.6 42.1 7.1
Current assets, total 444.9 385.3 15.5 428.8
ASSETS, TOTAL 493.7 430.0 14.8 478.0
Consolidated balance sheet IFRS IFRS change IFRS
,
(EUR million) 31.3.1 31.3.1 % 31.12.1
1 0 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to equity holders of the
parent company
Share capital 3.1 3.1 0.0 3.1
Invested free equity fund 87.8 87.3 0.5 87.8
Translation differences -0.1 -0.1 -0.1 -0.1
Fair value reserve 0.0 -0.1 -100.0 0.0
Retained earnings 61.9 57.2 8.1 63.8
Equity attributable to equity holders of the 152.6 147.5 3.5 154.5
parent company, total
Minority interest 2.3 3.5 -36.3 2.7
Equity, total 154.8 151.0 2.5 157.2
Non-current liabilities
Deferred tax liabilities 1.0 1.1 -11.0 0.7
Provisions 4.1 4.7 -14.3 4.2
Interest-bearing liabilities 67.4 62.4 8.0 78.8
Other liabilities 0.4 0.8 -46.0 0.4
Non-current liabilities, total 72.8 69.0 5.6 84.1
Current liabilities
Trade and other payables 69.3 58.0 19.5 78.6
Current tax payables 4.2 3.5 19.8 3.4
Provisions 4.1 4.3 -6.2 3.5
Interest-bearing liabilities 188.4 144.1 30.8 151.1
Current liabilities, total 266.0 210.0 26.7 236.7
Liabilities, total 338.8 279.0 21.5 320.8
EQUITY AND LIABILITIES 493.7 430.0 14.8 478.0
Consolidated cash flow statement IFRS IFRS IFRS
(EUR million) 1-3/2011 1-3/2010 1-12/201
0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash flows from operating activities
Net profit for the period 1.1 -0.7 5.2
Adjustments:
Depreciation and impairments 0.8 0.8 3.5
Non-cash transactions 1.1 9.4 0.7
Financial income and expenses -0.7 1.4 4.5
Capital gains on sales of tangible and intangible 0.0 0.0 0.0
assets
Income taxes 0.6 0.8 2.8
Adjustments, total 1.8 12.5 11.5
Changes in working capital:
Change in loan receivables -0.5 -4.7 -2.7
Change in trade and other receivables -4.4 6.7 -9.7
Change in inventories -6.3 -9.6 -43.8
Change in trade and other payables -8.4 -7.8 21.7
Changes in working capital, total -19.5 -15.5 -34.4
Interest paid -2.5 -1.4 -7.7
Interest received 1.7 1.0 1.7
Dividends received 0.0 0.0 0.1
Income taxes paid -0.6 -3.0 -4.2
Net cash flow from operating activities
Cash flows from operating activities -18.0 -7.1 -27.8
Cash flow from investing activities
Acquisition of subsidiaries, net of cash 0.0 0.0 -0.3
Property, plant and equipment -1.0 -0.5 -1.5
Intangible assets 0.0 0.0 -0.1
Other financial assets -0.4 0.0 -0.4
Sale of property, plant and equipment and 0.0 0.0 0.2
intangible assets
Sale of financial assets 0.0 0.0 0.0
Net cash used in investing activities -1.4 -0.5 -2.2
Cash flows from financing activities
Proceeds from share issue 6.9 0.0 14.5
Proceeds from loans 0.0 -0.3 -6.1
Repayments of loans 0.0 0.0 0.0
Change in loan receivables -20.0 -6.8 -2.2
Change in housing corporation loans 39.0 20.1 38.2
Change in credit limits 0.0 0.0 -8.5
Purchase of treasury shares -4.1 -4.1 -4.1
Dividends paid 21.8 9.0 31.9
Net cash from financing activities 2.3 1.4 1.9
Net change in cash and cash equivalents 7.1 5.2 5.2
Cash and cash equivalents at the beginning of 9.4 6.6 7.1
period
Statements of changes in Group equity 1.1. - 31.3.2011
Equity attributable to
the equity holders of the parent company
-----------------------------------------------------------
IFRS Share Invested Trans-la Fair Retai- Total Minori Total
(EUR million) capita free tion value ned ty equity
l equity differ-e reserv earnin intere
fund nces e gs st
--------------------------------------------------------------------------------
Equity on 3.1 87.8 -0.1 0.0 63.8 154.5 2.7 157.2
1.1.2011
--------------------------------------------------------------------------------
Total income 0.0 0.0 0.0 1.6 1.6
and expenses
for the
financial
year
-----------------------------------------------------------------
Dividends -4.1 -4.1
paid
-----------------------------------------------------------------
Share based 0.6 0.6
incentive
plan
-----------------------------------------------------------------
Purchase of 0.0 0.0
treasury
shares
-----------------------------------------------------------------
Other changes 0.0 0.0
--------------------------------------------------------------------------------
Equity on 3.1 87.8 -0.1 0.0 61.9 152.6 2.3 154.8
31.3.2011
--------------------------------------------------------------------------------
Statements of changes in Group equity 1.1. - 31.3.2010
Equity attributable to
the equity holders of the parent company
-----------------------------------------------------------
IFRS Share Invested Trans-la Fair Retai- Total Minori Total
(EUR million) capita free tion value ned ty equity
l equity differ-e reserv earnin intere
fund nces 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 0.0 0.0 -0.5 -0.5
and expenses
for the
financial
year
-----------------------------------------------------------------
Dividends -4.1 -4.1
paid
-----------------------------------------------------------------
Share based 0.6 0.6
incentive
plan
-----------------------------------------------------------------
Purchase of -8.5 -8.5
treasury
shares
-----------------------------------------------------------------
Other changes -0.2 -0.2
--------------------------------------------------------------------------------
Equity on 3.1 87.3 -0.1 -0.1 57.2 147.5 3.5 151.0
31.3.2010
--------------------------------------------------------------------------------
Statements of changes in Group equity 1.1. - 31.12.2010
Equity attributable to
the equity holders of the parent company
-----------------------------------------------------------
IFRS Share Invested Trans-la Fair Retai- Total Minori Total
(EUR million) capita free tion value ned ty equity
l equity differ-e reserv earnin intere
fund nces 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 -4.1 -4.1
paid
-----------------------------------------------------------------
Share based 0.3 0.3
incentive
plan
-----------------------------------------------------------------
Purchase of -8.5 -8.5
treasury
shares
-----------------------------------------------------------------
Other changes 0.4 -0.3 0.2
--------------------------------------------------------------------------------
Equity on 3.1 87.8 -0.1 0.0 63.8 154.5 2.7 157.2
31.12.2012
--------------------------------------------------------------------------------
Commitments and contingent liabilities IFRS IFRS change IFRS
,
EUR million 31.3.1 31.3.1 % 31.12.1
1 0 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Collateral given for own liabilities
Real estate mortgages given 225.6 96.7 133.3 129.0
Pledges given 0.0 0.0 0.0
Other commitments
Guarantees given for liabilities on uncompleted 0.0 0.0 0.0
projects
Investment commitments given 21.3 22.0 -3.1 21.8
Plots purchase commitments 15.0 26.9 -44.3 16.6
1) Real estate mortgages include the total amount of mortgages given as
collateral for developer contracting housing production against the housing
corporation loans of uncompleted and unsold completed projects.
Fair and nominal values of IFRS IFRS IFRS
derivative instruments 31.3.11 31.3.2010 31.12.10
(EUR million)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Fair Values Fair Values Fair Values
Hedge accounting not applied Positiv Negat. Positiv Negat. Positiv Negat.
e e e
Foreign exchange forward 0.0 0.0 0.0 0.0 0.0 0.0
contracts
Interest rate swaps 0.0 0.4 0.0 1.5 0.0 1.3
IFRS IFRS IFRS
-------- -------- -------
-------- -------- -------
3/2011 3/2010 12/201
0
Nominal values of derivative
instruments
Foreign exchange forward 0.0 0.0 0.0
contracts
Interest rate swaps 50.0 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
(EUR million) 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Revenue 132.6 157.9 115.2 117.3 93.8
Operating profit 1.0 5.9 3.5 1.5 1.6
Financial income and expenses, total 0.7 -1.8 0.3 -1.6 -1.4
Profit before taxes 1.7 4.1 3.8 -0.1 0.2
Order backlog 1) 702.2 594.5 604.6 604.4 530.0
New agreements 220.2 120.1 112.6 186.7 140.6
Earnings per share, eur 0.05 0.10 0.08 0.02 -0.01
Equity per share, eur 1) 4.49 4.56 4.47 4.38 4.36
Share price, eur 1) 6.75 6.63 6.14 6.16 6.41
Equity ratio, % 1) 33.2 35.2 35.1 35.1 37.0
Net interest bearing debt 1) 246.4 222.8 229.7 217.2 199.8
Gearing, % 1) 159.1 141.7 147.9 142.7 132.3
Revenue IFRS IFRS IFRS IFRS IFRS
(EUR million) 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
------------------------------------------------------------------
------------------------------------------------------------------
Domestic operations 123.9 147.3 109.5 112.5 93.0
- business construction 75.3 98.9 94.2 91.1 68.9
- housing construction 48.8 48.5 15.3 21.5 24.1
International operations 8.4 10.5 5.7 4.7 0.7
Other Operations 3.3 2.8 2.5 2.5 2.5
Eliminations -3.0 -2.7 -2.5 -2.5 -2.5
Group, total 132.6 157.9 115.2 117.3 93.8
Operating profit IFRS IFRS IFRS IFRS IFRS
(EUR million) 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
------------------------------------------------------------------
------------------------------------------------------------------
Domestic operations 4.4 8.4 5.8 5.4 6.7
International operations -2.4 -0.7 -1.2 -2.2 -3.9
Other Operations -1.0 -2.0 -1.1 -1.6 -1.2
Eliminations 0.0 0.2 0.0 -0.1 -0.1
Group, total 1.0 5.9 3.5 1.5 1.6
Operating profit IFRS IFRS IFRS IFRS IFRS
(%) 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
------------------------------------------------------------------
------------------------------------------------------------------
Domestic operations 3.5 5.7 5.3 4.8 7.2
International operations -28.4 -7.1 -21.0 -46.9 -517.7
Group, total 0.8 3.7 3.0 1.3 1.7
Order backlog IFRS IFRS IFRS IFRS IFRS
(EUR million) 31.3.11 31.12.10 30.9.10 30.6.10 31.3.10
----------------------------------------------------------------------
----------------------------------------------------------------------
Domestic operations 589.8 574.5 581.2 578.6 506.1
- business construction 277.7 271.6 363.9 388.5 365.9
- housing construction 312.0 302.9 217.2 190.1 140.2
International operations 112.4 20.0 23.4 25.7 24.0
Group, total 702.2 594.5 604.6 604.4 530.0
- sold order backlog 569 442 443 426 389
- unsold order backlog 133 153 162 178 141
Invested capital IFRS IFRS IFRS IFRS IFRS
(EUR million) 31.3.11 31.12.10 30.9.10 30.6.10 31.3.10
----------------------------------------------------------------------
----------------------------------------------------------------------
Domestic operations 215.6 179.7 206.9 203.5 177.8
International operations 182.7 185.4 175.3 177.2 173.6
Other and eliminations 12.3 22.0 8.2 4.2 6.0
Group, total 410.6 387.1 390.3 384.9 357.5
Residential production IFRS IFRS IFRS IFRS IFRS
in Finland (units) 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Developer contracting
Start-ups 122 133 110 300 0
Sold 147 163 164 102 95
Completed 1) 67 171 14 0 16
Completed and unsold 1) 86 137 90 105 138
Under construction 1) 1 956 1 629 1 183 1 064 996
- negotiation and construction 1 296 1 024 540 517 749
contracts 1)
- developer contracting 1) 660 605 643 547 247
- of which unsold 1) 310 284 361 400 169
1) at the end of the period
3. Segment information
Assets IFRS IFRS change, change, IFRS
(EUR million) 31.3.11 31.3.10 MEUR % 31.12.10
----------------------------------------------------------------------
----------------------------------------------------------------------
Domestic operations 283.5 237.9 45.6 19.2 273.6
International operations 189.2 178.4 10.8 6.1 189.7
Other Operations 285.2 214.8 70.4 32.8 230.0
Eliminations -264.2 -201.0 -63.1 -215.4
Group, total 493.7 430.0 63.7 14.8 478.0
Liabilities IFRS IFRS change, change, IFRS
(EUR million) 31.3.11 31.3.10 MEUR % 31.12.10
----------------------------------------------------------------------
----------------------------------------------------------------------
Domestic operations 239.4 198.8 40.5 20.4 217.2
International operations 198.8 183.0 15.8 8.6 196.3
Other Operations 149.6 103.2 46.4 44.9 109.1
Eliminations -248.9 -206.1 -42.8 -202.0
Group, total 338.8 279.0 59.9 21.5 320.8
Invested capital IFRS IFRS change, change, IFRS
(EUR million) 31.3.11 31.3.10 MEUR % 31.12.10
----------------------------------------------------------------------
----------------------------------------------------------------------
Domestic operations 215.6 177.8 37.8 21.3 179.7
International operations 182.7 173.6 9.1 5.2 185.4
Other and eliminations 12.3 6.0 6.3 104.0 22.0
Group, total 410.6 357.5 53.1 14.9 387.1
Return on investment, IFRS IFRS IFRS
% 1-3/11 1-3/10 1-12/10
----------------------------------------------------
----------------------------------------------------
Domestic operations 1) 10.0 16.2 15.3
International operations 1) -3.2 -8.0 -3.2
Group, total 1) 2.5 2.5 4.1
Inventories IFRS IFRS change IFRS
,
(MEUR) 31.3.1 31.3.1 MEUR 31.12.1
1 0 0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Land areas and plot-owning companies 191.4 165.9 25.5 181.3
Domestic operations 100.0 82.1 17.9 90.7
International operations 91.1 83.5 7.6 90.3
Work in progress 59.9 25.8 34.2 46.8
Domestic operations 55.0 21.0 34.0 46.0
International operations 5.0 4.8 0.2 0.9
Shares in completed housing corporations and 57.8 80.6 -22.8 75.2
real estate companies
Domestic operations 52.5 75.7 -23.2 68.3
International operations 5.3 4.9 0.4 6.9
Other inventories 21.5 17.7 3.7 20.8
Domestic operations 11.4 9.1 2.3 11.3
International operations 10.0 9.7 0.4 10.6
Inventories, total 330.6 290.0 40.6 324.1
Domestic operations 219.0 188.0 31.0 216.3
International operations 111.4 102.8 8.6 108.7
1) In calculating the key ratio only the profit for the period has been
annualised
4. Events after the end of the review period
After the review period on 11 April 2011, SRV Group Plc reduced its holding in
own shares by implementing a directed share issue, in which 1,500,000 million
shares were offered, in deviation from shareholders' pre-emptive rights, for
subscription at a price of EUR 6.60 per share. Arrangement was executed on 11
April 2011 by Evli Bank Plc.
Related to the arrangement, SRV made a direct acquisition of 1,356,650 company
shares using the company's unrestricted equity. The shares were acquired on 11
April 2011 from Nordea Bank AB (publ.) at a price of EUR 4.45 per share. The
acquisition took place as part of a derivatives contract concluded between the
company and Nordea on 5 January 2010. The derivatives contract will continue in
respect of 552,833 shares, which are considered equal to treasury shares held
by the company. As the contract matures, the shares will be sold to SRV Group
Plc or an entity named by SRV. The arrangement increased SRV's shareholders'
equity by EUR 9.9 million.
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 |