SRV’s financial statement release January-December 2022: Operative operating profit improved in challenging market situation, order backlog strengthened towards the end of the year


SRV’s financial statement release January-December 2022: Operative operating profit improved in challenging market situation, order backlog strengthened towards the end of the year

January-December 2022 in brief:

  • Revenue amounted to EUR 770.1 million (932.6 1–12/2021).
  • Operative operating profit amounted to EUR 18.9 (5.3) million.
  • Operating profit was EUR -76.4 (-1.7) million; write-downs of assets in Russia and the Fennovoima holding, the dissolution of profit margin eliminations, and the weakening of the rouble had a total impact of EUR -92.5 million.
  • The result before taxes was EUR -79.1 (-20.3) million. Write-downs and the weakening of the rouble had an impact of EUR -132.7 million and the financial arrangements an impact of EUR 38.6 million.
  • Cash flow from operating and investment activities totalled EUR -8.0 (76.2) million.
  • The comprehensive restructuring of financing carried out during the second quarter significantly strengthened equity and reduced net interest-bearing debt. Equity ratio rose to 36.3 (27.4) per cent and gearing declined to 55.1 (103.0) per cent. Excluding the impact of IFRS 16, the equity ratio was 48.2 (32.8) per cent and gearing was -7.5 (47.5) per cent. The equity ratio in accordance with the loan covenant calculation was 48.2 per cent.
  • At period-end, the order backlog stood at EUR 838.8 (872.3) million. New agreements valued at EUR 624.6 (588.6) million were signed in January–December. The sold share of the order backlog was 89.2 (91.5) per cent.
  • Earnings per share were EUR -6.62 (2.29). The share issues carried out during the review period, the effect of the subscription price of the new shares and the 40:1 reverse share split in July have been taken into consideration in the calculation of the key figure.

October–December 2022 in brief:

  • Revenue amounted to EUR 181.2 million (336.3 10–12/2021).
  • Operative operating profit amounted to EUR 0.2 (-4.6) million.
  • Operating profit was EUR -6.3 (-11.5) million.
  • Cash flow from operating and investment activities totalled EUR 4.6 (62.1) million.
  • New agreements valued at EUR 287.2 (160.7) million were entered into the order backlog.

Outlook for 2023:

During 2023, SRV's revenue and result will be affected by several factors in addition to general economic trends, such as: the timing and amount of income recognition for SRV's own projects, which are recognised as income upon delivery; the margin of the order backlog and its development; the start-up of new contracts and development projects; the war that Russia started against Ukraine, including its related direct and indirect effects, such as material costs and the availability of materials and labour; and changes in demand. Higher interest rates and inflation have a negative impact on demand for housing and business premises among consumers and investors, and thus pose uncertainty with respect to the estimated start-ups of new projects. Revenue in 2023 will mainly be generated by cooperative contracting as well as development projects sold to investors. At the beginning of the year, the order backlog will focus strongly on cooperative contracting, which involves fewer risks but lower margins, due to which the largest share of earnings in 2023 is expected to be generated in the latter part of the year. In 2023, the share of revenue accounted for by developer-contracted housing production will remain small.

  • Consolidated revenue for 2023 is expected to decrease compared to 2022 (revenue in 2022: EUR 770.1 million).
  • Operative operating profit is expected to be positive, but lower than the operative operating profit for 2022 (operative operating profit in 2022: EUR 18.9 million).

Events after the end of the review period:

  • SRV announced on 2 February 2023 that the company will set new long-term financial objectives that it aims to achieve by the end of 2026:
  • Operative operating profit: 6%
  • Revenue: EUR 900 million
  • The objective is to distribute a dividend equalling 30-50 per cent of the annual result, while taking into account the outlook and capital needs of the company
  • On 2 February 2023 SRV announced remuneration paid out from the one-off long-term incentive plan 2021-2022 and discontinuations of the President & CEO's share-based incentive plan 2019-2026 and the long-term incentive plan 2021-2025.

CEO's review

”2022 was a very exceptional year, as the market environment was hit by multiple dramatic upheavals. Russia’s war of aggression against Ukraine led us to write down our assets in Russia. Our most important achievement during the past year was the extensive financing arrangement we carried out in the second quarter, which substantially strengthened our balance sheet. Thanks to these changes, we are a practically net debt-free Finnish construction company.

In addition to our successful financing arrangement, we have managed to significantly improve the controllability of our projects, creating confidence in the future. All in all, we performed well in a tough inflationary environment and safeguarded our profitability – we can be reasonably satisfied with our result for 2022, especially considering the structure of the project portfolio. The long decline in our order backlog also came to an end during the last quarter when the Eastern Uusimaa Main Police Station and Prison as well as the new ward building at Jorvi Hospital were entered into the backlog. We expect that previously won contracts and projects under preliminary contracts will be recognised in our order backlog in the first months of the year, with a value of around EUR 1.2 billion. Furthermore, during the last quarter and after the end of the review period, we won new projects that have as yet not been entered into the order backlog.

The inflation accelerated by Russia’s invasion of Ukraine, the consequent rapid rise in interest rates, the further slump in consumer confidence and greater cautiousness among investors significantly slowed down demand and the development of the structure of our project portfolio. We have systematically developed our capabilities to restructure our portfolio and have projects that we can go ahead with quickly when demand recovers.

As we did not achieve the sought-after growth in developer-contracted housing construction in 2022, the number of unsold residential units that have been completed and under construction remains low. This is positive in view of prevailing demand. At the end of December, 23 completed residential units were unsold. We estimate that housing demand will be weak in all customer segments at the beginning of 2023.

Real estate investors are also cautious about business premises. At the same time, the public sector is making relatively large investments. In our view, investment demand in industry has also become more active; in this sector, too, the implementation of investments is shifting over to modern cooperative contract forms, in which we hold a strong market position.

As a result of lower demand, the decrease in revenue and the small share of our portfolio structure accounted for by developer-contracted and development projects will be evident in the current year as weakening profitability. On the other hand, our volume of project management and alliance contracting-focused business construction – involving fewer risks, but lower margins – will carry the company over 2023, which will be a difficult year.

Our outlays on the lifecycle wisdom of the projects we build is at the heart of our strategy. This is based on our environmentally friendly material choices, energy and resource efficiency, use of renewable energy, taking the environment into consideration through materials recycling, our biodiversity targets and the fact that all our construction sites have net-zero emissions. For instance, of the projects completed during the review period, the design and technical building systems of the Vantaan Pressi B building – business premises owned by Julius Tallberg Real Estate Corporation in Vantaankoski – emphasised energy-efficiency and lifecycle wisdom.

During the review period, we continued to make progress towards our goal of exiting Russia and in November were able to sell our holding in the Okhta Mall shopping centre in St Petersburg. After its sale, we are still a co-owner in two Russian shopping centres through associated companies and also own a plot in the country. We are actively continuing to engage in negotiations in order to completely exit our business in Russia.

On the date of the publication of the interim report, we announced that we are updating our long-term financial objectives. The long-term financial objectives that we seek to achieve by the end of 2026 are operative operating profit of 6 per cent and revenue of EUR 900 million. The objective is to also distribute a dividend equalling 30-50 per cent of the annual result, while taking into account the outlook and capital needs of the company. We believe that it is possible for us to reach the six per cent objective set for operative operating profit. The achievement of the objective calls for strong growth, successful project development and changes to our portfolio in the years ahead. During the past few years, we have bolstered our project development throughout the organisation. The most recent step was the appointment of Hannu Lokka as Executive Vice President, Strategic Project Development and a member of the Corporate Executive Team in December. He stepped into his position on 16 January as the successor of Timo Nieminen.

In November-December, we carried out change negotiations under the Act on Co-operation within Undertakings with a view to adjusting our cost structure and number of personnel to current market demand. The personnel cuts and layoffs made as a result of the negotiations are part of adjustment measures – in combination with our other measures – with which we are seeking a total of EUR 6-8 million in cost savings in 2023.

We expect that the beginning of 2023 will be a challenging period in terms of demand. Thanks to our strong progress in our lifecycle-wise strategy, the improvement of the controllability of our projects, the relatively risk-free structure of our project portfolio and our stronger project development portfolio, we are well-poised to face market difficulties and build future profitable growth.

I would like to thank our shareholders, customers, partners and personnel for the past year!”

Saku Sipola, President & CEO


Overall review

Group key figures                   1-12/1-12/change,10-12/10-12/
(IFRS, EUR million)20222021change%20222021
Other operations and eliminations13.8-4.418.2-0.1-0.2
Operative operating profit 1)18.95.313.6256.90.2-4.6
Other operations and eliminations-4.9-4.3-0.6-1.3-1.5
Operative operating profit, %
Operating profit-76.4-1.7-74.7-6.3-11.5
Other operations and eliminations9.7-4.313.9-1.3-1.5
Operating profit, %-9.9-0.2-3.5-3.4
Financial income and expenses, total-2.7-18.616.0-3.8-8.1
Profit before taxes-79.1-20.3-58.7-10.0-19.6
Net profit for the period-85.7-19.9-65.8-8.9-19.5
Net profit for the period, %-11.1-2.1-4.9-5.8
Order backlog (unrecognised) 2)838.8872.3-33.5-3.8
New agreements624.6588.635.96.1287.2160.7
  1. The reconciliation calculation for operative operating profit can be found underneath the “Key figures” table.
  2. The Group’s order backlog consists of the Construction business.
Group key figures                   1-12/1-12/change,
(IFRS, EUR million)20222021change,%
Equity ratio, %36.327.4
Equity ratio, %, excl. IFRS 16 1)48.232.8
Net interest-bearing debt80.5170.0-89.5-52.6
Net interest-bearing debt, excl. IFRS 16 1)-11.581.0-92.4-114.2
Net gearing ratio, %55.1103.0
Net gearing ratio, %, excl. IFRS 16 1)-7.547.5
Return on investment, %-7.8-0.6
Capital employed272.0403.0-131.0-32.5
Other operations and eliminations48.740.08.721.8
Capital employed, excl. IFRS 16 1)186.4319.4-133.0-41.6
Return on equity, %-50.0-11.5
Earnings per share, EUR2)-6.6-2.3-3.7-187.8
Share price at end of period2)3.8014.8-11.0-74.3
Weighted number of shares at end of period, millions 2)13.29.4
  1. The figure has been adjusted to remove the impacts of IFRS 16.
  2. The key figure has been adjusted for the share issue and the reverse share split in July 2022.


Earnings trends for the segments

Construction January-December 2022

Construction’s revenue declined to EUR 746.3 million (930.1 1-12/2021). Revenue declined in both housing and business construction. The decline in housing construction was affected particularly by the recognition of the Redi Loisto tower building as income in the comparison period. Revenue from business construction was down particularly in development projects, in which the revenue for the comparison period was increased by the construction of the Tampere Arena.

Construction’s operating profit rose to EUR 23.3 (14.1) million. The Construction segment’s operating profit improved in both housing and business construction. The higher volume of housing contracting carried out as development projects contributed to growth in housing construction. The margin in business construction improved in spite of the decline in volume. In addition, the comparison period was burdened by the losses of the Tampere Arena project.

Construction’s order backlog stood at EUR 838.8 (872.3) million and 89.2 (91.5) per cent of the order backlog has been sold. New agreements valued at EUR 624.6 (588.6) million were recognised in the order backlog in January–December.

Construction’s capital employed totalled EUR 212.4 million (195.8 12/2021).

Construction October-December 2022

Revenue from construction totalled EUR 180.4 (335.8) million.

Operating profit was EUR 2.3 (-1.3) million. Construction’s operating profit improved in spite of the decrease in volume and the low amount of developer-contracted housing production. The comparison period for business construction was burdened by the losses of the Tampere Arena project.

New agreements valued at EUR 287.2 (160.7) million were entered into the order backlog.

Investments January-December 2022

Investments’ revenue was EUR 9.9 (6.8) million.

Investments’ operative operating profit amounted to EUR 0.5 (-4.6) million, affected by capital gains from the sale of a commercial centre in Porvoo.

Investments’ operating profit was EUR -109.3 (-11.6) million. Operating profit was impacted by substantial write-downs of assets in Russia and the Fennovoima holding, which had a total impact of EUR -92.5 million. After the write-downs, the total value of SRV’s holdings in Russia amounts to EUR 3.0 million. In addition, operating profit was affected by the net impact of the change in the exchange rate of the rouble, which was recognised prior to the asset write-downs and amounted to EUR 7.3 (1.5) million. The exchange rate impact, which largely had no effect on cash flow, was caused by the valuation of the euro-denominated loans of Russian associated companies in roubles, currency hedging expenses and changes in the market value of currency hedges. Operating profit was improved in July–September by the sale of a plot in Russia valued at EUR 1.8 million. The plot had been previously written down during the review period. In November 2022, SRV sold its holding in the Okhta Mall shopping centre in Russia for EUR 4.3 million. Profits from the disposal of assets in Russia totalled EUR 6.3 million. The transaction had no impact on operative operating profit. In addition, impairment of EUR -2.3 million was recognised on the Tampere Central Deck and Arena investment in Q4.

Capital employed totalled EUR 10.9 million (167.3 12/2021). Capital employed decreased due to write-downs of Russia-related investments. The amount of capital employed remaining in Russia was EUR 3.0 million. The remainder of capital employed mainly comprises investments in the Tampere Central Deck and Arena project.

The return on investment was -118.3 (-8.1) per cent. Return on investment was impacted primarily by write-downs of assets in Russia.

Espoo, 2 February 2023

Board of Directors

All forward-looking statements in this review are based on management’s current expectations and beliefs about future events. The company’s actual results and financial position may differ materially from the expectations and beliefs such statements contain due to a number of factors that have been presented in this interim report.

Briefing, webcast and presentation materials

A briefing for analysts, fund managers, investors and media representatives will be held on 2 February 2023, starting at 11:00 EET as a webcast. The webcast can be followed live at The recording will be available on the website after the presentation. The materials will also be made available on the website.

For further information, please contact:

Saku Sipola, President & CEO, tel. +358 (0)40 551 5953,
Jarkko Rantala, CFO, tel. +358 (0)40 674 1949,
Miia Eloranta, Senior Vice President, Communications and Marketing, tel. +358 (0)50 441 4221,  


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SRV in brief

SRV is a Finnish developer and innovator in the construction industry. We are building a more sustainable and responsible urban environment that fosters economic value and takes into consideration the wellbeing of both the environment and people. We call this approach lifecycle wisdom. Our genuine engagement and enthusiasm for our work comes across in every encounter – and listening is one of our most important ways of working. We believe that the only way to change the world is through discussion.

Our company, established in 1987, is listed on the Helsinki Stock Exchange. We operate in growth centres in Finland. In 2021, our revenue totalled EUR 932.6 million. In addition to about 1,000 SRV employees, we have a network of around 3,600 partners.

SRV – Building for life

Contact information

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

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

020 145 5200

Business ID - 1707186-8
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