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 million) | 2025 | 2024 | % | 2025 | 2024 | % | 2024 | ||
| Revenue | 168.7 | 186.3 | -17.5 | -9.4 | 330.2 | 353.2 | -23.0 | -6.5 | 745.8 |
| Operative operating profit | 0.8 | 1.5 | -0.7 | -49.5 | 1.9 | 2.7 | -0.9 | -31.1 | 10.3 |
| Operative operating profit, % | 0.4 | 0.8 | -0.4 | 0.6 | 0.8 | -0.2 | 1.4 | ||
| Operating profit | 0.7 | 1.5 | -0.8 | -53.5 | 1.4 | 2.7 | -1.3 | -47.7 | 12.0 |
| Operating profit, % | 0.4 | 0.8 | -0.4 | 0.4 | 0.8 | -0.3 | 1.6 | ||
| Profit before taxes | -1.4 | 0.1 | -1.5 | -1.8 | 0.6 | -2.4 | 5.7 | ||
| Net profit for the period | -0.8 | 0.2 | -1.1 | -1.0 | 0.7 | -1.7 | 5.3 | ||
| Net profit for the period, % | -0.5 | 0.1 | -0.6 | -0.3 | 0.2 | -0.5 | 0.7 | ||
| Earnings per share, eur 1) | -0.06 | -0.03 | -0.03 | -0.11 | -0.04 | -0.07 | 0.18 | ||
| Order backlog (unrecognised) | 931.8 | 1067.3 | -135.5 | -12.7 | 1052.8 | ||||
| Equity ratio, % | 34.4 | 33.6 | 0.7 | 35.1 | |||||
| Equity ratio, %, excl. IFRS 16 2) | 50.1 | 46.9 | 3.1 | 48.2 | |||||
| Net interest-bearing debt | 98.9 | 96.8 | 2.0 | 2.1 | 96.2 | ||||
| Net interest-bearing debt, excl. IFRS 16 2) | -20.7 | -9.0 | -11.7 | -9.2 | |||||
| Net gearing ratio, % | 68.8 | 70.9 | -2.1 | 65.5 | |||||
| Net gearing ratio, %, excl. IFRS 16 2) | -13.3 | -6.2 | -7.1 | -6.0 | |||||
| Financial reserves | 95.2 | 80.4 | 14.8 | 18.4 | 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
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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
