Outlook for 2017
In addition to general economic trends, SRV’s revenue and result in 2017 will be affected by several factors, such as: the trend in the exchange rate of the rouble; the recognition as income upon delivery of SRV’s own projects; the part of the order backlog that is continuously recognised as income consisting mainly of lowmargin contracting; trends in the order backlog’s profit margins; the sales volume of developer-contracted housing and the completion schedules of the properties; and the launch of new contracts and owndevelopment projects. SRV's largest project is the REDI project in Kalasatama.
Although developer-contracted housing will be completed on a steadier schedule in 2017 than in 2016, a significant part of operating profit will be made in the second half of the year. Based on current schedules, SRV estimates that a total of 816 developer-contracted housing units will be completed during 2017.
Full-year consolidated revenue for 2017 is expected to grow compared with 2016 (revenue EUR 884 million). If the rouble exchange rate remains at the level prevailing at the end of the second quarter of 2017, operating profit is expected to weaken, but operative operating profit to improve, compared with 2016 (operating profit EUR 27.7 million and operative operating profit EUR 26.3 million). However, our strategic target for profitability will only be reached towards the end of the strategic period, in 2019–2020.
The operating currency of all of SRV’s subsidiaries and associated companies in Russia was changed to the rouble during 2016. This accounting change makes SRV more susceptible to fluctuations in the rouble exchange rate and may impact on full-year operating profit.
Q3/2017 Interim Report
Published 26 October 2017