Profit warning: SRV Group Plc lowers its operative operating profit guidance for 2019
SRV GROUP PLC INSIDE INFORMATION 10 OCTOBER 2019 15.35 EET
Profit warning: SRV Group Plc lowers its operative operating profit guidance for 2019
SRV Group Plc specifies its outlook and changes its guidance for 2019. The company estimates that its operating profit for 2019 will be at loss due to impairments concerning investments in Russia, and decreasing margins in certain projects, such as higher than anticipated additional costs resulting from the delay in REDI Majakka residential tower.
The new guidance is:
- More developer-contracted housing units will be completed in 2019 than in the comparison period. It is estimated that a total of 809 developer-contracted housing units will be completed in 2019 (526 in 2018).
- SRV makes long-term procurement agreements, due to which the expected reduction in construction costs will not have a significant effect on the company’s earnings performance in 2019. The trend in rental income from shopping centres is positive, but slower than anticipated.
- Full-year consolidated revenue for 2019 is expected to grow compared with 2018 (revenue in 2018: EUR 959.7 million). Operative operating profit is expected to be at loss (operative operating profit in 2018: EUR -10.0 million).
The earlier guidance, issued on 17 July 2019 was:
- More developer-contracted housing units will be completed in 2019 than in the comparison period. It is estimated that a total of 809 developer-contracted housing units will be completed in 2019 (526 in 2018).
- SRV makes long-term procurement agreements, due to which the expected reduction in construction costs will not have a significant effect on the company’s earnings performance in 2019. The trend in rental income from shopping centres is positive, but slower than anticipated.
- Full-year consolidated revenue for 2019 is expected to grow compared with 2018 (revenue in 2018: EUR 959.7 million). Operative operating profit is expected to improve compared with 2018 and to be positive (operative operating profit EUR -10.0 million), but to fall short of 2017 (operative operating profit in 2017: EUR 27 million).
SRV Group Plc will publish its January – September interim report on Thursday 31 October 2019.
For further information, please contact:
Ilkka Pitkänen, CFO, +358 40 667 0906, ilkka.pitkanen@srv.fi
Distribution:
Nasdaq Helsinki
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SRV – Building for life
SRV in brief
SRV is a bold developer and innovator in the construction industry. We want to offer the best customer experience as a constructor of urban city centres, while also being the most attractive employer in the industry. Our genuine cooperation and enthusiasm for our work comes across in every encounter. Sustainability is reflected in all our activities.
Established in 1987, we are a publicly listed company since 2007 in Helsinki Nasdaq stock exchange that operates in growth centres in Finland and Russia. Our revenue in 2018 was EUR 960 million. Over 1,000 people work for us and we employ a network of almost 4,000 subcontractors in our projects.