2011-08-03 07:30:00 CEST
2011-08-03 07:30:11 CEST
REGULATED INFORMATION
SRV Yhtiöt Oyj - Interim report (Q1 and Q3)
GROWTH IN SRV'S RESIDENTAL PRODUCTION REMAINED STRONG - SRV'S INTERIM REPORT 1 JANUARY - 30 JUNE 2011
Espoo, Finland, 2011-08-03 07:30 CEST (GLOBE NEWSWIRE) -- SRV GROUP PLC
INTERIM REPORT 3 August 2011, 8.30 a.m. EET
Reporting period 1 January-30 June 2011 in brief:
- SRV's revenue was EUR 269.2 million (EUR 211.1 million in January-June 2011),
change +27.5%
- Operating profit was EUR 0.7 million (EUR 3.1 million), change -77.5%
- Profit before taxes was EUR 0.0 million (EUR 0.0 million
- The order backlog at the close of the review period was EUR 673.5 million
(EUR 604.4 million), change +11.4%
- New contracts EUR 310.9 million (EUR 327.3 million), change -5.0%
- The equity ratio was 31.7 per cent (35.1%)
-Earnings per share were EUR -0.01 (EUR 0.01)
SRV adjusts the outlook for the whole year for revenue and development of
operational profitability. Revenue is estimated to be around EUR 650 million
(EUR 484.4 million in January-December 2010). Profitability of both domestic
and international operations is estimated to improve in the second half of the
year compared to the first half of the year. The outlook for the whole year is
maintained and profit before taxes is expected to exceed the previous year's
level.
Second quarter 1 April-30 June 2011 in brief:
- Revenue was EUR 136.6 million (EUR 117.3 million in April-June 2010)
- Operating loss was EUR 0.3 million (profit of EUR 1.5 million)
- Loss before taxes was EUR 1.7 million (EUR 0.1 million)
- Earnings per share were EUR -0.06 (EUR 0.02)
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:
SRV has systematically continued to increase its residential production in
Finland. At the end of June we had more than 2,200 housing units under
construction. Majority of the production is already sold either to
institutional investors or consumers. SRV builds more than 1 400 rental units
in the Helsinki metropolitan area as well as in Kaarina, Pirkanmaa and Joensuu.
Our residential sales to consumers has risen to an all-time high level. The
profitability of developer contracting production is shown in our profit later
due to the recognition principle based upon delivery and therefore the positive
development in our housing sales did not yet realise in the profit for the
second quarter. We estimate that 400 developer contracting housing units will
be completed during the latter part of the year compared with only 41 in the
second quarter.
The market for business premises has continued to be quieter than the housing
market, though weak signs of turn for better can be seen. The growth of the
portion of contracting has decreased our relative profitability due to lower
profit level. Moreover, profitability has been affected by the weakening of the
estimated profits which s mainly due to the increase of construction costs.
Profitability of construction of business premises increased slightly during
the second quarter. However, to raise the profitability of the construction of
business premises to the previous years' level requires increase of the
proportion of development projects and developer contracting projects.
The only significant started 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.
In international operations, the construction Pearl Plaza shopping centre in
St. Petersburg commenced early this year. Our goal is to start up our projects
in Russia which have been stagnant for a long time, and which require a
significant share of SRV's capital.
SRV's group structure was reconfigured at the beginning of this year, when 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 half of the year is not in line with our
targets. The number of backlog orders under construction 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.
We have wilfully increased the volume of our project development even though,
on a short term, it means increased development expenses which are recognised
as costs. We believe in the possibilities arising from SRV's innovative project
development both in Finland and in Russia. In early 2011, we have been able to
make progress on two of our long-term major development projects: the
Kalasatama Centre in Helsinki and Keilaniemi in Espoo. When realised, 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. SRV's order backlog increased by 11.4 per cent.
In Finland, the competition for new orders for business premises is fierce.
SRV's volume of construction of business premises has remained at a good level.
However, there is pressure to maintain profitability, as the order backlog
consists mainly of contracting activity with a lower profit margin. In
addition, construction costs have clearly gone up. 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 increased the production of both rental and owner-occupied
housing. The total amount of SRV's housing production under construction grew
to 2 243 residential units, of which 63 per cent are rental or
right-of-occupancy units. The number of developer contracting housing projects
currently under construction grew to 824 residential units, of which over 50
per cent has been sold. Based on premarketing, the decision on the start-up of
212 additional units has been made. In total, SRV sold 290 residential units to
consumers and investors (in comparison to 197 units in January-June 2010).
Developer contracting housing production is recognised upon delivery thus
affecting more the latter part of this year.
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.
Amongst the key international projects, the implementation of the Pearl Plaza
shopping centre project in St. Petersburg was confirmed in January, when the
investment decision for the site and the EUR 100 million development contract
with SRV were signed.
SRV's own project development operations enhance the company's potential to
increase its operating volume. Projects require long-term development work and
are carried out over the course of several years. SRV's projects are often
so-called landmark projects - innovative new solutions for the needs of
sustainable regional construction. Such projects include, for example, the
Keilaniemi Towers housing project, the development project for the vicinity of
the Niittykumpu metro station in Espoo, and, as the most recent addition, the
Kalasatama development project in Helsinki.
Group key figures IFRS IFRS IFRS IFRS IFRS
(EUR million) 1-6/ 1-6/ change, change 4-6/ 4-6/ 1-12/
2011 2010 MEUR ,% 2011 2010 2010
--------------------------------------------------------------------------------
Revenue 269.2 211.1 58.1 27.5 136.6 117.3 484.2
--------------------------------------------------------------------------------
Operating profit 0.7 3.1 -2.4 -77.5 -0.3 1.5 12.5
Financial income and -0.7 -3.0 2.3 -1.4 -1.6 -4.5
expenses, total
Profit before taxes 0.0 0.0 -0.1 -239.4 -1.7 -0.1 7.9
Order backlog 673.5 604.4 69.1 11.4 594.5
New agreements 310.9 327.3 -16.4 -5.0 90.6 186.7 559.9
Operating profit, % 0.3 1.5 -0.2 1.3 2.6
Net profit, % -0.4 0.0 -1.6 0.6 1.1
Equity ratio, % 31.7 35.1 35.2
Net interest bearing 263.5 217.2 222.8
debt
Gearing, % 162.2 142.7 141.7
Return on investment, % 1.4 2.1 4.1
1)
Return on equity, % 1) -1.3 0.1 3.2
Earnings per share, EUR -0.01 0.01 -0.06 0.02 0.19
Equity per share, EUR 4.51 4.38 4.56
Weighted average number 34.5 33.9 1.8 33.9
of shares outstanding
In calculating the key ratio only the profit for the period has been annualised
The Group revenue increased especially as the result of the favourable
development in the volume of domestic housing construction. The decline in the
operating profit was influenced by the weakened profitability of commercial
construction brought on by a lower order backlog profit margin and higher
construction costs, as well as losses generated by international business
operations. Project development expenses recorded as costs grew by EUR 1.1
million from the reference period.The Group's order backlog grew on account of
the increased order backlog of international and domestic housing construction.
The Group's revenue for the second quarter grew thanks to the favourable
development in the residential construction in Finland. Profitability of the
business operations in Finland declined compared to the first quarter due to
the recognition principle based upon delivery in the housing production.
Profitability of the construction of business premises improved slightly
compared to the first quarter. The level of profit was also affected by the
increase in the project development expenses which were recorded as costs.
Key figures for the Segments
IFRS IFRS IFRS IFRS IFRS
Revenue 1-6/ 1-6/ change, change 4-6/ 4-6/ 1-12/
(EUR million) 2011 2010 MEUR ,% 2011 2010 2010
--------------------------------------------------------------------------------
Domestic 255.1 205.5 49.6 24.1 131.2 112.5 462.3
operations
--------------------------------------------------------------------------------
International 13.7 5.5 8.2 149.0 5.3 4.7 21.7
operations
Other Operations 6.3 5.0 1.3 25.6 3.1 2.5 10.3
Eliminations -5.9 -5.0 -1.0 -2.9 -2.5 -10.2
Group, total 269.2 211.1 58.1 27.5 136.6 117.3 484.2
IFRS IFRS IFRS IFRS IFRS
Operating profit 1-6/ 1-6/ change, change 4-6/ 4-6/ 1-12/
(EUR million) 2011 2010 MEUR ,% 2011 2010 2010
--------------------------------------------------------------------------------
Domestic 7.7 12.1 -4.5 -36.9 3.3 5.4 26.4
operations
--------------------------------------------------------------------------------
International -4.3 -6.1 1.8 -1.9 -2.2 -8.0
operations
Other Operations -2.7 -2.8 0.1 -1.7 -1.6 -5.9
Eliminations 0.0 -0.2 0.2 0.0 -0.1 0.0
Group, total 0.7 3.1 -2.4 -77.5 -0.3 1.5 12.5
Operating profit IFRS IFRS IFRS IFRS IFRS
(%) 1-6/2011 1-6/2010 4-6/2011 4-6/2010 1-12/2010
---------------------------------------------------------------------------
Domestic operations 3.0 5.9 2.5 4.8 5.7
---------------------------------------------------------------------------
International operations -31.4 -111.2 -36.2 -46.9 -37.1
Group, total 0.3 1.5 -0.2 1.3 2.6
Order backlog IFRS IFRS change, change IFRS
(EUR million) 30.6.11 30.6.10 MEUR % 31.12.10
---------------------------------------------------------------------
Domestic operations 564.8 578.6 -13.9 -2.4 574.5
---------------------------------------------------------------------
International operations 108.7 25.7 83.0 322.3 20.0
Group, total 673.5 604.4 69.1 11.4 594.5
- sold order backlog 530 426 104 24.5 442
- unsold order backlog 143 178 -35 -19.7 153
Earnings trends of the Segments
IFRS IFRS IFRS IFRS IFRS
Domestic 1-6/ 1-6/ change, change 4-6/ 4-6/ 1-12/
operations 2011 2010 MEUR ,% 2011 2010 2010
(EUR million)
--------------------------------------------------------------------------------
Revenue 255.1 205.5 49.6 24.1 131.2 112.5 462.3
--------------------------------------------------------------------------------
- business 161.6 160.0 1.6 1.0 86.4 91.1 353.2
construction
- housing 93.5 45.6 48.0 105.2 44.8 21.5 109.4
construction
Operating profit 7.7 12.1 -4.5 -36.9 3.3 5.4 26.4
Operating profit, 3.0 5.9 2.5 4.8 5.7
%
Order backlog 564.8 578.6 -13.9 -2.4 574.5
- business 233.3 388.5 -155.2 -40.0 271.6
construction
- housing 331.5 190.1 141.4 74.4 302.9
construction
Domestic Operations comprises construction operations manged by SRV
Construction Ltd and property development. Domestic operations has been divided
into business premises including retail, office, logistics as well as earth and
rock construction operations and housing construction.
Revenue in Domestic Operations was EUR 255.1 million (EUR 205.5 million) and
its share of total revenue of the Group was 95 per cent (97%). Operating profit
was EUR 7.7 million (EUR 12.1 million) generating an operating profit margin of
3.0 per cent (5.9%). The decrease in operating profit was attributable to the
weakening of profitability level in business premises construction due to
increased share of contract-based order backlog and an increased level of
construction costs. The order backlog was EUR 564.8 million (EUR 578.6
million).
Revenue for the second quarter amounted to EUR 131.2 million (EUR 112.5
million) and operating profit was EUR 3.3 million (EUR 5.4 million). The
decline in the operating profit was attributable to the weakening of
profitability level in business premises construction.
This year's favourable trend continued in the housing sales and 143 housing
units were sold during the second quarter (102 units in January-March 2011).
Only 41 housing units were completed during the second quarter and due to the
recognition principle based upon delivery, the profitability of the business
operations declined compared to the first quarter of the year. By applying the
earlier percentage of completion method the difference in the revenue compared
to the present application grew from EUR 6.7 million in the first quarter to
EUR 23.4 million which will be recognised when the housing units are handed
over.
Business Premises construction
Revenue in Business Premises construction was EUR 161.6 million (EUR 160.0
million). The order backlog was EUR 233.3 million (EUR 388.5 million).
Competition for new contracts remained tight. Profitability of business
premises construction improved slightly during the second quarter compared to
the first quarter.
Helsinki Music Centre, which Rakennuslehti chose as the best construction site
in Finland in 2010, was completed during the review period. The projects
completed during the review period include 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 74.1 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. SRV will
renovate the Vantaa city hall and children's art house Pessi. In addition, SRV
will build a S-market in Juvankartano, Espoo. The project is developed by SRV.
After the review period, in July, SRV and Ilmarinen Mutual Pension Insurance
Company have agreed on the construction of new premises for Finnair in the
Helsinki-Vantaa airport area. The construction of the premises will follow the
principles of sustainable development and they offer advanced working
environment. The total floor area of the new building is around 70,000 square
meters, of which 22,400 square meters is offices.
Housing Construction
Revenue in Housing Construction was EUR 93.5 million (EUR 45.6 million). The
order backlog grew by 74.4 per cent and was EUR 331.5 million (EUR 190.1
million). SRV has increased significantly its housing production and at the
close of the review period SRV had a total of 2,243 residential units under
construction (1,067). 82 per cent of the production under construction was
implemented under building contracts or they were SRV's own production which
had already been sold.
During the review period, housing construction contracts worth EUR 57.7 million
were signed with external clients. A total of 480 apartments will be completed
in these projects. Contracts were concluded with the construction company TA
Asumisoikeus Oy for the construction of four sites and 272 right-of-occupancy
units in Kerava, Espoo's Vanttila and Saunalahti. A contract was concluded with
Alkuasunnot Oy for the construction of 118 rental apartments in Jätkäsaari,
Helsinki. 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. In Joensuu, 17 right-of-occupancy units will be constructed
for Avain Rakennuttajat.
SRV started a total of 327 developer contracting housing projects during the
review period. 60 apartments will be built Helsingin Pelimanni in Kannelmäki,
Helsinki and 30 apartments in Vantaan Kartanonkulma in Vantaa. Eighteen
high-end single-family houses will be built for Espoon Kaisla in Saunalahti,
Espoo.
In the 2012 Housing Fair area in Vuores, Tampere, 41 terraced-house and
multi-storey house apartments will be built in Vuoreksen Matti. In addition, in
Hyhky, Tampere 37 terraced-house apartments will be built in Tampereen Emil. A
total of 46 apartments will be built in two apartment houses in Ylöjärvi
(Kultaniitty and Kultapuisto). In Pirkkala 14 apartments will be built in
terrace house Kultasiipi.
A 29-unit apartment building will be constructed for Lahden Alfred in downtown
Lahti, and 26 apartments g will be built in downtown Kaarina. 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 206 residential units in the
Helsinki Metropolitan Area and 6 units in Kaarina in Southwest Finland.
In total, 290 (197) of the developer contract housing projects' apartments were
sold during the review period. At the end of the period, there were 824 (547)
apartments under construction, with 404 (400) left unsold. There were 53 (105)
completed and unsold apartments, of which 10 were rented out by the end of the
period. In total, 108 (16) developer contract housing projects' apartments were
completed during the period. Completed projects included apartment building
Martti with 67 apartments in Vantaa, 26 terraced-house apartments in Sinisiipi
in Pirkkala and 15 apartments in Marjalan Saunaranta in Joensuu.
Based on the current schedules of completion, SRV estimates 508 developer
contracting housing units to be completed during the entire year of 2011.
Housing production in 1-6/ 1-6/ change, 4-6/ 4-6/ 1-12/
Finland 2011 2010 units 2011 2010 2010
Developer contracting
--------------------------------------------------------------------------------
Start-ups 327 300 27 205 300 543
Sold 290 197 93 143 102 524
Completed 108 16 92 41 0 201
Completed and unsold 53 105 -52 137
Under construction, total 1) 2 243 1 064 1 179 1 629
- negotiation and 1 419 517 902 1 024
construction contracts 1))
- developer contracting 1) 824 547 277 605
- of which sold 1) 420 147 273 321
- of which unsold 1) 404 400 4 284
1)at the end of the period
The structure of order backlog in housing construction showed a positive trend
during the review period. The completed but unsold order backlog declined by
53%. The sold developer contracting order backlog under construction grew to
EUR 94 million. Even though new start-ups were increased, the unbuilt unsold
order backlog decreased improving SRV's risk profile.
Order backlog, housing construction in 30.6.11 30.6.10 change, 30.12.10
Finland (EUR million) MEUR
Negotiation and construction contracts 124 22 102 115
Under construction, sold developer 94 29 65 73
contracting
Under construction, unsold developer 92 94 -2 62
contracting
Completed and unsold developer 21 45 -24 53
contracting
Total 332 190 141 303
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 IFRS IFRS
International 1-6/ 1-6/ change, change 4-6/ 4-6/ 1-12/
Operations 2011 2010 MEUR ,% 2011 2010 2010
(EUR million)
--------------------------------------------------------------------------------
Revenue 13.7 5.5 8.2 149.0 5.3 4.7 21.7
--------------------------------------------------------------------------------
Operating profit -4.3 -6.1 1.8 -1.9 -2.2 -8.0
Operating profit, -31.4 -111.2 -36.2 -46.9 -37.1
%
Order backlog 108.7 25.7 83.0 322.3 20.0
International Operations comprises business activities of the SRV International
subgroup in Russia and the Baltic countries.
Revenue in the International Operations was EUR 13.7 million (EUR 5.5 million)
and its share of total revenue of the Group was 5 per cent (3%). Operating loss
was EUR 4.3 million (a loss of EUR 6.1 million). Increased revenue and improved
profitability were attributable to operations volume. The order backlog was EUR
108.7 million (EUR 25.7million).
Revenue for the second quarter was EUR 5.3 million (EUR 4.7 million) and
operating loss EUR 1.9 million (EUR 2.2 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 started in
early April. The final building permit will be granted during the third
quarter.
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 56.4 million
in the acquisition of land areas and properties. The estimated amount of SRV's
further investment in land acquisition is about EUR 4.5 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 around EUR 200 million worth of project management
contracts.
The offices of the Etmia II office and parking house project in the heart of
Moscow have been fully leased. SRV's role in the project is to act as co-owner
with a 50 per cent stake and was responsible for the construction as 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.
The renovation of the old Aeroport hotel at Sheremetyevo airport in Moscow was
completed. In St. Petersburg, the renovation of 200 rooms in the Pulkovskaya
Hotel continued and the renovation of the Pribaltiskaya Hotel's Aqua Park was
started. All three hotels belong to the Wenaas Group. The projects are a
continuation of cooperation already started in 2007.
In the city of Vyborg, five apartments in the Papula residential area were sold
during the review period. A total of 22 housing units have been sold, while 16
units remained unsold at the end of the period. As a result of positive results
from premarketing, a decision was made to start the second apartment building
with 38 apartments. The construction will commence in late autumn. The project
has all necessary approvals from authorities.
Baltic countries
Business volumes in the Baltic countries were low. In Estonia, 2 (7)
residential units were sold during the period. There were 15 (24) 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 IFRS IFRS
Other 1-6/ 1-6/ change, change, 4-6/ 4-6/ 1-12/
Operations 2011 2010 MEUR % 2011 2010 2010
(EUR
million)
--------------------------------------------------------------------------------
Revenue 6.3 5.0 1.3 25.6 3.1 2.5 10.3
--------------------------------------------------------------------------------
Operating -2.7 -2.8 0.1 -1.7 -1.6 -5.9
profit
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 6.3 million (EUR
5.0 million) and operating loss was EUR 2.7 million (a loss of EUR 2.8
million). The positive trend in revenue was attributable to higher operation
volumes. During the review period, EUR 2.5 million of development expenses of
SRV's projects was recorded as costs (EUR 1.3 million). Revenue for the second
quarter was EUR 3.1 million (EUR 2.5 million) and operating loss EUR 1.7
million (EUR 1.6 million) The operating profit for the second quarter was
affected by the increase of development expenses to EUR 1.6 million (EUR 0.9
million).
Group project development
SRV's proposal for implementing the Kalasatama Centre project in Helsinki moved
forward. The Helsinki City Board elected SRV as the winner of the competitive
bidding for the implementation of the site. 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 implementation contract will be signed in August.
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 plans for the site include some 72 000 m2 for apartments and 9 000 m2 for
commercial premises.
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.
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 -43.5 million negative (EUR -27.8 million in
January-June 2010). The weakening of the cash flow during the review period was
attributed to the increase of inventories. The Group's inventories were EUR
360.9 million (EUR 302.1 million), the share of land areas and plot-owning
companies being EUR 196.3 million (EUR 174.0 million). The Group's invested
capital amounted to EUR 446.5 million (EUR 384.9 million).
At the end of the review period, the Group's financing reserves totalled EUR
138 million, of which the Group's cash assets amounted to EUR 20.5 million, the
amount of open-ended account limits and committed undrawn financing reserves
and commitments amounted to EUR 97.3 million and withdrawable housing company
credits related to RS projects amounting to EUR 20.6 million. The Group's net
interest-bearing liabilities were EUR 263.5 million (EUR 263.5 million) on 30
June 2011. Net financing expenses totalled EUR 0.7 million. The financing
expenses were affected by the gains from interest rate swaps, exchange rate
gains and financial incomes from associated companies.
Investments in SRV's developer contracting RS housing projects in Finland
including completed, unsold projects, total around EUR 95.9 million. SRV
estimates that the completion of these projects requires another EUR 81.4
million. Undrawn housing corporate loans related to RS projects totalled EUR
91.3 million. Investments in the business premises projects on a developer
contracting basis total EUR 32.7 million. Investments in the completed
international projects total EUR 41.3 million, of which unsold residential
projects in Estonia amount to EUR 1.0 million, and EUR 2.1 million in Vyborg.
EUR 38.2 million is invested in the Etmia office project.
Equity ratio was 31.7 per cent (35.1%). The change in the equity ratio and net
liabilities was affected by the increase in inventories and the EUR 2.5 million
derivative agreement signed by SRV with Nordea Bank Ab for 552,833 SRV Group
Plc's shares which are considered equal to treasury shares held by the company.
The Group's shareholders' equity totalled EUR 162.5 million (EUR 152.2 million
on 30 June 2010). The return on investment was 1.4 per cent (2.1%) and the
return on equity was 1.3 per cent negative (0.1%).
Investments
The Group's investments totalled EUR 2.8 million (EUR 1.0 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
30.6.2011 construction construction Operations
--------------------------------------------------------------------------------
Unbuilt land areas and land acquisition commitments
--------------------------------------------------------------------------------
-
Building rights*, 226 000 292 000 856 000 1 374 000
m2
Land development
agreements
Building rights*, 662 000 300 000 152 000 1 114 000
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 segments are Domestic Operations, International Operations, and
Other Operations. Domestic Operations comprises construction management
operations of SRV Construction Ltd and property development. Domestic
operations has been divided into business premises including retail, office,
logistics as well as earth and rock construction operations and 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. On 31 May 2011, SRV acquired all shares
of Maanrakennus Oy Laatutyö. The annual revenue of Laatutyö is 5 to 7 million
Euros. The acquisition is part of SRV's strategy to increase infrastructure
construction. In July, SRV acquired 100% ownership of its Estonian subsidiary
SRV Kinnisvara AS.
Changes in the Group management
Taneli Hassinen started as 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 828 (780) employees, of whom 601 (549) 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 966 (835)
employees, of whom 46 (47) were employed by the parent company. 152 (135)
employees work in subsidiaries abroad. At the end of the review period, SRV had
a total of 118 (86) trainees working in summer jobs and in work training as
well as students working on their thesis or diploma in the Group's operations
in Finland.
Personnel by business 30.6.2011 30.6.2010 Share of Group personnel,
area 30.6.2011, %
--------------------------------------------------------------------------------
Domestic operations 712 598 73.7
--------------------------------------------------------------------------------
International 164 152 17.0
operations
Other Operations 90 85 9.3
Group, total 966 835 100.0
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 totalling 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 unstable. The European
Central Bank has increased the interest rate to 1.5 per cent, but the pressure
still remains for further increases. The expected growth of the Finnish economy
is 4 per cent in 2011.
The start-ups of building construction are predicted to increase around 4% this
year. The total number of building permits went down in early 2011.
Construction cost index is in clear upswing. Employment in construction will
somewhat improve this year.
Strong consumer confidence and interest rates that are low for now have kept
demand at a decent level in the housing market. Start-ups this year equal the
long term annual housing needs, i.e. around 34,000 housing units. On a longer
perspective, the need for residential construction is sustained for instance by
migration to growth centres and smaller households. However, the growth in
demand is estimated to slow down. Moreover, prevailing economic situation and
employment rate as well as higher interest rates create uncertainties in the
housing sales.
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.
Commercial and office real-estate markets remained low and the vacancy rates of
office spaces are particularly high. This year slightly more commercial and
office buildings will be started than last year, but the number is estimated to
go down again next year.
Call for renovation continues to be good this year. The growth of the building
stock, its ageing and the modernization of technical standards will maintain
the volume of renovation works in years to come. The weakening of the outlook
for civil engineering construction is will even out next year when the ongoing
infrastructure projects start to affect.
The economy in the Baltic countries is estimated to strengthen this year. The
accelerated inflation may jeopardise the development of domestic demand in
Estonia and Lithuania, in particular. Activity in the construction sector and
real-estate market remains at a low level.
The Russian economy has turned into a slow growth. GNP is estimated to grow
around 5.5% in 2011 as private consumption accelerates the recovery. The
changes in oil price estimates is predicted to increase the governments income
by nearly 20% more than budgeted. Inflation has gobbled up the growth of real
wages. Investment activity is expected to revive in the real-estate market in
2011.
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. This may change,
among other things, the development of SRV's order backlog volume and
operational profitability as well as prolong the time that SRV's equity is tied
to projects. 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 unstable and the global governmental financal crisis creates
uncertainty to economic development. Demand for property investments has
remained weak. Interest rates are still 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. 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 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. Rise in interest rates create a significant risk
relating to housing demand.
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. Availability of property financing affects the progress
and start-up decisions of development projects.
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 at 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 5,900 shareholders on 30 June 2011.
The company received the following flagging notification during the review
period.
Nordea 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.
According to Nordea Bank AB's (publ) notification the portion of ownership of
shares and voting rights of Nordea Group in SRV Group Plc has fallen below 1/20
as a result of the transactions on 11 April 2011. Nordea Pankki Suomi Oyj sold
all 1,909,483 SRV Group Plc's shares it had owned to Nordea Bank AB (publ) on
11 April 2011. On 11 April 2011, Nordea Bank AB (publ) sold 1,356,650 SRV Group
Plc's shares as a part of the total return swap described in the flagging
notification of 5 January 2011 to SRV Group Plc.
SRV Group Plc's ownership of the company's own shares exceeded momentarily 1/20
on 11 April 2011. On 11 April 2011, SRV realized part of a derivatives contract
concluded between the company and Nordea Bank AB (publ.) on 5 January 2010 in
respect of 1,356,650 company shares for EUR 4.45 per share. In deviation from
shareholders' pre-emptive rights, SRV implemented a directed share issue in
which 1,500,000 million shares were offered for subscription at a price of EUR
6.60 per share. The share issue was subscribed immediately. The arrangement
increased SRV's equity capital by EUR 9.9 million. After the share issue, SRV's
holding of its own shares fell below 1/20.
The share closing price at OMX Helsinki at the end of the review period was EUR
6.00 (EUR 6.63 on 31 December 2010). The highest share price in the review
period was EUR 7.43 and the lowest was EUR 5.60. The change in the all-share
index of the Helsinki Stock Exchange (OMX Helsinki) during the same period was
-6.9 per cent and the OMX Industrial and Services index -12.3 per cent.
At the end of the review period, the company had a market capitalisation of EUR
213.1 million, excluding the Group's own shares. About 7.6 million shares were
traded during the review period and the trade volume was EUR 48.1 million.
At the end of the review period, SRV and Nordea had derivative contract (total
return swap) for 552,833 SRV's shares on a price of EUR 4.45 per share
(totaling EUR 2.5 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. The market capitalisation of the
shares was EUR 3.3 million at the end of the review period.
At the end of the review period, SRV Group Plc held 1,244,928 its own shares,
taking the derivative contract into consideration (3.4 per cent of the total
number of the company's shares and voting rights). On 2 August 2011 the Group
held 1,244,928 shares (3.4 per cent of the total number of the shares and
voting rights).
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
In July, SRV and Ilmarinen Mutual Pension Insurance Company signed a contract
concerning the construction of new premises for Finnair in the Helsinki-Vantaa
airport area. The total floor area of the new building is around 70,000 square
meters, of which 22,400 square meters is offices.
Previous outlook for 2011
17 February 2011
Revenue and profit before taxes in 2011 are expected to exceed the previous
year's level.
Outlook for 2011
SRV adjusts its outlook for the whole year 2011 regarding revenue and
operational profitability. The allocation and development of revenue and
profitability is due to the fact that the completion of developer contracting
residential production and building up of the international order backlog
accumulate towards the latter part of the year.
Revenue is estimated to total EUR 650 million (EUR 484.4 in January-December
2010) and the profitability of both domestic and international operations is
estimated to improve during the second half of the year compared to the first
half of 2011. The outlook for the whole year is maintained and profit before
taxes is expected to exceed the previous year's level.
Espoo 2 August 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 IFRS IFRS
1-6/ 1-6/ 4-6/ 4-6/ 1-12/
2011 2010 2011 2010 2010
--------------------------------------------------------------------------------
Revenue EUR 269.2 211.1 136.6 117.3 484.2
millio
n
Operating profit EUR 0.7 3.1 -0.3 1.5 12.5
millio
n
Operating profit, % of revenue % 0.3 1.5 -0.2 1.3 2.6
Profit before taxes EUR 0.0 0.0 -1.7 -0.1 7.9
millio
n
Profit before taxes, % of % 0.0 0.0 -1.3 -0.1 1.6
revenue
Net profit attributable to EUR -0.5 0.4 -2.1 0.8 6.4
equity holders of the parent millio
company n
Return on equity 1) % -1.3 0.1 3.2
Return on investment 1) % 1.4 2.1 4.1
Invested capital EUR 446.5 384.9 387.1
millio
n
Equity ratio % 31.7 35.1 35.2
Net interest-bearing debt EUR 263.5 217.2 222.8
millio
n
Gearing ratio % 162.2 142.7 141.7
Order backlog EUR 673.5 604.4 594.5
millio
n
New agreements 310.9 327.3 559.9
Personnel on average 828 780 794
Property, plant and equipment EUR 2.8 1.0 0.4 0.5 2.3
investments millio
n
Property, plant and equipment % 1.0 0.5 -1.1 0.4 0.5
investments, % of revenue
Earnings per share, share issue EUR -0.01 0.01 -0.06 0.02 0.19
adjusted
Equity per share, share issue EUR 4.51 4.38 - - 4.56
adjusted
Dividend per share, share issue EUR - - - - 0.12
adjusted
Dividend payout ratio % - - - - 63.2
Dividend yield % - - - - 1.8
Price per earnings ratio - - - - 34.9
Share price development - -
Share price at the end of the EUR 6.00 6.16 - - 6.63
period
Average share price EUR 6.76 6.40 - - 6.42
Lowest share price EUR 5.60 5.50 - - 5.50
Highest share price EUR 7.43 7.14 - - 7.14
Market capitalisation at the EUR 213.1 209.0 - - 224.8
end of the period millio
n
Trading volume 1,000 7 563 9 263 - - 12 114
Trading volume % 21.9 27.3 - - 35.7
Weighted average number of 1,000 34 530 33 930 - - 33 923
shares outstanding
Number of shares outstanding at 1,000 35 524 33 926 - - 33 901
the end of the period
In calculating the key ratio only the profit for the period has been annualised
Calculation of key figures:
Net 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. - 30.6.2011: 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. - 30.6.2011
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 and
earnings, 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 IFRS IFRS
statement 1-6/ 1-6/ change change, 4-6/ 4-6/ 1-12/
(EUR million) 2011 2010 , MEUR % 2011 2010 2010
--------------------------------------------------------------------------------
Revenue 269.2 211.1 58.1 27.5 136.6 117.3 484.2
--------------------------------------------------------------------------------
Other operating income 2.2 1.5 0.7 46.5 1.1 0.7 3.2
Change in inventories 25.2 18.8 6.5 34.4 25.7 6.8 28.2
of finished goods and
work in progress
Use of materials and -258.6 -195.6 -63.0 32.2 -143.6 -105.9 -435.8
services
Employee benefit -27.9 -24.8 -3.0 12.3 -14.9 -13.1 -49.6
expenses
Share of results of -0.2 0.0 -0.2 -0.1 0.0 -0.4
associated companies
Depreciation and -1.6 -1.7 0.0 -2.3 -0.8 -0.9 -3.5
impairments
Other operating -7.7 -6.2 -1.5 24.3 -4.4 -3.4 -13.8
expenses
Operating profit 0.7 3.1 -2.4 -77.5 -0.3 1.5 12.5
Financial income 2.4 0.8 1.6 194.9 1.0 0.2 3.1
Financial expenses -3.2 -3.8 0.7 -18.1 -2.4 -1.8 -7.6
Financial income and -0.7 -3.0 2.3 -75.6 -1.4 -1.6 -4.5
expenses, total
Profit before taxes 0.0 0.0 -0.1 -239.4 -1.7 -0.1 7.9
Income taxes -1.0 0.0 -1.0 -4434.0 -0.4 0.8 -2.8
Net profit for the -1.0 0.1 -1.1 -1856.2 -2.1 0.7 5.2
period
Attributable to
Equity holders of the -0.5 0.4 -2.1 0.8 6.4
parent company
Minority interest -0.5 -0.3 -0.1 -0.1 -1.2
Earnings per share -0.01 0.01 -0.06 0.02 0.19
calculated on the
profit attributable to
equity holders of the
parent company
(undiluted and
diluted) IFRS IFRS IFRS IFRS IFRS
Statement of comprehensive income 1-6/ 1-6/ 4-6/ 4-6/ 1-12/
(EUR million) 2011 2010 2011 2010 2010
--------------------------------------------------------------------------------
Net profit for the period -1.0 0.1 -2.1 0.7 5.2
--------------------------------------------------------------------------------
Items recognised directly in
equity:
Exchange differences on translating 0.0 0.0 0.0 0.0 0.0
foreign operations
Available for sale financial assets 0.0 0.0 0.0 0.0 0.1
Net gain (loss) on cash flow hedges 0.0 0.0 0.0 0.0 0.0
Deferred tax 0.0 0.0 0.0 0.0 0.0
Income (loss) recognised directly 0.0 0.0 0.0 0.0 0.0
in equity net of tax
Total comprehensive income for the -1.0 0.1 -2.1 0.7 5.2
period
Profit for the period attributable
to:
Equity holders of the parent -0.5 0.4 -2.1 0.8 6.4
company
Minority interest -0.5 -0.3 -0.1 -0.1 -1.2
Consolidated balance sheet IFRS IFRS change, IFRS
(EUR million) 30.6.11 30.6.10 % 31.12.10
------------------------------------------------------------------
ASSETS
------------------------------------------------------------------
Non-current assets
Property, plant and equipment 15.4 15.1 2.3 14.0
Goodwill 1.7 1.7 0.0 1.7
Other intangible assets 0.4 0.4 -10.2 0.4
Other financial assets 6.0 4.9 21.7 5.2
Receivables 21.1 17.0 23.9 22.8
Deferred tax assets 5.9 4.2 38.8 5.1
Non-current assets, total 50.5 43.4 16.3 49.2
Current assets
Inventories 360.9 302.1 19.5 324.1
Trade and other receivables 117.8 92.0 28.1 96.0
Current tax receivables 2.8 1.4 96.1 1.5
Cash and cash equivalents 20.5 15.4 33.0 7.1
Current assets, total 502.0 410.9 22.2 428.8
ASSETS, TOTAL 552.4 454.3 21.6 478.0
Consolidated balance sheet IFRS IFRS change IFRS
,
(EUR million) 30.6.11 30.6.10 % 31.12.10
--------------------------------------------------------------------------------
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 92.0 87.3 5.3 87.8
Translation differences -0.1 -0.1 26.2 -0.1
Fair value reserve 0.0 -0.1 -100.0 0.0
Retained earnings 65.3 58.5 11.6 63.8
Equity attributable to equity holders of the 160.3 148.7 7.7 154.5
parent company, total
Minority interest 2.2 3.5 -37.2 2.7
Equity, total 162.5 152.2 6.7 157.2
Non-current liabilities
Deferred tax liabilities 1.7 1.3 35.5 0.7
Provisions 4.2 4.6 -6.9 4.2
Interest-bearing liabilities 88.0 70.1 25.6 78.8
Other liabilities 0.9 0.7 27.4 0.4
Non-current liabilities, total 94.9 76.6 23.8 84.1
Current liabilities
Trade and other payables 94.3 57.3 64.7 78.6
Current tax payables 1.7 1.7 -0.6 3.4
Provisions 3.0 3.9 -21.3 3.5
Interest-bearing liabilities 196.0 162.6 20.6 151.1
Current liabilities, total 295.1 225.4 30.9 236.7
Liabilities, total 390.0 302.0 29.1 320.8
EQUITY AND LIABILITIES 552.4 454.3 21.6 478.0
Consolidated cash flow statement IFRS IFRS IFRS
(EUR million) 1-6/2011 1-6/2010 1-12/201 0
--------------------------------------------------------------------------------
Cash flows from operating activities
--------------------------------------------------------------------------------
Net profit for the period -1.0 0.1 5.2
Adjustments:
Depreciation and impairments 1.6 1.7 3.5
Non-cash transactions 0.2 9.2 0.7
Financial income and expenses 0.7 3.0 4.5
Capital gains on sales of tangible and intangible 0.0 0.0 0.0
assets
Income taxes 1.0 0.0 2.8
Adjustments, total 3.5 13.9 11.5
Changes in working capital:
Change in loan receivables 1.7 2.5 -2.7
Change in trade and other receivables -20.8 -6.1 -9.7
Change in inventories -36.4 -21.6 -43.8
Change in trade and other payables 13.1 -8.9 21.7
Changes in working capital, total -42.3 -34.1 -34.4
Interest paid -4.5 -2.8 -7.7
Interest received 2.6 0.5 1.7
Dividends received 0.0 0.0 0.1
Income taxes paid -2.1 -1.6 -4.2
-3.9 -3.9
Net cash flow from operating activities -43.8 -24.1 -27.8
Cash flow from investing activities
Acquisition of subsidiaries, net of cash -0.8 -0.1 -0.3
Property, plant and equipment -1.2 -0.9 -1.5
Intangible assets 0.0 0.0 -0.1
Other financial assets -0.8 0.0 -0.4
Sale of property, plant and equipment and 0.0 0.1 0.2
intangible assets
Sale of financial assets 0.0 0.0 0.0
Net cash used in investing activities -2.8 -0.8 -2.2
Cash flows from financing activities
Proceeds from loans 3.0 0.0 6.0
Repayments of loans 0.0 -1.6 -6.1
Change in loan receivables 0.0 0.0 0.0
Change in housing corporation loans -4.7 7.1 -2.2
Change in credit limits 55.6 33.7 38.2
Purchase of treasury shares 9.9 0.0 0.0
Dividends paid -4.1 -4.1 -4.1
Net cash from financing activities 59.9 35.1 31.9
Net change in cash and cash equivalents 13.4 10.2 1.9
Cash and cash equivalents at the beginning of 7.1 5.2 5.2
period
Cash and cash equivalents at the end of period 20.5 15.4 7.1
Statement of changes in Group equity 1.1. - 30.6.2011
Equity attributable to
the equity holders of the parent company
-------------------------------------------------------------------------
IFRS Share Invested Trans-l Fair Retai- Total Minori Total
(EUR million) capit free ation value ned ty equit
al equity differ reser earni inter y
fund -ences ve ngs est
--------------------------------------------------------------------------------
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 -0.5 -0.5
and expenses
for the
financial
year
--------------------------------------------------------------------------------
Dividends paid -4.1 -4.1
--------------------------------------------------------------------------------
Share based 0.3 0.3 0.6
incentive
plan
--------------------------------------------------------------------------------
Purchase of 0.0 0.0
treasury
shares
--------------------------------------------------------------------------------
Sale of 4.0 5.9 9.9
treasury
shares
--------------------------------------------------------------------------------
Other changes -0.1 -0.1
--------------------------------------------------------------------------------
Equity on 3.1 92.0 -0.1 0.0 65.3 160.2 2.2 162.4
30.6.2011
--------------------------------------------------------------------------------
Statement of changes in Group equity 1.1. - 30.6.2010
Equity attributable to
the equity holders of the parent company
-------------------------------------------------------------------------
IFRS Share Invested Trans-l Fair Retai- Total Minori Total
(EUR million) capit free ation value ned ty equit
al equity differ reser earni inter y
fund -ences ve ngs est
--------------------------------------------------------------------------------
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 0.4 0.4
and expenses
for the
financial
year
--------------------------------------------------------------------------------
Dividends paid -4.1 -4.1
--------------------------------------------------------------------------------
Share based 1.1 1.1
incentive
plan
--------------------------------------------------------------------------------
Purchase of -8.5 -8.5
treasury
shares
--------------------------------------------------------------------------------
Other changes -0.3 -0.3
--------------------------------------------------------------------------------
Equity on 3.1 87.3 -0.1 -0.1 58.5 148.7 3.5 152.2
30.6.2010
--------------------------------------------------------------------------------
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) capit free ation value ned ty equit
al equity differ reser earni inter y
fund -ences ve ngs est
--------------------------------------------------------------------------------
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 -0.3 0.2
--------------------------------------------------------------------------------
Equity on 3.1 87.8 -0.1 0.0 63.8 154.5 2.7 157.2
31.12.2010
--------------------------------------------------------------------------------
Commitments and contingent liabilities IFRS IFRS change IFRS
,
EUR million 30.6.11 30.6.10 % 31.12.10
--------------------------------------------------------------------------------
Collateral given for own liabilities
--------------------------------------------------------------------------------
Real estate mortgages given 219.6 125.4 75.1 129.0
Pledges given 0.0 0.0 0.0
Other commitments
Guarantees given for liabilities on 0.0 0.0 0.0
uncompleted projects
Investment commitments given 21.3 22.2 -4.2 21.8
Plots purchase commitments 31.2 24.0 30.2 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 6/2011 6/2010 12/2010
--------------------------------------------------------------------------------
(EUR million) Fair Values Fair Values Fair Values
Positiv Negativ Positiv Positi Negativ
e e e ve e
Hedge accounting not applied
Foreign exchange forward 0.0 0.0 0.0 0.0 0.0 0.0
contracts
Interest rate swaps 0.0 0.6 0.0 1.9 0.0 1.3
Nominal values of derivative IFRS IFRS IFRS
instruments
--------- -------- --------
6/2011 6/2010 12/2010
--------- -------- --------
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 IFRS
(EUR million) 4-6/11 1-3/11 10-12/1 7-9/10 4-6/10 1-3/10
0
--------------------------------------------------------------------------------
Revenue 269.2 132.6 157.9 115.2 117.3 93.8
--------------------------------------------------------------------------------
Operating profit 0.7 1.0 5.9 3.5 1.5 1.6
Financial income and expenses, -0.7 0.7 -1.8 0.3 -1.6 -1.4
total
Profit before taxes 0.0 1.7 4.1 3.8 -0.1 0.2
Order backlog 1) 673.5 702.2 594.5 604.6 604.4 530.0
New agreements 310.9 220.2 120.1 112.6 186.7 140.6
Earnings per share, eur -0.01 0.05 0.10 0.08 0.02 -0.01
Equity per share, eur 1) 4.51 4.49 4.56 4.47 4.38 4.36
Share price, eur 1) 6.00 6.75 6.63 6.14 6.16 6.41
Equity ratio, % 1) 31.7 33.2 35.2 35.1 35.1 37.0
Net interest bearing debt 1) 263.5 246.4 222.8 229.7 217.2 199.8
Gearing, % 1) 162.2 159.1 141.7 147.9 142.7 132.3
Revenue IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 4-6/11 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------
Domestic operations 131.2 123.9 147.3 109.5 112.5 93.0
--------------------------------------------------------------------------
- business construction 86.4 75.3 98.9 94.2 91.1 68.9
- housing construction 44.8 48.8 48.5 15.3 21.5 24.1
International operations 5.3 8.4 10.5 5.7 4.7 0.7
Other Operations 3.1 3.3 2.8 2.5 2.5 2.5
Eliminations -2.9 -3.0 -2.7 -2.5 -2.5 -2.5
Group, total 136.6 132.6 157.9 115.2 117.3 93.8
Operating profit IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 4-6/11 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------
Domestic operations 3.3 4.4 8.4 5.8 5.4 6.7
--------------------------------------------------------------------------
International operations -1.9 -2.4 -0.7 -1.2 -2.2 -3.9
Other Operations -1.7 -1.0 -2.0 -1.1 -1.6 -1.2
Eliminations 0.0 0.0 0.2 0.0 -0.1 -0.1
Group, total -0.3 1.0 5.9 3.5 1.5 1.6
Operating profit IFRS IFRS IFRS IFRS IFRS IFRS
(%) 4-6/11 1-3/11 10-12/10 7-9/10 4-6/10 1-3/10
--------------------------------------------------------------------------
Domestic operations 2.5 3.5 5.7 5.3 4.8 7.2
--------------------------------------------------------------------------
International operations -36.2 -28.4 -7.1 -21.0 -46.9 -517.7
Group, total -0.2 0.8 3.7 3.0 1.3 1.7
Order backlog IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 30.6.11 31.3.11 31.12.10 30.9.10 30.6.10 31.3.10
-------------------------------------------------------------------------------
Domestic operations 564.8 589.8 574.5 581.2 578.6 506.1
-------------------------------------------------------------------------------
- business construction 233.3 277.7 271.6 363.9 388.5 365.9
- housing construction 331.5 312.0 302.9 217.2 190.1 140.2
International operations 108.7 112.4 20.0 23.4 25.7 24.0
Group, total 673.5 702.2 594.5 604.6 604.4 530.0
- sold order backlog 530 569 442 443 426 389
- unsold order backlog 143 133 153 162 178 141
Order backlog, housing construction in Finland
(EUR million) 30.6.11 31.3.11 31.12.10 30.9.10 30.6.10 31.3.10
--------------------------------------------------------------------------------
Negotiation and 124 131 115 32 22 26
construction contracts
under construction
--------------------------------------------------------------------------------
Developer contracting 94 78 73 61 29 11
under construction, sold
Developer contracting 92 71 62 85 94 51
under construction,
unsold
Developer contracting 21 32 53 39 45 51
completed and unsold
Housing construction, 332 312 303 217 190 140
total
Invested capital IFRS IFRS IFRS IFRS IFRS IFRS
(EUR million) 30.6.11 31.3.11 31.12.10 30.9.10 30.6.10 31.3.10
-------------------------------------------------------------------------------
Domestic operations 248.0 215.6 179.7 206.9 203.5 177.8
-------------------------------------------------------------------------------
International operations 194.0 182.7 185.4 175.3 177.2 173.6
Other and eliminations 4.4 12.3 22.0 8.2 4.2 6.0
Group, total 446.5 410.6 387.1 390.3 384.9 357.5
Residential production
in Finland (units) 4-6/11 1-3/11 10-12/ 7-9/10 4-6/10 1-3/10
10
--------------------------------------------------------------------------------
Developer contracting
--------------------------------------------------------------------------------
Start-ups 205 122 133 110 300 0
Sold 143 147 163 164 102 95
Completed 1) 41 67 171 14 0 16
Completed and unsold 1) 53 86 137 90 105 138
Under construction 1) 2 243 1 956 1 629 1 183 1 064 996
--------------------------------------------------------------------------------
- negotiation and construction 1 419 1 296 1 024 540 517 749
contracts 1)
--------------------------------------------------------------------------------
- developer contracting 1) 824 660 605 643 547 247
- of which sold 1) 420 350 321 282 147 78
- of which unsold 1) 404 310 284 361 400 169
1) at the end of the period
3. Segment information
Assets IFRS IFRS change, change, IFRS
(EUR million) 30.6.11 30.6.10 MEUR % 31.12.10
----------------------------------------------------------------------
Domestic operations 338.8 261.8 77.0 29.4 273.6
----------------------------------------------------------------------
International operations 201.6 180.4 21.2 11.8 189.7
Other Operations 315.1 225.1 90.0 40.0 230.0
Eliminations -303.1 -213.0 -89.4 -215.4
Group, total 552.4 454.3 98.9 21.8 478.0
Liabilities IFRS IFRS change, change, IFRS
(EUR million) 30.6.11 30.6.10 MEUR % 31.12.10
----------------------------------------------------------------------
Domestic operations 290.3 216.9 74.1 34.2 217.2
----------------------------------------------------------------------
International operations 214.0 187.1 26.9 14.4 196.3
Other Operations 170.6 115.5 55.1 47.7 109.1
Eliminations -284.9 -217.5 -67.4 -202.0
Group, total 390.0 302.0 88.6 29.4 320.8
Invested capital IFRS IFRS change, change, IFRS
(EUR million) 30.6.11 30.6.10 MEUR % 31.12.10
----------------------------------------------------------------------
Domestic operations 248.0 203.5 44.5 21.9 179.7
----------------------------------------------------------------------
International operations 194.0 177.2 16.9 9.5 185.4
Other and eliminations 4.4 4.2 0.2 4.8 22.0
Group, total 446.5 384.9 61.6 16.0 387.1
Return on investment, IFRS IFRS IFRS
% 1-6/11 1-6/10 1-12/10
----------------------------------------------------
Domestic operations 1) 7.9 13.6 15.3
----------------------------------------------------
International operations 1) -3.1 -6.6 -3.2
Group, total 1) 1.4 2.1 4.1
Inventories IFRS IFRS change IFRS
,
(MEUR) 30.6.11 30.6.10 MEUR 31.12.10
--------------------------------------------------------------------------------
Land areas and plot-owning companies 196.3 174.0 22.3 181.3
--------------------------------------------------------------------------------
Domestic operations 102.5 89.4 13.2 90.7
International operations 93.5 84.4 9.1 90.3
Work in progress 97.7 21.7 76.1 46.8
Domestic operations 85.8 34.8 50.9 46.0
International operations 12.0 -13.2 25.2 0.9
Shares in completed housing corporations and 47.2 87.4 -40.2 75.2
real estate companies
Domestic operations 43.3 65.2 -21.9 68.3
International operations 3.9 22.2 -18.2 6.9
Other inventories 19.7 19.1 0.7 20.8
Domestic operations 11.4 10.1 1.2 11.3
International operations 8.3 9.9 -1.6 10.6
Inventories, total 360.9 302.1 58.8 324.1
Domestic operations 243.0 199.6 43.4 216.3
International operations 117.7 103.3 14.4 108.7
1) In calculating the key ratio only the profit for the period has been
annualised
Business combinations and disposals (EUR million) Fair value recongnised on
acquisition
Consideration
Cash 1.7
Conditional acquisition price 0.5
Total consideration transferred 2.2
Acquisition related costs (recognised as expenses) 0.0
Recognised amounts of identifiable assets acquired
and liabilities assumed
Cash and cash equivalentst 0.9
Property, plant and equipment 3.1
Intangible rights 0.0
Non-interest bearing debt 1.8
Total identifiable net assets 2.2
Goodwill -
Total 2.2
4. Events after the end of the review period
In July, SRV and Ilmarinen Mutual Pension Insurance Company signed a contract
concerning the construction of new premises for Finnair in the Helsinki-Vantaa
airport area. The total floor area of the new building is around 70,000 square
meters, of which 22,400 square meters is offices.
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