SRV GROUP PLC HALF-YEAR REPORT 8 AUGUST 2025 AT 08.30 EEST
SRV Half-year Report 1-6/2025: Revenue and order backlog contract - strong
financial reserves
April-June 2025 in brief:
· Revenue declined to EUR 168.7 (186.3) million (-9.4%). This decrease was due
particularly to the low volume of development and developer-contracted projects.
· Operative operating profit amounted to EUR 0.8 (1.5) million. Operative
operating profit was weakened by the low volume of development and developer
-contracted projects. That said, infrastructure construction achieved a better
margin than in the comparison period.
· Operating profit was EUR 0.7 (1.5) million. The result before taxes was EUR
-1.4 (0.1) million.
· Equity ratio was 34.4 per cent (33.6% 6/2024) and gearing was 68.8 per cent
(70.9% 6/2024). Excluding the impact of IFRS 16, the equity ratio was 50.1
(46.9) per cent and gearing was -13.3 (-6.2) per cent.
· Financial reserves were EUR 95.2 (80.4 6/2024) million.
· At period-end, the order backlog stood at EUR 931.8 (1,067.3) million. The
sold share of the order backlog was 90.8 (92.8) per cent. New agreements valued
at EUR 37.7 (215.0) million were signed in April-June.
· In addition, the order backlog for service periods in lifecycle projects
amounted to EUR 105 million.
· The B2B customer NPS (Net Promoter Score) was 69 (68) at the end of June.
January-June 2025 in brief:
· Revenue amounted to EUR 330.2 (353.2) million (-6.5%).
· Operative operating profit amounted to EUR 1.9 (2.7) million with an
operating profit of EUR 1.4 (2.7) million.
· The result before taxes was EUR -1.8 (0.6) million.
· Earnings per share were EUR -0.1 (-0.0).
· New agreements valued at EUR 178.6 (351.4) million were signed in
January-June.
Outlook for 2025 (specified)
During 2025, SRV's revenue and result will be affected by several factors in
addition to general economic trends, such as: the margin of the order backlog
and its development; the start-up of new contracts and development projects;
geopolitical risks, including their related direct and indirect effects, such as
material costs and the availability of materials and labour; and changes in
demand. At the beginning of the year, private demand for new construction is
very low in several segments. For this reason, there is significant uncertainty
about the startup of new projects and their estimated revenue and margin
accrual.
In 2025, revenue will mainly consist of relatively low-margin - yet also low
-risk - cooperative contracting and, to a lesser extent, of competitive and
negotiated contracts. The share accounted for by development projects sold to
investors will remain low. The share of revenue accounted for by developer
-contracted housing production will be very slight in 2025, as no new developer
-contracted projects will be completed during the year.
· Full-year consolidated revenue for 2025 is expected to decline compared with
2024 and to amount to EUR 630-680 million (revenue in 2024: EUR 745.8 million)
(previously: EUR 630-710 million).
· Operative operating profit is expected to be positive (operative operating
profit in 2024: EUR 10.3 million).
President & CEO's review
“Private demand in the market remained weak in the first half of the year. Due
to the exceptionally long period of weak market conditions, competition for
contracts, including cooperative projects, has tightened. However, there are
signs of improvement. Stronger sales of older residential units, a number of
larger real estate portfolio transactions that have been completed and the
development of financing for new funds create confidence in the turnaround of
the market, but it is difficult to assess when and how strong it will be. In
line with our strategy, we are continuing to focus on bolstering our project
development portfolio in both residential and business construction in order to
respond to opportunities opened up by the market turnaround and by managing our
profitability through prudent risk management and project selection.
We cannot be satisfied with the second quarter of 2025. Our revenue declined by
9 per cent compared to the comparison period and was EUR 169 million. Also, our
operative operating profit contracted of the comparison period. In particular,
the lower volumes in development projects and the lack of developer-contracted
housing projects strained our ability to generate profits. The leasing of
business premises in our office skyscraper development project Horisontti
accelerated towards summer. Half of the premises are now leased but due to the
slower lease pace we had to recognise lease responsibilities to our second
quarter result. However, margin accrual in cooperative contracting remained
strong and the margin in infrastructure construction improved on the comparison
period.
Our order backlog decreased in the second quarter and stood at EUR 932 million
at the end of June. We estimate that the flow of orders will be signifantly
stronger during the third quarter. Tendering activities continue to be active,
and we are identifying projects worth several billion euros that will be
included in the tender calculations of public and private actors in the coming
years. In addition, previously won contracts and projects under preliminary
contracts that have not as yet been recognised in our order backlog totalled
around EUR 625 million at the end of June. These include the Turku Ratapiha
project and the next phases of the Helsinki Laakso Joint Hospital.
The company's balance sheet is healthy. The number of unsold, completed
residential units remained low at the end of June, and most of the units are
leased at the moment. In June, we agreed on a new EUR 40 million unsecured
revolving credit facility with our main financing banks. It is tied to our
sustainability targets and strengthens our liquidity during the next three
years. Our robust financial position and balance sheet are major strengths in
the uncertain market situation.
Alongside the challenges posed by the market, we have made significant strides
in continuously improving our operations. Project management is in good shape
and efficiency is being enhanced, as evident in a number of key indicators. The
rolling 12-month accident frequency rate, which is a good indicator of
performance in project management and highly relevant for occupational safety,
declined and was 8.9 at the end of June. Our customers are satisfied with our
operations, and our NPS B2B customer satisfaction rating was 69 at the end of
June. Our employees are motivated, as shown by our good NPS of 29. I am
particularly pleased with our revised values, which are the outcome of extensive
discussions: We're great to work with, Our expertise delivers results, Our
enthusiastic approach takes us far. I believe that our values have been taken to
heart by all our employees and that they support our efforts in ensuring
personnel well-being, good customer service and delivering results.
We continued to forge ahead with our lifecycle-wise strategy during the review
period, and in June we published a biodiversity roadmap to guide our approach to
taking biodiversity into consideration in our business operations in 2025-2030.
We were the first construction company to include a nature footprint target in
our roadmap. The aim is to reduce the nature footprint at the corporate level
and increase the positive nature handprint in cities.
In July, after the review period, we signed an agreement with real estate
investment company Balder Finland for the sale and completion of the Market
Square Hotel in the centre of Oulu. Thanks to this agreement with the new
investor partner, construction will be restarted in autumn 2025 once the
required amendments to the land lease agreements have been signed. The Market
Square Hotel will be completed in summer 2026.
Due to low demand among consumers and investors, our strategy of stepping up the
share of development projects in our portfolio has been delayed. During 2025, no
developer-contracting projects will be recognised as income because, unlike
other types of projects, developer-contracted housing is only recognised as
income upon completion. A housing project intended for sale to consumers that we
started up in February, Asunto Oy Espoon Niittykummun Neuvokas, will be
recognised as income when completed in summer 2026.
Lower interest rates, slower inflation, the positive trend in wages and smaller
taxes on work are boosting consumers' purchasing power, thereby improving
opportunities for buying a residential unit; though, uncertainty about the
economy is still weighing down on home-buying intentions. As interest rates
remain moderate and Finland's GDP develops favourably, we expect the investor
and tenant demand to gradually strengthen, of which a sign is the first
portfolio deals. We have many interesting projects under development and are in
a good position from a supply perspective to respond to a market turnaround. The
urbanization development continues strong and we aim to launch projects for sale
to consumers during this year in Finland.”
Saku Sipola
Group Key Figures
[][][][]
4-6/ 4-6/ change
change 1-6/ 1-6/ change change
1-12/
(IFRS, EUR 2025 2024
% 2025 2024 %
2024
million)
Revenue 186.3
-9.4 330.2 353.2 -6.5
745.8
168.7 -17.5
-23.0
Operative
-49.5 -31.1
operating 0.8 1.5 -0.7
1.9 2.7 -0.9 10.3
profit
Operative 0.4 0.8 -0.4
0.6 0.8 -0.2 1.4
operating
profit, %
Operating
-53.5 -47.7
profit 0.7 1.5 -0.8
1.4 2.7 -1.3 12.0
Operating 0.4 0.8 -0.4
0.4 0.8 -0.3 1.6
profit, %
Profit before
taxes -1.4 0.1 -1.5
-1.8 0.6 -2.4 5.7
Net profit for
the -0.8 0.2 -1.1
-1.0 0.7 -1.7 5.3
period
Net profit for -0.5 0.1 -0.6
-0.3 0.2 -0.5 0.7
the
period, %
Earnings per -0.06 -0.03 -0.03
-0.11 -0.04 -0.07 0.18
share,
eur [1)]
Order backlog 1067.3
-12.7
1052.8
(unrecognised) 931.8 -135.5
Equity ratio, 34.4 33.6 0.7
35.1
%
Equity ratio, 50.1 46.9 3.1
48.2
%, excl.
IFRS 16 [2)]
Net interest
2.1
-bearing 98.9 96.8 2.0
96.2
debt
Net interest
-bearing -20.7 -9.0 -11.7
-9.2
debt, excl.
IFRS 16
[2)]
Net gearing 68.8 70.9 -2.1
65.5
ratio, %
Net gearing -13.3 -6.2 -7.1
-6.0
ratio, %,
excl. IFRS 16
[2)]
Financial 80.4
18.4
reserves 95.2 14.8
79.6
1. The figure has been calculated excluding the hybrid bond interest, tax
adjusted
2. The figure has been adjusted to remove the impacts of IFRS 16
Significant events after the period
There were no significant events after the end of the review period.
Espoo, 8 August 2025
Board of Directors
All forward-looking statements in this half-year report 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 half-year report.
Briefing, webcast and presentation materials
A briefing for analysts, investors and media representatives will be held at
SRV's head office at Horisontti in Kalasatama, Helsinki on 8 August 2025,
starting at 11:00 EET. A webcast of the briefing can be followed live at
www.srv.fi/en/investors. A recording will be available on the website after the
presentation. The materials will also be made available on the website.
For further information, please contact:
Saku Sipola, President & CEO, tel. +358 (0)40 551 5953, saku.sipola@srv.fi
Jarkko Rantala, CFO, tel. +358 (0)40 674 1949, jarkko.rantala@srv.fi
Miia Eloranta, Senior Vice President, Communications and Marketing, tel. +358
(0)50 441 4221, miia.eloranta@srv.fi
Distribution:
Media
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m/srvfinland/)
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 Helsinki Stock Exchange. We
operate in growth centres in Finland. In 2024, our revenue totalled
EUR 745.8 million. In addition to about 800 SRV employees, we had a network of
around 3,200 partners.
SRV - Building for life