Leikkipuiston keltaiset viivat

Financing and financial position

Source January-March 2024 Interim Report, published on 25 April 2024: 

Financial income and expenses amounted to EUR -0.7 (-2.5) million in January–March. Dividend and interest income amounted to EUR 0.6 (0.4) million, interest paid on derivatives and fair value changes amounted to EUR 0.7 (-0.1) million, and interest expenses were EUR -0.3 (-0.2) million, of which EUR 0.0 (0.2) million was capitalised as of the beginning of the year. In addition, financial expenses included EUR -1.4 (-1.4) million in interest on lease agreement debts under IFRS 16 and EUR -0.3 (-0.4) million in other financial expenses.  

SRV’s equity ratio was 33.9 (35.0) and gearing was 80.5 (82.2) per cent. Excluding the impact of IFRS 16, the equity ratio was 47.5 (49.2) per cent and gearing was 2.4 (4.1) per cent. Capital employed stood at EUR 280.5 (292.9) million and the return on investment was 3.1 (-3.6) at the end of the review period. Excluding the impact of IFRS 16, capital employed amounted to EUR 179.7 (188.3) million.  

Net interest-bearing debt totalled EUR 112.1 (117.4) million at the end of the review period. Net interest-bearing debt saw a year-on-year decrease of EUR 5.3 million. Excluding the impact of IFRS 16, net interest-bearing debt totalled EUR 3.5 (6.1) million, representing a decrease of EUR 2.7 million on the comparison period. Housing corporation loans accounted for EUR 16.5 (12.3) million of the interest-bearing debt.

EUR 10 million of the company's EUR 40 million committed revolving credit facility had been allocated as a committed overdraft facility by the end of the review period, and it remained unused at the end of the period. Of the remaining EUR 30 million, EUR 1 million was in use and EUR 29.0 million was unused.  

The company has EUR 21.1 million and EUR 36.0 million convertible hybrid bonds resulting from the financing arrangement implemented in June 2022. The coupon interest rate for the equity-like hybrid bonds is 4.875 per cent per annum.  The equity-like bonds have no maturity date, are unsecured and rank subordinate to other debt obligations. Convertibility of the hybrid bonds is structured such that the hybrid bond terms include a special right, as per the Companies Act, to convert the bonds into shares if the company does not redeem them before 30 June 2026. The hybrid bonds are recorded as equity in the balance sheet at the assumed market value (60% of nominal value) at the time of recognition, and their value in equity on the balance sheet as of 31 March 2024 was EUR 33.5 million.

At the end of the period, the Group’s financing reserves totalled EUR 68.2 (52.6) million, consisting of an undrawn committed revolving credit facility of EUR 29.0 million, an unused committed overdraft facility of EUR 10 million, cash and cash equivalents of EUR 29.2 million, and undrawn committed project financing amounting to EUR 0.0 million.  The change in financing reserves compared with 31 December 2023 was affected by EUR -8.8 (-16.8) million in cash flow from operating activities and investments as well as EUR -1.5 (4.2) million in cash flow from financing activities.

financing_reservesQ1_2024.jpegnet_interest-bearing_debt-excl-ifrs16_Q1_2024.jpeg

The financial covenants of SRV’s financing agreements are equity ratio, gearing, minimum operating margin, minimum liquidity, and certain other restrictions. The covenant levels of these financing agreements are determined on the basis of the accounting principles in force when the loan agreements were signed. Recognition of income on the basis of percentage of completion in developer contracting projects and the inclusion of capital loans into equity are taken into consideration in the calculation of the equity ratio covenant. The loan agreements also contain some other deviations from traditional covenant calculation methods. The main covenants of the financing agreements are presented in note 11 to the interim report.

After the review period, on 12 April the company agreed with the syndicate banks to exercise the one-year extension option of the current EUR 40 million committed revolving credit facility which is tied to sustainability targets as well as the replacement of the minimum EBITDA covenant with a net debt/EBITDA covenant that will be measured for the first time in June 2024. In accordance with the exercised extension option, the revolving credit facility is valid until April 2026.

SRV's investment commitments totalled EUR 19.6 (19.6) million at the end of the review period, and consisted of investments in Fennovoima and the Tampere Central Deck and Arena project.

Translation differences recognised in equity totalled EUR -4.9 (-14.8) million at the end of the review period. Translation differences relate to SRV’s only remaining asset in Russia, its 50 per cent holding in Pearl Plaza. 

Interim Report January – March 2024, 25 April 2024


Contact information

SRV head officePostal address:
P.O. BOX 555
FIN-02601 Espoo,
Finland

Visiting address:
Derby Business Park,
Tarvonsalmenkatu 15,
FIN-02600 Espoo
Finland

020 145 5200
info@srv.fi

Business ID - 1707186-8
© SRV Yhtiöt Oyj 2024