SRV's order backlog continued to grow - SRV's interim report 1 January - 30 June 2010
05.08.2010 08:30
Reporting period 1 January-30 June 2010 in brief:
- SRV's revenue was EUR 212.3 million (EUR 183.1 million in January-June 2009), change 16.0%
- Operating profit was EUR 3.1 million (EUR 5.7 million), change 46.4% negative
- Profit before taxes was EUR 0.0 million (EUR 3.3 million)
- The order backlog at the close of the review period was EUR 604.4 million (EUR 461.1 million), change 31.1%
- New contracts EUR 327.3 million (EUR 189.5 million), change 72.7%
- The equity ratio was 35.1 per cent (40.1%)
- Earnings per share were EUR 0.01 (EUR 0.04)
- SRV adheres to the previous outlook for 2010. Revenue in 2010 is expected to exceed the previous year's level and profit before taxes is expected to be positive.
Second quarter 1 April - 30 June 2010 in brief:
- Revenue amounted to EUR 117.3 million (EUR 96.0 million in April - June 2009)
- Operating profit was EUR 1.5 million (EUR 3.9 million)
- Loss before taxes was EUR -0.1 million (profit EUR 2.9 million)
- Earnings per share were EUR 0.02 (EUR 0.04)
The interim report has been prepared in accordance with IAS 34. The disclosed information is unaudited.
"SRV's efforts on customer acquisition and residential construction have produced results. Order backlog grew to all time high in SRV's history amounting to EUR 604 million. The volume of new contracts grew by 72.7 per cent. The development of the order backlog in Business Premises was especially positive, which grew by 59.7 per cent. The position of SRV has strengthened in residential construction as planned. SRV started the construction of 300 developer contracting housing units in the first half of the year, this surpasses the total number of start-ups in 2009. The economic recession put further on hold the start-ups in SRV's international operations and weakened the development of the order backlog in the segment.
In the first half of the year, SRV's revenue grew by 16% thanks to the positive trend in the volume of domestic construction. SRV's operating profit and financial result declined due to decline in volume and growth of operating profit in international operations.
Revenue and order backlog in SRV's Business Premises grew during the first half of the year. The growth of the order backlog proves that SRV's robust expertise in implementation, and our reputation as a reliable construction firm, support new customer acquisition also in a tight market situation. The profitability of the business area was good.
The positive trend in the Housing business area continued. Its revenue and operating profit improved, thanks to the growth in contract production volumes and housing sales. SRV sold a total of 197 housing units to consumers (78 units in January-June 2009). Demand for housing is also directed towards projects under construction and as a result of premarketing outcome, SRV has decided to start the construction of another 110 residential units.
In our Russian operations, start-ups of projects under development were postponed. The Russian financial and property markets are gradually recovering. In order to further boost our growth strategy, we have diversified our business model. Besides developing implementation of SRV's current projects, we are seeking growth by placing emphasis on the preparation of the first investment sites for the property fund, as well as the development of a shopping centre to be realised in cooperation with Shanghai Industrial Investment Group.
SRV's result is not on a satisfactory level due to postponement of projects in the International Business Area. We will now focus our efforts on start-up of key projects in order to raise the volume of the segment to the level required by its cost level.
"SRV boasts strong innovative project development, and we will continue our efforts on it by utilising the support from the company's solvency and financing position. Even though the business premises market is challenging, I believe that through project development SRV can start projects that are important to the business activities of our clients. As an example of successful result of persistence we can mention the Karisto shopping centre project, the construction contract for which was signed in June. In the domestic housing production our aim is to raise our market share in the growth centres. Of the long-term possibilities offered by project development we can mention, among others, the Keilaniemi Towers project, the future metro station in Niittykumpu district in Espoo and the project for planning the land use of the neighbouring areas, as well as the Sitra's Low2No project with the aim to develop and implement a solution for the construction of low carbon or no-carbon sustainable urban environment", says Jukka Hienonen, CEO of SRV.
Enclosed SRV Group Interim Report.