SRV’s interim report January-September 2022: Positive development in operative operating profit


SRV’s interim report January-September 2022: Positive development in operative operating profit   

January–September 2022 in brief:  

  • Revenue amounted to EUR 588.9 million (596.3 1–9/2021).  
  • Operative operating profit amounted to EUR 18.7 (9.9) million.  
  • Operating profit was EUR -70.1 (9.8) million. Write-downs of assets in Russia and the Fennovoima holding, the dissolution of profit margin eliminations, and the strengthening of the rouble had a total impact of EUR -91.2 million. 
  • The result before taxes was EUR -69.1 (-0.8) million. Write-downs and the strengthening of the rouble had an impact of EUR -127.9 million and the financial arrangements an impact of EUR 38.6 million. 
  • Cash flow from operating and investment activities totalled EUR -12.7 (14.0) 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 (27.0) per cent and gearing declined to 59.3 (147.5) per cent. Excluding the impact of IFRS 16, the equity ratio was 48.6 (34.0) per cent and gearing was -5.4 (75.5) per cent. The equity ratio in accordance with the loan covenant calculation was 48.6 per cent. 
  • At period-end, the order backlog stood at EUR 717.1 (1,038.2) million. New agreements valued at EUR 337.3 (427.9) million were signed in January–September. The sold share of the order backlog was 87.8 (92.1) per cent. 
  • Earnings per share were EUR -6.51 (-0.20). 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. 

July–September 2022 in brief: 

  • Revenue amounted to EUR 186.8 million (191.1 7–9/2021).  
  • Operative operating profit amounted to EUR 3.9 (-0.6) million.  
  • Operating profit was EUR 5.5 (-1.6) million. 
  • Cash flow from operating and investment activities totalled EUR 4.5 (10.2) million. 
  • New agreements valued at EUR 135.0 (166.6) million were entered into the order backlog

Updated outlook for 2022: 

  • Consolidated revenue for 2022 is expected to amount to EUR 770–820 million (earlier outlook: EUR 800-860 million) (revenue in 2021: EUR 932.6 million).  
  • Operative operating profit for 2022 is expected to amount to EUR 17-23 million (earlier outlook: EUR 15–25 million) (operative operating profit in 2021: EUR 5.3 million) 

Events after the end of the review period:  

On 27 October 2022 SRV announced initiating change negotiations in accordance with the co-operation act. The aim of the negotiations is to adjust the company's cost structure and number of personnel to meet the demand on the current market situation. 

The negotiations concern approximately 500 people. SRV currently employs approximately 870 people. The estimated need for permanent personnel reductions is 45 person-years at most. In addition to this, layoffs are evaluated as a means of adaptation in the negotiations, which ensure sufficient flexibility in case of changes in the market situation.

CEO’s review

Our most significant achievement during the past year was the extensive financing arrangement we carried out in the second quarter, thanks to which our balance sheet is healthy and we are virtually net debt-free. Now that our balance sheet is healthy again, we are in a stronger position to face the more challenging market and have been able to fully focus on the development of our operational business. In spite of the challenges in our operating environment, our operative operating profit developed positively. Our result is based on successfully keeping inflation under control, ensuring the availability of materials, and longer-term improvement in the controllability of projects.  

Following the financing arrangement carried out in the spring, our balance sheet is strong, we are net debt-free and we no longer have Russia-related balance sheet risks. In addition, the number of unsold residential units that have been completed and are under construction remains low. At the end of September, 26 completed residential units were unsold. Our efforts to pursue growth in developer-contracted housing construction have stopped, as we have postponed the startup of certain developer-contracted housing projects due to inflation and weaker demand. In this business environment, our clear advantage is that our order backlog is on a healthy footing with relatively low risks. 

Our order backlog still fell short of the comparison period and amounted to EUR 717.1 million. Projects won earlier valued at about EUR 131.2 million were recorded in the order backlog during the review period, comprising the Oulu Central Police Station and Prison as well as Kokardi, a developer-contracted housing project to be built in Pasila, Helsinki. The development phases of the projects we have won earlier and which have not as yet been entered in the order backlog have progressed well in the early autumn. We expect these projects to generate a growing inflow of orders in the fourth quarter and partly in early 2023. At the end of the review period such projects still amounted to about EUR 1.3 billion and they largely comprise relatively low-risk cooperative business premises contracts.  
One of our successes in the review period was the completion of Lumo One in August. It is the third residential tower in Kalasatama, Helsinki. The project was handed over to the customer in phases during the summer and the last residents moved into the tower building in August. Phased handover was important to our customer. Our good and proactive cooperation with the Helsinki City Building Control Department contributed significantly to our success in this. Construction of the fourth Kalasatama tower building, Visio, is progressing on schedule; it reached its full height in September and will be completed at the end of 2023. In line with the original plans, Kalasatama is developing into an urban and appealing environment where services and smooth public transport comprise a natural and important part of working and living. We believe that the construction of the Kalasatama towers will continue, with all eight being completed by the end of 2027. We aim to start up the next buildings in the months ahead.  


Our lifecycle-wise strategy has been evident in many of our operations during the past review period. Our most significant outlays in lifecycle-wise focus on the lifecycle wisdom of the projects we build. In addition, we have also developed our own construction operations, with our sites reaching net zero emissions as from the beginning of the year. Based on the feedback we received, this has succeeded in creating value for our customers as well. We cannot yet eliminate all emissions – we have achieved net zero emissions by compensating for the remaining emissions by planting trees to serve as carbon sinks. Thanks to our development efforts, SRV’s emissions have decreased 85 per cent year-on-year. We have responded to the ongoing energy crisis by seeking to reduce our energy consumption, harnessing strongly renewable sources of energy like geothermal heat during construction, and scheduling electricity consumption for off-peak times, which impact both on our energy costs and the security of supply of society as a whole.   
We expect that market conditions will become more difficult. We anticipate that inflation, growing interest rates and weakening consumer confidence will cut into demand at least during the winter ahead. However, we predict that contracts and projects under preliminary contracts that we have won earlier will be recorded in our order backlog during the next six months. In housing construction, our volume will decline going forward into the next year. Today we announced initiating change negotiations in accordance with the co-operation act. Our aim is to adjust our cost structure and number of personnel to meet the demand of the current market situation. 


At a later date, we will reassess our long-term financial objectives and will consider restructuring our segments after our exit from Russia. We are actively continuing negotiations aimed at exiting.  
I am satisfied and pleased that we have taken great strides forward in matters under our control and are heading in the right direction. I would like to thank our shareholders, customers and other partners and our personnel for the quarter now ended!” 

Saku Sipola, President & CEO 

Overall review

Group key figures                   1-9/1-9/change,7-9/7-9/1-12/Previous
(IFRS, EUR million)20222021change%20222021202112 mo.
Other operations and eliminations14-4,218,2-0,3-1,1-4,413,8
Operative operating profit 1)18,79,98,888,93,9-0,65,314,1
Other operations and eliminations-3,6-2,7-0,9-1,2-0,6-4,3-5,1
Operative operating profit, %3,21,72,1-0,30,61,5
Operating profit-70,19,8-79,9-8165,5-1,6-1,7-81,6
Other operations and eliminations11-2,713,7-1,2-0,6-4,39,4
Operating profit, %-11,91,62,9-0,8-0,2-8,8
Financial income and expenses, total1,1-10,611,70,3-2,8-18,6-7
Profit before taxes-69,1-0,8-68,35,8-4,4-20,3-88,6
Net profit for the period-76,7-0,4-76,35,3-4-19,9-96,2
Net profit for the period, %-13-0,12,9-2,1-2,1-10,4
Order backlog (unrecognised) 2)717,11 038,20-321,1-30,9872,3
New agreements337,3427,9-90,6-21,2135166,6588,6498,1
  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                   1-9/1-9/change,1-12/
(IFRS, EUR million)20222021change,%2021
Equity ratio, %36,32727,4
Equity ratio, %, excl. IFRS 16 1)48,63432,8
Net interest-bearing debt86,4269-182,6-67,9170
Net interest-bearing debt, excl. IFRS 16 1)-8,2142,1-150,3-105,881
Net gearing ratio, %59,3147,5103
Net gearing ratio, %, excl. IFRS 16 1)-5,475,547,5
Return on investment, %-9,63,4-0,6
Capital employed273,9502,4-228,6-45,5403
Other operations and eliminations56,6-64,2120,8-188,340
Capital employed, excl. IFRS 16 1)185,4381,5-196,1-51,4319,4
Return on equity, %-65,8-0,3-11,5
Earnings per share, EUR2)-6,51-0,2-6,313155-2,29
Share price at end of period2)3,5216,1-12,58-78,114,8
Weighted number of shares at end of period, millions 2)12,09,49,4
  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.

Earnings trends for the segments

Construction January–September 2022

Construction’s revenue declined to EUR 565.9 million (594.3 1-9/2021). Revenue from housing construction increased thanks to growth in contracting carried out as development projects. Revenue from business premises contracting declined.

Construction’s operating profit rose to EUR 21.0 (15.4) million. The Construction segment’s operating profit improved thanks to both housing and business construction. The higher volume of housing contracting carried out as development projects contributed to growth in housing construction. The margin recognised for business construction improved in spite of the decrease in volume. The comparison period was burdened by the losses of the Tampere Arena project.

Construction’s order backlog stood at EUR 717.1 (1,038.2) million and 87.8 (92.1) per cent of the order backlog has been sold. New agreements valued at EUR 337.3 (427.9) million were recognised in the order backlog in January–September.

Construction’s capital employed totalled EUR 203.1 million (195.8 12/2021).

Construction July–September 2022

Revenue from construction totalled EUR 183.9 (188.0) million.

Operating profit was EUR 4.7 (1.6) million. The Construction segment’s operating profit improved thanks to both housing and business construction. The improvement in housing construction was largely thanks to the recognition of two developer-contracted housing projects as income. The comparison period for business construction was burdened by the losses of the Tampere Arena project. New agreements valued at EUR 135.0 (166.6) million were entered into the order backlog.


Investments January–September 2022

Investments’ revenue was EUR 9.1 (6.2) million.

Investments’ operative operating profit amounted to EUR 1.3 (-2.8) million, affected by capital gains from the sale of a commercial centre in Porvoo.

Investments’ operating profit was EUR -102.1 (-2.9) million. Operating profit was impacted by substantial write-downs of assets in Russia and the Fennovoima holding, which had a total impact of EUR -115.8 million. After the write-downs, the total value of SRV’s holdings in Russia amounts to EUR 4.0 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 10.1 (1.3) million. The exchange rate impact, which largely had no effect on cash flow, was caused by the valuation of the euro-denominated loans of 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.

Capital employed totalled EUR 14.1 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 4.0 million. The remainder of capital employed mainly comprises investments in the Tampere Central Deck and Arena project.

The return on investment was -139.7 (0.8) per cent. Return on investment was impacted primarily by write-downs of assets in Russia.

Updated outlook for 2022

During 2022, 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. The impacts of the coronavirus pandemic have been moderate on the whole, but its effects on the construction market remain unclear and cause uncertainty regarding the outlook for the future. Revenue in 2022 will mainly be generated by cooperative contracting and development projects sold to investors. In 2022, the share of revenue accounted for by developer-contracted housing production will remain relatively small.

  • Consolidated revenue for 2022 is expected to amount to EUR 770–820 million (earlier outlook: EUR 800-860 million) (revenue in 2021: EUR 932.6 million).
  • Operative operating profit for 2022 is expected to amount to EUR 17-23 million (earlier outlook: EUR 15–25 million) (operative operating profit in 2021: EUR 5.3 million)

Espoo, 27 October 2022

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.

Financial results briefing

A briefing for analysts, fund managers, investors and media representatives will be held on 27 October 2022, starting at 11:00 EEST as a webcast. The event will be held in Finnish. The webcast can be followed live at The presentation will be available on the company's 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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