SRV's half-year financial report January-
January-
- Revenue amounted to
EUR 402.1 million (405.1 1-6/2021). - Operative operating profit amounted to
EUR 14.7 (10.5) million. - Operating profit was
EUR -75.6 (11.4) million. The write-downs of assets inRussia and the Fennovoima holding, the dissolution of profit margin eliminations and the weakening of the rouble had a total impact ofEUR -90.3 million . - The result before taxes was
EUR -74.8 (3.6) million. Write-downs and the strengthening of the rouble had an impact ofEUR -126.6 million and the financial arrangements an impact ofEUR 38.6 million . - Cash flow from operating and investment activities totalled
EUR -17.2 (3.9) million. -
The company carried out the comprehensive restructuring of financing as planned during the review period due to the impairments of assets in
Russia and the holding in Fennovoima. The restructuring sought to counteract the effects of these impairments by substantially strengthening equity and reducing net interest-bearing debt. As a result of the comprehensive restructuring, the equity ratio was strengthened to 33.3 (26.1) per cent and gearing was reduced to 64.2 (151.9) per cent. Excluding the impact of IFRS 16, the equity ratio was 43.9 (32.5) per cent and gearing was -3.1 (80.3) per cent. The equity ratio in accordance with the loan covenant calculation was 45.9 per cent. -
At period-end, the order backlog stood at
EUR 745.9 (1,047.5) million. New agreements valued atEUR 202.4 (261.3) million were signed in January-June. The sold share of the order backlog was 91.1 (90.0) per cent. - Earnings per share were
EUR -8.66 (0.28). The key figure has been calculated by considering the share issues during the reporting period, the effect of the price of the shares issued and the 40:1 reverse split conducted in July.
April-
- Revenue was
EUR 211.4 million (218.0 4−6/2021). - Operative operating profit amounted to
EUR 9.8 (5.7) million. - Operating profit was
EUR 10.1 (6.3) million. - Cash flow from operating and investment activities totalled
EUR 8.6 (27.2) million. -
New agreements valued at
EUR 72.3 (176.0) million were entered into the order backlog.
Updated outlook for 2022:
- Consolidated revenue for 2022 is expected to amount to
EUR 800-860 million (earlier outlook:EUR 800-950 million ) (revenue in 2021:EUR 932.6 million ). - Operative operating profit is expected to improve on 2021 and to be
EUR 15-25 million (earlier outlook: Operative operating profit is expected to improve on 2021) (operative operating profit in 2021:EUR 5.3 million ).
Events after the end of the review period:
- On
4 July 2022 , SRV executed a reverse share split, including a directed share issue without consideration, redemption of shares and cancellation of shares. After these measures, the new number of shares in the company is 16,982,343. The new number of shares was registered with theTrade Register maintained by the Finnish Patent and Registration Office on4 July 2022 , and trading with the merged shares commenced on Tuesday,5 July 2022 under the new ISIN code FI4000523675. SRV's trading code SRV1V remained the same. The reverse share split and related redemption of shares were executed such that each forty (40) shares of SRV were merged into one (1) share. The purpose of merging the shares was to facilitate trade in the company's shares by increasing the value of an individual share and to contribute to the shares' efficient price formation. -
In connection with the reverse share split on
4 July 2022 , the maximum number of shares that can be subscribed for with special rights in accordance with the terms and conditions of the convertible hybrid bonds ISIN FI4000198122 (with an outstanding principal ofEUR 21,061,512 ) and ISIN FI4000315395 (with an outstanding principal ofEUR 36,047,145 ) was amended such that the maximum number of the shares that can be subscribed is 14,277,165. After the reverse share split, the subscription price of the shares that can be subscribed for with the convertible bonds isEUR 4.00 per share.
CEO's review
"I'm very pleased that we successfully completed our extensive financing arrangement as planned during the second quarter. The overall arrangement fulfilled our objectives and restored our equity ratio to the level it had stood at before
Our balance sheet is stronger thanks to the overall arrangement, enabling us to execute our strategy in full. SRV's future will be based on good and revitalised construction operations in
Our performance in operational activities was in line with plans, and our operating result for the review period improved. At the same time, we can observe that the revenue recognised for the quarter was more profitable than had been forecast for the rest of the year. Earnings performance in a challenging market has been supported by cost discipline and proactive procurements. With these measures, we have kept the impacts of inflation under control and ensured the availability of materials to enable our sites to operate with almost no interruptions. In addition, we have hardly any unsold completed residential units, which is a good thing in the current market situation.
Our order backlog is smaller than in the comparison period and the inflow of new orders remains modest. Startups of projects that we have won but which have not been entered into the order backlog yet have been delayed due to, for example, city plan schedules, but we still see that these projects will generate a flow of orders and profitable business in the future. At the end of the review period, the value of such projects amounted to around
During the review period, we continued to proactively mobilise our lifecycle-wise strategy at the project level. The lifecycle wisdom of the projects we build is based on emission-free construction sites, environmentally friendly material choices, energy and resource efficiency, use of renewable energy, taking the environment into consideration through materials recycling, and SRV's recently launched biodiversity targets.
In general, we expect that market conditions will remain cloudy, primarily due to uncertainties surrounding demand, inflationary pressure on energy prices and the housing construction boom seen in
I would like to thank our shareholders and financiers for the successful result of the financing arrangement as well as our customers, other partners and our committed personnel for the half-year period now ended. Enjoy the rest of the summer!"
Overall review
Group key figures | 1-6/ | 1-6/ | change, | 4-6/ | 4-6/ | 1-12/ | Previous | |
(IFRS, EUR million) | 2022 | 2021 | change | % | 2022 | 2021 | 2021 | 12 mo. |
Revenue | 402.1 | 405.1 | -3.0 | -0.8 | 211.4 | 218.0 | 932.6 | 929.5 |
Construction | 382.0 | 406.3 | -24.3 | -6.0 | 206.8 | 218.5 | 930.1 | 905.9 |
Investments | 5.9 | 2.0 | 3.9 | 193.4 | 4.8 | 1.0 | 6.8 | 10.7 |
Other operations and eliminations | 14.2 | -3.2 | 17.4 | -0.2 | -1.5 | -4.4 | 13.0 | |
Operative operating profit 1) | 14.7 | 10.5 | 4.3 | 40.7 | 9.8 | 5.7 | 5.3 | 9.6 |
Construction | 16.2 | 13.9 | 2.4 | 17.1 | 9.9 | 7.0 | 14.1 | 16.5 |
Investments | 0.9 | -1.2 | 2.1 | 1.1 | -0.5 | -4.6 | -2.4 | |
Other operations and eliminations | -2.4 | -2.1 | -0.2 | -1.2 | -0.8 | -4.3 | -4.5 | |
Operative operating profit, % | 3.7 | 2.6 | 4.6 | 2.6 | 0.6 | 1.0 | ||
Operating profit | -75.6 | 11.4 | -87.0 | -736.0 | 10.1 | 6.3 | -1.7 | -88.7 |
Construction | 16.2 | 13.9 | 2.4 | 17.1 | 9.9 | 7.0 | 14.1 | 16.5 |
Investments | -104.0 | -0.3 | -103.7 | 1.4 | 0.1 | -11.6 | -115.2 | |
Other operations and eliminations | 12.2 | -2.1 | 14.3 | -1.2 | -0.8 | -4.3 | 10.1 | |
Operating profit, % | -18.8 | 2.8 | 4.8 | 2.9 | -0.2 | -9.5 | ||
Financial income and expenses, total | 0.8 | -7.8 | 8.6 | 43.6 | -3.7 | -18.6 | -10.1 | |
Profit before taxes | -74.8 | 3.6 | -78.4 | -2,166.0 | 53.7 | 2.6 | -20.3 | -98.8 |
Net profit for the period | -82.1 | 3.6 | -85.7 | 51.3 | 2.1 | -19.9 | -105.6 | |
Net profit for the period, % | -20.4 | 0.9 | 24.2 | 0.9 | -2.1 | -11.4 | ||
Order backlog (unrecognised) 2) | 745.9 | 1,047.5 | -301.5 | -28.8 | 872.3 | |||
New agreements | 202.4 | 261.3 | -58.9 | -22.6 | 72.3 | 176.0 | 588.6 | 529.7 |
1) The reconciliation calculation for operative operating profit can be found underneath the "Key figures" table.
2) The Group's order backlog consists of the Construction business.
Group key figures | 1-6/ | 1-6/ | change, | 1-12/ | |
(IFRS, EUR million) | 2022 | 2021 | change, | % | 2021 |
Equity ratio, % | 33.3 | 26.1 | 27.4 | ||
Equity ratio, %, excl. IFRS 161) | 43.9 | 32.5 | 32.8 | ||
Net interest-bearing debt | 90.1 | 279.8 | -189.7 | -67.8 | 170.0 |
Net interest-bearing debt, excl. IFRS 161) | -4.6 | 152.5 | -157.1 | -103.0 | 81.0 |
Net gearing ratio, % | 64.2 | 151.9 | 103.0 | ||
Net gearing ratio, %, excl. IFRS 161) | -3.1 | 80.3 | 47.5 | ||
Return on investment, % | -17.4 | 10.9 | -1.4 | ||
Capital employed | 276.1 | 524.1 | -248.0 | -47.3 | 403.0 |
Construction | 207.4 | 384.9 | -177.4 | -46.1 | 195.8 |
Investments | 14.3 | 176.2 | -161.9 | -91.9 | 167.3 |
Other operations and eliminations | 54.4 | -37.0 | 91.4 | -241.8 | 40.0 |
Capital employed, excl. IFRS 161) | 187.3 | 402.4 | -215.1 | -53.4 | 319.4 |
Return on equity, % | -107.5 | 4.0 | -11.5 | ||
Earnings per share, EUR2) | -8.66 | 0.28 | -8.9 | -3,192.7 | -2.1 |
Share price at end of period | 0.13 | 0.66 | -0.53 | -80.3 | 0.53 |
Weighted number of shares at end of period, millions 2) | 381.5 | 375.9 | 375.9 |
1) The figure has been adjusted to remove the impacts of IFRS 16.
2) The key figure has been adjusted for the share issue and the reverse share split in July.
Earnings trends for the segments
Construction January-
Construction's revenue declined to
Construction's operating profit rose to
Construction's order backlog stood at
Construction's capital employed totalled
Construction April-
Revenue from construction totalled
Investments January-
Investments' revenue was
Investments' operative operating profit amounted to
Investments' operating profit was
Capital employed totalled
The return on investment was -216.7 (4.5) per cent. Return on investment was impacted primarily by write-downs of assets in
Outlook for 2022
During 2022, SRV's revenue and result will be affected by several factors in addition to general economic trends, such as: the timing and amount of income recognition for SRV's own projects, which are recognised as income upon delivery; the margin of the order backlog and its development; the start-up of new contracts and development projects; the war that
- Consolidated revenue for 2022 is expected to amount to
EUR 800-860 million (earlier outlook:EUR 800-950 million ) (revenue in 2021:EUR 932.6 million ). - Operative operating profit is expected to improve on 2021 and to be
EUR 15-25 million (earlier outlook: Operative operating profit is expected to improve on 2021) (operative operating profit in 2021:EUR 5.3 million ).
Espoo,
Board of Directors
All forward-looking statements in this review are based on management's current expectations and beliefs about future events. The company's actual results and financial position may differ materially from the expectations and beliefs such statements contain due to a number of factors that have been presented in this interim report, and in particular the ongoing coronavirus pandemic.
Financial results briefing
A briefing for analysts, fund managers, investors and media representatives will be held on
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SRV in brief
SRV is a Finnish developer and innovator in the construction industry. We are building a more sustainable and responsible urban environment that fosters economic value and takes into consideration the wellbeing of both the environment and people. We call this approach lifecycle wisdom. Our genuine engagement and enthusiasm for our work comes across in every encounter - and listening is one of our most important ways of working. We believe that the only way to change the world is through discussion.
Our company, established in 1987, is listed on the
SRV - Building for life
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