12.9.2025 14:09:50 EEST | HLRE Holding Oyj | Half Year financial report
Figures in parentheses refer to the corresponding period of the previous year.
May - July 2025 in Brief
- Q2 revenue increased by 7 % to EUR 27.0 million (EUR 25.1 million).
- Q2 gross profit increased to EUR 9.8 million (EUR 9.2 million).
- Q2 adjusted EBITDA was EUR 0.6 million (EUR 0.6 million).
- Q2 net cash from operating activities was EUR 0.7 million (EUR 0.5 million).
February - July 2025 in Brief
- H1 revenue increased by 7 % to EUR 48.8 million (EUR 45.7 million).
- H1 gross profit increased to EUR 18.4 million (EUR 17.7 million).
- H1 adjusted EBITDA was EUR 0.4 million (EUR 0.9 million).
- H1 net cash from operating activities was EUR 1.2 million (EUR -2.6 million).
Key Figures
| HLRE HOLDING GROUP EUR Million | May- July 25 Q2 | May- July 24 Q2 | Feb- July 25 H1 | Feb- July 24 H1 | Feb 24 - Jan 25 Q1-Q4 |
| Revenue | 27,0 | 25,1 | 48,8 | 45,7 | 102,9 |
| Gross profit | 9,8 | 9,2 | 18,4 | 17,7 | 37,3 |
| Gross margin,% | 36,2 % | 36,7 % | 37,7 % | 38,7 % | 36,2 % |
| Adjusted EBITDA* | 0,6 | 0,6 | 0,4 | 0,9 | 1,8 |
| EBIT | -0,7 | -0,9 | -2,5 | -2,5 | -5,1 |
| Net cash from operating activities | 0,7 | 0,5 | 1,2 | -2,6 | 0,1 |
*Adjusted EBITDA for the period of
Q2 April - July 24 has been revised to EUR 0.6 million (previously reported EUR 0.8 million) and
H1 February - July 24 has been revised to EUR 0.9 million (previously reported EUR 1.4 million)
Q1-Q4 February 24 - January 25 has been revised to EUR 1.8 million (previously reported EUR 2.2 million).
The Group received one-off compensations for leasing argreements and capital gains from sold tangible assets in the last financial year, which has not previously recorded as an extraordinary item.
Company description
HLRE Holding Group (commonly known as Vesivek Group) is a leading provider of roof and roof product renovations, primarily offered to detached and row houses in Finland and Sweden under the Vesivek brand. In addition to roof and roof product installations, Vesivek provides underground drain renovations in eight locations in Finland. The Group also develops, manufactures, and sells high quality rainwater systems and roof safety products.
HLRE Holding Group operates in 13 locations in Finland and three locations in Sweden and employing an average of approximately 700 employees. The Group has two production facilities in Finland, steel roofing profile production in Pirkkala and the production of rainwater systems and roof safety products in Orimattila.
Management Overview of the second quarter
The Group's revenue and gross profit improved in the second quarter compared to the same period last year. Especially in Sweden the roof installation business performed very well. Revenue increase was 22% and gross profit increase 57%. In Finland roof installation and roof product sales grew compared to last year. Gross profit remained at previous year level due to the sales mix where sales were more focused on non-consumer projects with lower profitability.
However, investments in revenue growth were reflected in increased fixed personnel costs and other fixed operating expenses. Due to that reason the adjusted EBITDA with EUR 0.6 million remained at previous year level.
Despite revenue growth, sales volumes remained low in the second quarter, especially in the Finnish business areas. Q2 results fell short of our forecast. The Group has started negotiations in August to reduce fixed personnel costs in order to improve profitability towards the year end.
Second quarter May - July 20245
Q2 revenue increased by 7 % to EUR 27.0 million (25.1 million). Revenue grew especially in roof installation business in Sweden. Gross profit was EUR 9.8 million (9.2 million).
Q2 reported EBITDA was EUR 1.0 million (0.8 million) and adjusted EBITDA EUR 0.6 million (0.6 million). Despite the growth in revenue and gross profit, the adjusted EBITDA remained at previous year level due to higher fixed personnel and administrative expenses. The reported one-off items for Q2 May - July 2025 concern received capital gains from sold tangible assets (vehicles) amounted to EUR 0.4 million.
Q2 operating cash flow was EUR 0.7 million (0.5 million). Cash flow increased due to the positive changes in working capital and lower net financial items. The change in cash and cash equivalents was EUR -0.1 million.
First half 2025
H1 revenue increased by 7 % to EUR 48.8 EUR million (EUR 45.7 million). H1 gross profit increased to EUR 18.4 million (EUR 17.7 million). Revenue and gross profit grew especially in roof installation business in Sweden.
H1 reported EBITDA decreased to EUR 0.8 million (1.1 million) and adjusted EBITDA to EUR 0.4 million (0.9 million). Reported adjustments in H1 amounted to EUR 0.4 and mainly concerned received capital gains from sold tangible assets (vehicles).
H1 net cash from operating activities was EUR 1.2 million (EUR -2.6 million). Cash flow increased due to the positive changes in working capital, lower net financial items and lower paid taxes. The change in cash and cash equivalents was EUR -1.2 million due to the payments of lease liabilities and other borrowings.
Outlook for the financial year 1 February 2025 - 31 January 2026
Market growth expectations for the installation business in Sweden are strong, and we expect growth in Swedish business to continue in the second half of the year. In Finland, on the contrary, market growth expectations will remain low.
The Group has started negotiations in August to reduce fixed personnel costs in order to improve profitability towards the year end in Finnish roof installation business. We expect that the EBITDA will increase in H2 compared to the previous year level mainly due to the business growth in Sweden and cost saving operations in Finland.
Risks and business continuity
The Half Year Financial Report for the period of February 25 - July 25 has been prepared based on the going concern principle, assuming that the Company will have positive operating cash flow sufficient to meet it's obligations as part of normal business operations in the foreseeable future.
The Group's revenue and operating profit are affected by the general economic situation, which in turn is influenced by many factors beyond the Group's control. The Group currently operates in Finland and Sweden. Currently, most of the Group's operations are located in Finland. Accordingly, the Group's revenue and operating profit are particularly sensitive to general economic conditions and perceptions of future general economic situation in the Finnish and Swedish markets.
Uncertainty or adverse developments in the general economic situation may affect the Group's business and demand for the Group's products and services, among other things, by affecting consumer confidence and adversely affecting the business of the Group's corporate customers who purchase the Group's rainwater systems and roof safety products. It is important to note that the general economic situation may adversely affect the level and cost of financing available to the Group's consumer and corporate clients to make investments in renovations and refurbishments. In addition, rising financing costs and a decrease in the level of available financing may adversely affect the Group's ability to make investments and achieve its strategic objectives, as well as adversely effect on the Group's business, financial position and results. Through its manufacturing operations, the Group is furthermore exposed to fluctuations in certain commodity prices (such as steel, aluminum and wood) and energy prices (especially through fuel costs for vehicles) and price increases due to economic disruptions and changes in general market conditions may adversely affect the Group's business, financial position and results. All the above factors may harm the Group's operations, and the Group cannot anticipate how the future economic environment and market conditions may affect the Group's operations.
In general, the frequency of accidents at construction sites is noteworthy and the Group operates in a business segment subject to extensive laws and regulations regarding the work environment. Despite the required health and safety measures and, for example, the use of scaffolding to improve employee safety on construction sites, the Group is exposed to potentially fatal accidents at workplaces, particularly on roofing renovation sites, but also at its production facilities. In addition to physical injuries, the Group's employees are exposed to risks related to hazardous substances, as some of the Group's renovation sites contain asbestos. Respectively, the Group must also comply with specific environmental regulations with respect to asbestos. Finnish legislation has particularly strict requirements for any activities involving asbestos and the safety requirements for such activities. Failure to comply with the regulations concerning health and safety or asbestos related activities may result in liability for the Group and/or the Group's permit being revoked. For example, if Group's permit to handle asbestos would be revoked, the Group would need to stop all business activities relating to handling of asbestos and acquire the work through subcontractors. In addition, any potential accidents and health impacts adversely affect employee well-being. The Group as an employer is exposed to risks related to health and safety issues of its employees, which may lead to a decrease in employees' ability to work.
The Group's management has prepared financial forecasts for revenue, expenses and investments, taking into account the refinancing of the bond and extensive efficiency measures. In assessing the going concern assumption, management believes that the company's current liquid funds and projected operating cash flows will be sufficient to cover its liabilities and obligations arising from its operations for at least 12 months, so the interim financial statements have been prepared on a going concern basis. The forecasts assume a positive turn in the markets. In addition, the Group's management has taken measures to improve the cash position by, for example, switching to the use of consignment stock for steel products.
Due to general economic uncertainty, industry cyclicality, and the short time horizon of the order book, forecasting involves a higher degree of judgment than usual. If the business does not develop as forecasted, there is a risk of liquidity being compromised and covenants being breached, which may raise significant doubts about the Group's ability to continue as a going concern. Such factors would also affect the valuation of Group's goodwill and the shares and receivables of the parent company's subsidiaries at the balance sheet.
The Finnish roof renovation and roof product installation business has not performed as planned in the first half year and EBITDA level has been lower than estimated. Finnish economy has not recovered as estimated in the beginning of the year. The Group went through the change negotiations in August, which resulted in a decrease of 70 person. Delays in recovery in Finnish roof renovation business will increase the risk that the Group will not meet covenant requirements at the end of the year 2025. The Group's saving measures in August should improve financial results in the third quarter. The management will follow on monthly basis the business recovery and will prepare impairment tests in Q3 if saving measures are not efficient enough to convert Finnish roof renovation business performance.
Additional information
Juha Nuutinen, CFO
+358 50 438 0984
juha.nuutinen@vesivek.fi
| HLRE Holding Group | |||||
| 2611405-7 | |||||
| Consolidated Statement of Comprehensive Income | |||||
| 1000 EUR | 1.5-31.7.2025 Q2 | 1.5.-31.7.2024 Q2 | 1.2.-31.7.2025 H1 | 1.2.-31.7.2024 H1 | 1.2.2024-31.1.2025 |
| REVENUE | 26 971 | 25 112 | 48 837 | 45 660 | 102 929 |
| Other operating income | 606 | 369 | 758 | 1 012 | 997 |
| Material and services | -10 713 | -9 909 | -17 777 | -17 025 | -39 350 |
| Employee benefits expense | -10 943 | -10 073 | -21 295 | -19 463 | -43 459 |
| Depreciation and amortisation | -1 667 | -1 742 | -3 335 | -3 572 | -6 937 |
| Other operating expenses | -4954 | -4 684 | -9 728 | -9 083 | -19 232 |
| OPERATING PROFIT | -700 | -926 | -2540 | -2 471 | -5 052 |
| Finance income | 468 | -279 | 491 | 913 | 551 |
| Finance expense | -1 495 | -1 133 | -3 911 | -2 392 | -5 129 |
| Finance income and expense | -1 027 | -1 412 | -3 420 | -1 478 | -4 579 |
| PROFIT/LOSS BEFORE TAX | -1 728 | -2 339 | -5 960 | -3 950 | -9 630 |
| Tax on income from operations | 178 | 316 | 944 | 560 | 1 284 |
| PROFIT/LOSS FOR THE PERIOD | -1 549 | -2 023 | -5 015 | -3 390 | -8 347 |
| Profit attributable to: | |||||
| Owners of the parent company | -1 564 | -1 917 | -4 998 | -3 170 | -7 932 |
| Non-controlling interests | 14 | -105 | -17 | -220 | -414 |
| -1 549 | -2 023 | -5 015 | -3 390 | -8 347 | |
| Other comprehensive income: | |||||
| Items that may be reclassified subsequently to profit or loss | |||||
| Exchange differences on translating foreign operations | -37 | 30 | 48 | -50 | -33 |
| Items that may be reclassified subsequently to profit or loss | -37 | 30 | 48 | -50 | -33 |
| TOTAL COMPREHENSIVE INCOME | -1 586 | -1 993 | -4 967 | -3 440 | -8 380 |
| Total comprehensive income attributable to: | |||||
| Owners of the parent company | -1 597 | -1 890 | -4954 | -3 215 | -7 963 |
| Non-controlling interests | 11 | -103 | -13 | -224 | -417 |
| -1 586 | -1 993 | -4 967 | -3 440 | -8 380 | |
| HLRE Holding Group | |||
| 2611405-7 | |||
| Consolidated Statement of Financial Position | |||
| 1000 EUR | 31.7.2025 | 31.7.2024 | 31.1.2025 |
| ASSETS | |||
| NON-CURRENT ASSETS | |||
| Goodwill | 35 273 | 35 273 | 35 273 |
| Intangible assets | 535 | 615 | 629 |
| Property, plant, equipment | 8 233 | 10 156 | 9 310 |
| Property, plant, equipment, right-of-use | 11 742 | 13 414 | 13 384 |
| Other non-current financial assets | 51 | 48 | 48 |
| Loan receivables | 2 | 8 | 5 |
| Deferred tax assets | 4 288 | 2 562 | 3 256 |
| NON-CURRENT ASSETS | 60 124 | 62 077 | 61 904 |
| CURRENT ASSETS | |||
| Inventories | 11 645 | 13 015 | 11 228 |
| Trade and other receivables | 9 202 | 7 686 | 6 618 |
| Loan receivables | 45 | 50 | 47 |
| Income tax receivable | 354 | 716 | 724 |
| Cash and cash equivalents | 1 341 | 1 712 | 2 498 |
| CURRENT ASSETS | 22 588 | 23 178 | 21 115 |
| ASSETS | 82 712 | 85 255 | 83 019 |
| EQUITY AND LIABILITIES | |||
| Owners of the parent company | |||
| Share capital | 80 | 80 | 80 |
| Reserve for invested unrestricted equity | 18 002 | 18 002 | 18 002 |
| Translation differences | 126 | -183 | -170 |
| Retained earnings | -16 681 | -6 841 | -11 683 |
| Owners of the parent company | 1 275 | 11 058 | 6 229 |
| Non-controlling interests | -472 | -265 | -458 |
| EQUITY | 803 | 10 793 | 5 771 |
| NON-CURRENT LIABILITIES | |||
| Finance and lease liabilities | 59 089 | 54 231 | 58 318 |
| Employee benefit obligation | 374 | 400 | 374 |
| Deferred tax liabilities | 80 | 37 | 74 |
| NON-CURRENT LIABILITIES | 59 543 | 54 668 | 58 766 |
| CURRENT LIABILITIES | |||
| Finance and lease liabilities | 4 677 | 5 250 | 5 299 |
| Other current liabilities | 15 575 | 14 502 | 13 125 |
| Income tax liabilities | 113 | 42 | 59 |
| CURRENT LIABILITIES | 22 366 | 19 794 | 18 483 |
| Liabilities | 81 909 | 74 462 | 77 249 |
| EQUITY AND LIABILITIES | 82 712 | 85 255 | 83 019 |
| HLRE Holding Group | |||||
| 2611405-7 | |||||
| Consolidated Statement of Cash Flows, indirect | |||||
| 1000 EUR | 1.5.-31.7.2025 Q2 | 1.2.-31.7.2024 Q2 | 1.2.-31.7.2025 H1 | 1.2.-31.7.2024 H1 | 1.2.2024-31.1.2025 Q1-Q4 |
| Cash flows from operating activities | |||||
| PROFIT/LOSS FOR THE PERIOD | -1 549 | -2 023 | -5 015 | -3 390 | -8 425 |
| Adjustments to the profit/loss for the period | |||||
| Depreciation, amortisation and impairment | 1 667 | 1 742 | 3 335 | 3 572 | 6 937 |
| Financial income and expenses | 1 488 | 1 110 | 2 673 | 2 286 | 4 995 |
| Tax on income from operations | -178 | -316 | -944 | -560 | -1 206 |
| Other adjustments | -856 | 518 | 323 | -874 | -546 |
| Adjustments total | 2 120 | 3 055 | 5 387 | 4 423 | 10 180 |
| Working capital changes | |||||
| Increase / decrease in inventories | -47 | 282 | -367 | -242 | 1 569 |
| Increase / decrease in trade and other receivables | -284 | 428 | -2 543 | -1 459 | -465 |
| Increase / decrease in trade payables | 826 | -713 | 4 041 | 1 456 | 1 478 |
| Interest paid | -364 | -450 | -697 | -829 | -1 628 |
| Interest received | 10 | 34 | 23 | 77 | 155 |
| Other financial items | 0 | 2 | -11 | -2 367 | -2 477 |
| Income taxes paid | -38 | -94 | 351 | -240 | -239 |
| Net cash from operating activities | 674 | 521 | 1 167 | -2 571 | 148 |
| Cash flows from investing activities | |||||
| Purchase of tangible and intangible assets | -187 | -199 | -324 | -283 | -614 |
| Proceeds from sale of tangible and intangible assets | 851 | 580 | 894 | 628 | 412 |
| Acquisition of subsidiaries, net of cash acquired | 0 | -2 | 0 | -2 | -2 |
| Purchase of investments | -3 | 0 | -3 | 0 | 0 |
| Loans granted | 0 | 0 | 0 | -1 | -1 |
| Proceeds from repayments of loans | 3 | 4 | 6 | 8 | 13 |
| Addition / deduction of cash equivalents | -20 | 15 | -15 | 3 | 0 |
| Net cash used in investing activities | 644 | 398 | 558 | 352 | -1941 |
| Cash flows from financing activities | |||||
| Purchase of treasury shares | 0 | -13 | 0 | -18 | 0 |
| Proceeds from current borrowings | 0 | 0 | 0 | 976 | 976 |
| Payment of short term loans | -326 | 0 | -651 | 0 | 0 |
| Proceeds from non-current borrowings | 0 | 66 | 0 | 3 066 | 3066 |
| Payment of lease liabilities | -1 133 | -1 681 | -2 262 | -2 668 | -4 074 |
| Net cash used in financing activities | -1 458 | -1 628 | -2 912 | 1 356 | -32 |
| Net change in cash and cash equivalents | -140 | -711 | -1 188 | -863 | -75 |
| Cash and cash equivalents, opening amount | 1 493 | 2 423 | 2 498 | 2 574 | 2 574 |
| Net increase/decrease in cash and cash equivalents | -140 | -711 | -1 188 | -863 | -75 |
| Cash and cash equivalents | 1 341 | 1 712 | 1 341 | 1 712 | 2 498 |
| HLRE Holding Group | ||||||||
| Consolidated Statement of Changes in Equity | Attributable to owners of the Company | |||||||
| 1000 EUR | Share capital | Reserve for invested unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity | |
| EQUITY 1.2.2025 | 80 | 18 002 | -170 | -11 683 | 6 229 | -458 | 5 771 | |
| Comprehensive income | ||||||||
| Profit/loss for the period | -4 998 | -4 998 | -17 | -5 015 | ||||
| Other comprehensive income: | ||||||||
| Translation differences | 0 | 0 | 44 | 0 | 44 | 4 | 48 | |
| TOTAL COMPREHENSIVE INCOME | 0 | 0 | 44 | -4 998 | -4 954 | -13 | -4 967 | |
| Transactions with owners | ||||||||
| Total transactions with owners | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| TOTAL EQUITY 31.7.2025 | 80 | 18 002 | -126 | -16 681 | 1 275 | -472 | 803 | |
| 1000 EUR | Share capital | Reserve for invested unrestricted equity | Translation differences | Retained earnings | Total | Non-controlling interests | Total equity |
| EQUITY 1.2.2024 | 80 | 18 002 | -140 | -3599 | 14343 | -91 | 14 252 |
| Comprehensive income | |||||||
| Profit/loss for the period | -3 170 | -3 170 | -220 | -3 390 | |||
| Other comprehensive income: | |||||||
| Translation differences | 0 | 0 | -45 | 0 | -45 | -4 | -50 |
| TOTAL COMPREHENSIVE INCOME | 0 | 0 | -45 | -3 170 | -3 215 | -224 | -3 440 |
| Treasury shares, acquisition | 0 | 0 | 0 | -18 | -18 | 0 | -18 |
| Total transactions with owners | 0 | 0 | 0 | -18 | -18 | 0 | -18 |
| Changes in ownership interests in subsidiaries | |||||||
| Changes in ownership interests without loss of control | -52 | -52 | 50 | -2 | |||
| TOTAL EQUITY 31.7.2024 | 80 | 18 002 | -185 | -6 839 | 11 058 | -265 | 10 793 |
Notes to the condensed consolidated financial statements
1) Reporting entity
This consolidated Interim Financial Statement is the Financial Statement for the Group, which consists of a Finnish public limited company operating under Finnish law, with business ID 2611405-7 (hereinafter "HLRE Holding", "Company", or "parent company") and its subsidiaries, collectively referred to as "HLRE", "HLRE Group" or "Group". The parent company's domicile is Pirkkala, and its registered address is Jasperintie 273, FI-33960 Pirkkala, Finland.
2) Basis of preparation
These consolidated Interim Financial Statements do not include all of the information required for a complete set of financial statements prepared in accordance with IFRS and accordingly, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual financial statements. The accounting policies applied are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the financial year ended January 31, 2025.
The consolidated financial statements are presented as thousands of euros, unless otherwise specified, and the numbers are rounded off to the nearest thousand. Because of this, the sum of individual figures can deviate from the reported total.
The company's auditors have not reviewed this Interim Report.
The management has assessed the Company's ability to continue its operations as a going concern for the foreseeable future. In making this assessment, the Company's management has prepared forecasts for revenues, operating costs, and investments for the next twelve months. The forecasts are based on the assumption that the structural reorganization carried out in Finland in 2024 and continuing in 2025 has aligned the organization with demand.
As of 31 July 2025, the Company's cash and cash equivalents amounted to EUR 1.3 million. The management believes that the current cash balance is adequate to cover the Company's operational costs and investment plans for the next twelve months.
Looking ahead, the Company anticipates the improved profitability and cash flow for the next quarter. Despite the inherent uncertainties, the management remains confident in the Company's ability to navigate challenges and capitalize on opportunities.
Taking into account the aforementioned factors and considerations, the financial statements have been prepared on a going concern basis. The management will continue to closely monitor the Company's financial performance and adapt its strategies as necessary to ensure long-term sustainability and growth.
3) Seasonality of operations
The Group operates in an industry that sees major seasonal changes. In a typical year, the second and third quarter together amount major share of the Group's full-year EBITDA.
Management has reacted to seasonal changes in customer volumes and demand for roof, roof product and underground drain renovations through workforce adjustment and structural changes in business area management and sales functions in Finland.
4) Segment information and revenue
The Board of Directors of HLRE Holding is the Group's chief operating decision maker, and operating segments have been specified based on the information reviewed by the Board of Directors in order to allocate resources and assess the profitability of business operations. The Board of Directors manages the HLRE Group as a single integrated business aggregate, and therefore HLRE has a single operating and reportable segment.
The revenue of the HLRE Holding Group is primarily generated by roofing, roof product and underground drain renovations for single-family homes and housing companies pursuant to the service concept developed by the Company, as well as project and direct sales of rainwater systems and roof safety products. The entire service chain - product development, manufacturing, sales and installation - is managed in-house by the Group.
The HLRE Holding Group is operating in Finland and Sweden. Small-scale out of total H1 revenue was generated by direct sales of rainwater systems and roof safety products from Vesivek Tuotteet Oy in Finland to Baltic countries and Sweden. The Swedish turnover was generated by roofing and roof product installations and small-scale by direct sales of rainwater systems and roof safety products:
| Breakdown of revenue by country | |||
| 1000 EUR | Feb 25 - Jul 25 H1 | Feb 24 - Jul 24 H1 | Feb 24 - Jan 25 Q1-Q4 |
| Finland | 37 439 | 36 012 | 81 539 |
| Sweden | 11 023 | 9 381 | 20 797 |
| Baltic countries | 375 | 267 | 593 |
| Total | 48 837 | 45 660 | 102 929 |
5) Financial liabilities
The Group announced in January 2024 that it had concluded the negotiations with the majority holder of the bond on the terms and conditions for refinancing the bond, while at the same time announcing that, as the maturity of the outstanding bonds, being 12 February 2024, was approaching, it will request for a one-month extension to finalize the terms and conditions. On 5 February 2024, the Group announced that the majority of the bondholders had approved the one-month extension. In February 2024, the Group continued to finalize the terms and conditions of the bond, announcing on 8 March 2024 the refinancing of the three-year SEK 300 million bond and the registration of the bond with Nasdaq Stockholm on 13 March 2024.
The bond falls due for payment on 12 February 2027. The terms and conditions include an interest premium of 7.85% for the deferral of the payment dates between 12 February 2024 and 12 May 2025 until the loan maturity date. The updated terms and conditions also include the option after 12 May 2025 to postpone 30% of the 7.85% interest premium until the loan maturity date. The Group used the option and postponed 30 % of the interest premium during 12 May 2025 - 12 August 2025.
In addition, the terms and conditions of the bond included a five-year convertible bond of EUR 3 million issued by the Company's principal shareholders and around EUR 66 thousand to minor shareholders. The principal of the convertible bond is subject to a fixed annual interest rate of 8.00%. The accrued interest shall be paid on the maturity date of the loan or on the conversion date specified separately in the agreement, whichever earlier. Until then, all accrued interest will remain as debt, but the accrued interest will not be added to the loan principal and will not accrue interest.
The updated terms and conditions of the bond do not include the net debt/EBITDA covenant until 2025 July. After that, the covenant will be 5.0 until January 2026, 4.5 between February 2026 and July 2026, and 4.0 from August 2026 until the loan maturity date in February 2027. The updated terms and conditions also include a liquidity covenant of EUR 2 million.
| Maturities of contracts of financial liabilities 31 July 2025 | ||||||
| 1000 EUR | No more than 12 months | Over 1 year and no more than 2 years | Over 2 years and no more than 5 years | Over 5 years | Total | Book value |
| Trade payables | 7 680 | 7 680 | 7 680 | |||
| Lease liabilities | 4 680 | 3 925 | 3 964 | 41 | 12 610 | 12 394 |
| Bonds | 3 066 | 32 498 | 35 564 | 30 828 | ||
| Convertible bonds | 4 296 | 4 296 | 3 418 | |||
| Shareholder loans | 18 146 | 18 146 | 16 801 | |||
| Loans from financial institutions | 325 | 325 | 325 | |||
| 15 751 | 36 423 | 26 406 | 41 | 78 621 | 71 466 | |
| Maturities of contracts of financial liabilities 31 January 2025 | ||||||
| 1000 EUR | No more than 12 months | Over 1 year and no more than 2 years | Over 2 years and no more than 5 years | Over 5 years | Total | Book value |
| Trade payables | 4 941 | 4 941 | 4 941 | |||
| Lease liabilities | 4 792 | 3 935 | 5 956 | 121 | 14 804 | 14 007 |
| Bonds | 1 663 | 2 691 | 32 011 | 36 365 | 28 767 | |
| Convertible bonds | 4 296 | 4 296 | 3 287 | |||
| Shareholder loans | 18 146 | 18 146 | 16 581 | |||
| Loans from financial institutions | 976 | 976 | 976 | |||
| 12 372 | 6 626 | 60 409 | 121 | 79 528 | 68 559 | |
6) Commitments and contingent liabilities
The following shares have been pledged as collateral for the bond and overdraft facility:
- HLRE Group Oy, Vesivek Ltd, Vesivek Sverige AB and Vesivek Tuotteet Ltd (formerly Nesco Ltd).
Furthermore, the following internal loans have been pledged as collateral for the bond agreement:
- Loan granted by HLRE Holding Ltd to HLRE Group Ltd amounted to EUR 19,696,333
- Loan granted by HLRE Holding Ltd to Vesivek Ltd amounted to EUR 1,234,960
- Loan granted by HLRE Holding Ltd to Nesco Invest Ltd amounted to EUR 8,446.710
- Loan granted by HLRE Holding Ltd to Vesivek Tuotteet Ltd amounted to EUR 4,510,442
The following business mortgages have been confirmed and pledged as collateral for the bond and overdraft facility:
- HLRE Group Ltd, amounted to EUR 57 200 000
- Vesivek Ltd, amounted to EUR 57 200 000
- Nesco Invest Ltd, amounted to EUR 57 200 000
- Vesivek Tuotteet Ltd, amounted to EUR 57 200 000
- Vesivek Sverige AB amounted to SEK 20 000 000
The following real estate mortgages have been pledged as collateral for the bond and overdraft facility:
- Vesivek Tuotteet Ltd, Orimattila production plant, amounted to EUR 13 673 208.
7) Use of Alternative Performance Measures
Alternative Performance Measures (APM) are financial measures of historical or future financial performance, financial position, or cash flows, other than financial measures defined or specified in the applicable financial reporting framework. HLRE Group reports the financial measures [Gross profit], [Gross margin] and [Adjusted EBITDA] in its quarterly reports, which are not financial measures as defined in IFRS. The Group believes that the alternative performance measures provide significant additional information on HLRE's results of operations, financial position and cash flows The APMs are used consistently over time and accompanied by comparatives for the previous periods.
- Gross profit= Revenues - cost of goods sold
- Gross margin (%) = Gross profit in relation to Revenue
- EBITDA = Operating profit (EBIT) + Depreciation + Amortization
- EBITDA % = EBITDA in relation to Revenue
- Adjusted EBITDA = EBITDA - EBITDA Adjustments
- Adjusted EBITDA % = (EBITDA - EBITDA Adjustments) / Revenue
- Operating profit (EBIT) % = Operating profit in relation to Revenue
- EBITDA adjustments = One-offs regarding restructuring costs and other non-recurring costs
8) Events after the Reporting Date
The Group announced in August (4.8.2025) that it will restructure its organization and operational processes and will initiate change negotiations. In addition to changes in operating practices, the aim of the negotiations is to reduce management layers and enhance the efficiency of the sales organizations in Finland.
The negotiations took place in August, started on 11 August 2025 and ended on 18 August 2025, and concerned all personnel of HLRE Group Ltd, Vesivek Ltd, and Vesivek Salaojat Ltd, excluding installers and foremen. Vesivek Tuotteet Ltd, Tuusulan Peltikeskus Ltd, and Vesivek Sverige AB were entirely excluded from the change negotiations.
As a result of the change negotiations, the number of personnel will decrease by 60 employees. Together with other changes in personnel in August, the amount of employees will decrease by 71 employees from July 2025 head count. The personnel changes are estimated to generate annual savings of EUR 5.0 million. The estimated one-off expenses from the change negotiations is estimated to be EUR 0.4 million and the expenses will be booked in the Q3 Interim Report. These measures are a response to the decline in market demand in recent years and, together with the company's previous actions, aim to restore financial profitability.
