Source January–March 2025 Interim Report, published on 30 April 2025:
"Our business remained stable during the first quarter. Our revenue was down slightly year-on-year to EUR 161.4 million, and our operative operating profit amounted to EUR 1.1 million. Operative operating profit was negatively impacted by the lower volume than in the comparison period, particularly in business premises development projects sold to investors, while infrastructure construction achieved a better margin year-on-year.
As we had expected in the previous quarter, the market situation remained uncertain in the early months of the year, slowing down the development of our business. Due to low consumer and investor demand, we were not able to start our planned development projects in 2024, which has delayed the development of the company’s strategic project portfolio. That said, in the first quarter of this year, we took a step towards our strategic objective of increasing the share of our portfolio accounted for by developer-contracted housing construction when, in February, we launched the construction of our first residential property for sale to consumers after a pause of over two years, Asunto Oy Espoon Niittykummun Neuvokas. We also aim to launch other projects for sale to
consumers during this year in the Helsinki metropolitan area, Turku, Tampere and other locations.
Our order backlog remained robust and was EUR 1,042.6 million. In the first quarter, the projects transferred to our order backlog included a new building for child and adolescent psychiatry for Tampere University Hospital, the renovation of the Pasila Government Agency Centre, and the Nissniku House multipurpose building in Kirkkonummi, which is being carried out as a lifecycle project with SRV being responsible for project design, construction and property maintenance for 20 years. The total value of the Nissniku agreement for SRV, taking into account the lifecycle services, is approximately EUR 50 million; the order for construction work was recognised for February.
In addition, previously won contracts and projects under preliminary contracts that have not as yet been recognised in our order backlog totalled around EUR 582 million at the end of March. These include the Turku Ratapiha project and the next phases of the Helsinki Laakso Joint Hospital.
The company's balance sheet is in good shape, and the number of unsold, completed residential units remained low at the end of March. Our robust financial position is a strength in the uncertain market situation. Thanks to this strength, we can focus on the long-term development of the company and also seize any opportunities that emerge when the economic situation improves.
One of our major successes in the first months of the year was our double win in the “Safely in the 21st Century” occupational safety competition organised by the Confederation of Finnish Construction Industries RT, covering the Uusimaa region; we competed in the large construction company category. The combined result of TR measurements carried out by the Regional State Administrative Agency at SRV's construction sites was the best in the Uusimaa region. Furthermore, in the site-specific series, the Rajamäki campus site in Nurmijärvi was ranked as the best in TR measurements in the Uusimaa
region. This double win is a great recognition of our determined and systematic work in the development of occupational safety culture. I’m pleased with how the commitment to occupational safety at our company is evident all the way from management down to every construction site. We put this strong commitment into practice at our sites by anticipating safety risks, proactively making observations, correcting any deficiencies that are found, and, more broadly, engaging in good management and thereby maintaining high controllability.
At the moment, it is almost impossible to predict the development of the market situation. On the one hand, a number of traditionally strong indicators support an upward trend in housing and investment demand. On the other hand, the geopolitical situation and the threat of a trade war undermine consumer and investor confidence in the market and economic development. We expect that private demand will remain relatively weak in the first half of the year, although some positive developments, such as the strengthening of the sales volumes of old apartments, are already underway. The most positive segment of the market, public sector investment, will remain strong. We expect the positive change in the owner-occupied housing market to start gradually towards the end of the year, as the opportunities brought about by lower interest rates and lower inflation, as well as wage settlements and tax reductions, increase the ability and willingness to buy houses. A similar trend will be seen among housing and business premises investors as economic uncertainty eases."
Saku Sipola
President and CEO
SRV Group Plc