SRV Yhtiöt Oyj - Company Announcement

Capital Markets Day: SRV planning to build more shopping centres in Russia and proceeds with major projects in Finland

Espoo, Finland, 2013-12-03 12:07 CET (GLOBE NEWSWIRE) -- SRV GROUP PLC    
STOCK EXCHANGE RELEASE     3.12.2013 

SRV is holding a Capital Markets Day in Espoo today, 3 December 2013, for
analysts and institutional investors. The event will feature management
presentations on areas such as SRV's projects in the Helsinki Metropolitan
Area, shopping centre business in Russia and SRV's financing and capital
structure. 

SRV is planning to continue to benefit from the St. Petersburg and Moscow
shopping centre markets. Plans include the Mytishchi shopping centre in Moscow
and Phase II of the Pearl Plaza shopping centre, which opened in St. Petersburg
in August. Also in August, SRV started work on a major shopping centre project
in the Okhta district of St. Petersburg. The project is expected to be
completed in 2016. 

SRV's goal is to have shopping centre projects at different stages of
development in order to balance revenue and financial performance in Russia.
Due to the shopping centres' good rental level, owning shopping centres for
over three years is also considered possible. Fully leased, the estimated
annual rental income of the Pearl Plaza shopping centre is EUR 18 million.
SRV's invested capital amounts to EUR 22 million. 

The estimated annual rental income of the Okhta Mall shopping centre, which is
under construction, is EUR 33 million. SRV will invest EUR 54 million in the
project during its construction. SRV's share of the EUR 250 million Okhta Mall
project totals 60 per cent. SRV owns 45 per cent of the project directly, with
the remainder of the project being owned by the real-estate investment company
Russia Invest, which consists of Finnish investors. SRV, Ilmarinen and Sponda
each own 27 per cent of Russia Invest, with Etera owning 13 per cent and Onvest
six per cent. 

Of the Russia Invest investment company's EUR 95.5 million investment capacity,
slightly over half is invested in the Okhta Mall shopping centre. The remainder
of the capital will be invested when investment targets have been identified
and investment decisions have been made. Development projects will be financed
in other respects with project-specific bank loans.  SRV's share of Russia
Invest's investment capacity is EUR 26 million. 

Russia Invest is an SRV-developed financial cooperation model, intended to be
used specifically in the company's Russian projects to ensure financial
scalability. SRV's objective is to assume the roles of developer, builder and
investor in its Russia projects, which will increase earnings significantly
compared to the margin obtainable from construction alone. Sharing risk and
revenue with investment partners is SRV's model for controlled growth of
revenue and profit in Russia operations. International Operations, which mainly
consist of Russian operations, accounted for 18 per cent of SRV's revenue in
January-September this year. 

SRV's domestic projects are focused on growth centres, particularly the
Helsinki Metropolitan Area. The company has mega-class projects at Kalasatama
in Helsinki and at Keilaniemi, Niittykumpu and Perkkaa in Espoo. The housing
and commercial premises construction of area development projects is based on
forecasts of population growth in the Helsinki Metropolitan Area. These SRV
projects are centred on metro and railway stations. 

At the end of September, the Domestic Operations order backlog was just under
EUR 730 million, of which housing production accounts for nearly 40 per cent.
The remaining 60 per cent consists of commercial premises production.
Significant contracts under way are the Ring Rail Line railway station at
Helsinki Airport, the HUS logistics centre in Vantaa, the HUS laboratory
building at Meilahti in Helsinki, the Opinmäki Campus in Espoo and the
renovation of the Presidential Palace in Helsinki. 

SRV Group's capital structure and financial position are strong. SRV's equity
ratio at the end of September was around 40 per cent and the gearing ratio was
around 103 per cent. Financial reserves consisting of cash and cash equivalents
and undrawn credit facilities totalled EUR 148 million at the end of review
period. In addition, the financial position of developer-contracting production
is on a strong foundation, because the level of projects' undrawn credit
facilities and trade receivables exceeds the costs of completing the projects. 

The event's presentation material will be published on SRV's website
https://www.srv.fi/en/investors/capital-markets-day-2013. 

SRV Group Plc

Taneli Hassinen
Vice President, Communications
Tel. +358 40 504 3321
taneli.hassinen@srv.fi