SRV GROUP PLC INTERIM REPORT 30 APRIL 2025 AT 08.30 EEST
SRV Interim Report 1-3/2025: Operative operating profit and order backlog remain stable
January-March 2025 in brief:
- Revenue amounted to EUR 161.4 (167.0) million (-3.3%). Revenue from business and infrastructure construction was down, while housing construction saw slight growth.
- Operative operating profit amounted to EUR 1.1 (1.3) million. Operative operating profit was negatively impacted by the year-on-year decline in volumes, especially in development projects. That said, infrastructure construction achieved a better margin than in the comparison period.
- Operating profit was EUR 0.7 (1.3) million. The result before taxes was EUR -0.5 (0.5) million.
- Equity ratio was 35.0 per cent (33.9% 3/2024) and gearing was 68.9 per cent (80.5% 3/2024). Excluding the impact of IFRS 16, the equity ratio was 49.1 (47.5) per cent and gearing was -4.5 (2.4) per cent.
- At period-end, the order backlog stood at EUR 1,042.6 (1,020.4) million. The sold share of the order backlog was 91.7 (92.5) per cent.
- In addition the order backlog for service periods in lifecycle projects amounted to EUR 106 million.
- New agreements valued at EUR 140.9 (136.4) million were signed in January-March.
- The B2B customer NPS (net promoter score) was 73 (66) at the end of March.
Outlook for 2025 (unchanged)
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 630-710 million (revenue in 2024: EUR 745.8 million).
- Operative operating profit is expected to be positive (operative operating profit in 2024: EUR 10.3 million).
President & CEO's review
"Our business remained stable during the first quarter. Our revenue was down slightly year-on-year to EUR 161.4 million, and our operative operating profit amounted to EUR 1.1 million. Operative operating profit was negatively impacted by the lower volume than in the comparison period, particularly in business premises development projects sold to investors, while infrastructure construction achieved a better margin year-on-year.?
As we had expected in the previous quarter, the market situation remained uncertain in the early months of the year, slowing down the development of our business. Due to low consumer and investor demand, we were not able to start our planned development projects in 2024, which has delayed the development of the company's strategic project portfolio. That said, in the first quarter of this year, we took a step towards our strategic objective of increasing the share of our portfolio accounted for by developer-contracted housing construction when, in February, we launched the construction of our first residential property for sale to consumers after a pause of over two years, Asunto Oy Espoon Niittykummun Neuvokas. We also aim to launch other projects for sale to consumers during this year in the Helsinki metropolitan area, Turku, Tampere and other locations.?
Our order backlog remained robust and was EUR 1,042.6 million. In the first quarter, the projects transferred to our order backlog included a new building for child and adolescent psychiatry for Tampere University Hospital, the renovation of the Pasila Government Agency Centre, and the Nissniku House multipurpose building in Kirkkonummi, which is being carried out as a lifecycle project with SRV being responsible for project design, construction and property maintenance for 20 years. The total value of the Nissniku agreement for SRV, taking into account the lifecycle services, is approximately EUR 50 million; the order for construction work was recognised for February. ?
In addition, previously won contracts and projects under preliminary contracts that have not as yet been recognised in our order backlog totalled around EUR 582 million at the end of March. These include the Turku Ratapiha project and the next phases of the Helsinki Laakso Joint Hospital.?
The company's balance sheet is in good shape, and the number of unsold, completed residential units remained low at the end of March. Our robust financial position is a strength in the uncertain market situation. Thanks to this strength, we can focus on the long-term development of the company and also seize any opportunities that emerge when the economic situation improves.?
One of our major successes in the first months of the year was our double win in the "Safely in the 21st Century" occupational safety competition organised by the Confederation of Finnish Construction Industries RT, covering the Uusimaa region; we competed in the large construction company category. The combined result of TR measurements carried out by the Regional State Administrative Agency at SRV's construction sites was the best in the Uusimaa region. Furthermore, in the site-specific series, the Rajamäki campus site in Nurmijärvi was ranked as the best in TR measurements in the Uusimaa region. This double win is a great recognition of our determined and systematic work in the development of occupational safety culture. I'm pleased with how the commitment to occupational safety at our company is evident all the way from management down to every construction site. We put this strong commitment into practice at our sites by anticipating safety risks, proactively making observations, correcting any deficiencies that are found, and, more broadly, engaging in good management and thereby maintaining high controllability. ?
At the moment, it is almost impossible to predict the development of the market situation. On the one hand, a number of traditionally strong indicators support an upward trend in housing and investment demand. On the other hand, the geopolitical situation and the threat of a trade war undermine consumer and investor confidence in the market and economic development. We expect that private demand will remain relatively weak in the first half of the year, although some positive developments, such as the strengthening of the sales volumes of old apartments, are already underway. The most positive segment of the market, public sector investment, will remain strong. We expect the positive change in the owner-occupied housing market to start gradually towards the end of the year, as the opportunities brought about by lower interest rates and lower inflation, as well as wage settlements and tax reductions, increase the ability and willingness to buy houses. A similar trend will be seen among housing and business premises investors as economic uncertainty eases."
Saku Sipola
Group Key Figures
| 1-3/ | 1-3/ | 1-12/ | |||
| (IFRS, EUR million) | 2025 | 2024 | change | change, % | 2024 |
| Revenue | 161.4 | 167.0 | -5.5 | -3.3 | 745.8 |
| Operative operating profit | 1.1 | 1.3 | -0.1 | -9.3 | 10.3 |
| Operative operating profit, % | 0.7 | 0.8 | -0.0 | 1.4 | |
| Operating profit | 0.7 | 1.3 | -0.5 | -40.9 | 12.0 |
| Operating profit, % | 0.5 | 0.8 | -0.3 | 1.6 | |
| Profit before taxes | -0.5 | 0.5 | -1.0 | 5.7 | |
| Net profit for the period | -0.2 | 0.5 | -0.7 | 5.3 | |
| Net profit for the period, % | -0.1 | 0.3 | -0.4 | 0.7 | |
| Earnings per share, eur 1) | -0.05 | -0.01 | -0.04 | 0.18 | |
| Order backlog (unrecognised) | 1042.6 | 1020.4 | 22.2 | 2.2 | 1052.8 |
| Equity ratio, % | 35.0 | 33.9 | 1.1 | 35.1 | |
| Equity ratio, %, excl. IFRS 16 2) | 49.1 | 47.5 | 1.6 | 48.2 | |
| Net interest-bearing debt | 101.1 | 112.1 | -11.0 | -9.8 | 96.2 |
| Net interest-bearing debt, excl. IFRS 16 2) | -7.1 | 3.5 | -10.5 | -9.2 | |
| Net gearing ratio, % | 68.9 | 80.5 | -11.6 | 65.5 | |
| Net gearing ratio, %, excl. IFRS 16 2) | -4.5 | 2.4 | -6.8 | -6.0 | |
| Financing reserves | 80.5 | 68.2 | 12.3 | 18.0 | 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
On 10 April 2025, SRV announced that the Helsinki Court of Appeal had sentenced Ari Lehtoranta, the Chair of the Board of SRV Group Plc, to a fine in a criminal case involving Nokian Tyres plc securities trading. Lehtoranta's sentence is not related to the operations of SRV Group Plc and the event occurred before he joined the Board of Directors of SRV Group Plc in 2024.
On 24 April 2025, SRV announced that Miimu Airaksinen, SRV Group Plc's SVP, Development and a member of the Corporate Executive Team, has resigned. She will take on a position outside the company by the end of October 2025 at the latest.
Espoo, 30 April 2025
Board of Directors
All forward-looking statements in this interim 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 interim report.
Briefing, webcast and presentation materials
A briefing for analysts, investors and media representatives will be held as a webcast on 30 April 2025, starting at 11:00 EEST. The webcast can be followed live at
www.srv.fi/en/investors. The 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
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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 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
