Source January-September 2023 Interim Report, published on 26 October 2023:
Financial income and expenses amounted to EUR -6.5 (1.1) million in January–September. Net financial expenses included EUR 1.4 (0.9) million in dividend and interest income, exchange rate differences amounting to EUR -2.6 (5.0) million arising from the conversion of subsidiary and associated company loans, which did not have an impact on cash flow, interest paid on derivatives and fair value changes amounting to EUR 0.5 (5.8) million, and interest expenses of EUR -0.8 (-5.4) million, of which EUR 0.6 (0.9) million was capitalised as of the beginning of the year. In addition, financial expenses included EUR -4.2 (-3.4) million in interest on lease agreement debts under IFRS 16 and EUR -1.5 (-0.1) million in other financial expenses.
Financial income and expenses amounted to EUR -1.6 (0.3) million in July-September. Net financial expenses included EUR 0.5 (0.2) million in dividend and interest income, exchange rate differences amounting to EUR -0.5 (-0.5) million arising from the conversion of subsidiary and associated company loans, which did not have an impact on cash flow, interest paid on derivatives and fair value changes amounting to EUR 0.0 (3.7) million, and interest expenses of EUR -0.2 (-1.4) million, of which EUR 0.2 (0.4) million was capitalised. In addition, financial expenses included EUR -1.4 (-1.2) million in interest on lease agreement debts under IFRS 16 and EUR -0.2 (-0.8) million in other financial expenses.
The equity ratio was 34.9 (36.3) and gearing was 84.8 (59.3) per cent. Excluding the impact of IFRS 16, the equity ratio was 49.5 (48.6) per cent and gearing was 5.1 (-5.4) per cent.
Capital employed stood at EUR 281.3 (273.9) million and the return on investment was -5.4 (-9.6) at the end of the review period. Excluding the impact of IFRS 16, capital employed amounted to EUR 178.4 (185.4) million. Net interest-bearing debt totalled EUR 117.7 (86.4) million at the end of the review period. Net interest-bearing debt saw year-on-year growth of EUR 31.3 million. Excluding the impact of IFRS 16, net interest-bearing debt totalled EUR 7.5 (-8.2) million, representing a rise of EUR 15.7 million on the comparison period. Housing corporation loans accounted for EUR 15.9 (7.1) million of the interest-bearing debt.
On 26 April, with the syndicate banks, the company agreed on and implemented the replacement of the earlier EUR 30 million committed revolving credit facility, EUR 40 million committed project financing facility and EUR 63 million non-committed project financing facility with a new EUR 40 million committed revolving credit facility. The earlier EUR 40 million committed project financing facility and EUR 63 million non-committed project financing facility are being discontinued, and going forward project financing will be negotiated bilaterally with banks in accordance with normal market practices.
The interest margin of the new revolving credit facility is tied to three of SRV’s key sustainability objectives: carbon dioxide emissions from the operations of the company and its partner network and the lost time injury frequency (LTIF). The new committed revolving credit facility is valid until April 2025 and includes a one-year extension option.
EUR 10 million of the company's new 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.
At the end of the period, the Group’s financing reserves totalled EUR 63.9 million (61.8), 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 24.9 million, and undrawn committed project financing amounting to EUR 0.0 million. Financing reserves were affected by EUR -13.6 (-12.7) million in cash flow from operating activities and investments, EUR -6.3 (-15.0) million in cash flow from financing activities, and an increase of EUR 10 million in the committed revolving credit facility from EUR 30 million to EUR 40 million.
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.
SRV's investment commitments totalled EUR 19.6 (19.7) million at the end of the review period, and consisted of investments in Fennovoima and the Tampere Central Deck and Arena project. SRV was exposed to changes in the exchange rate of the rouble through its Russian subsidiaries, associated companies and joint ventures. As a result of write-downs of Russian holdings in 2022, and the sale in August 2023, the currency risk position has decreased considerably. The change in translation differences that impacted the comprehensive result and shareholders’ equity totalled EUR 10.0 million, of which EUR 9.3 million consisted of translation differences that were recognised in income in conjunction with the divestment of SRV Russia Oy. Translation differences recognised in equity totalled EUR -4.9 (-24.2) million at the end of the review period.
Interim Report January – September 2023, 26 October 2023