SRV GROUP PLC INTERIM REPORT 23 OCTOBER 2025 AT 08.30 EEST
SRV Interim Report 1-9/2025: Revenue and operative operating profit down -
financial reserves strengthen further
July - September 2025 in brief:
· Revenue decreased to EUR 159.7 (183.5) million (-13.0 %). Revenue was down
in both business construction and housing construction.
· Operative operating profit amounted to EUR 1.3 (4.5) million.Operative
operating profit was weakened by the year-on-year decline in volumes, and the
fact that revenue was recognised almost exclusively from contracting. During the
quarter, infrastructure construction once again achieved a better margin than in
the comparison period.
· Operating profit was EUR 1.3 (4.5) million. The result before taxes was EUR
-1.6 (1.7) million.
· Equity ratio was 34.6 (34.5 9/2024) per cent and gearing was 64.7 (69.7
9/2024) per cent. Excluding the impact of IFRS 16, the equity ratio was 50.7
(48.2) per cent and gearing was -17.3 (-6.0) per cent.
· Financing reserves totalled EUR 106.9 (79.1 9/2024) million.
· At period-end, the order backlog stood at EUR 931.3 (1,179.6) million. The
sold share of the order backlog was 90.9 (93.5) per cent. New agreements valued
at EUR 150.1 (273.9) million were signed in July - September.
· In addition, the order backlog for service periods in lifecycle projects
amounted to EUR 104 million.
· The B2B customer NPS (net promoter score) was 72 (74) at the end of
September.
January - September 2025 in brief:
· Revenue was EUR 489.9 (536.7) million (-8.7%)
· Operative operating profit amounted to EUR 3.2 (7.3) million with an
operating profit of EUR 2.8 (7.3) million.
· The result before taxes was EUR -3.4 (2.3) million.
· Earnings per share were EUR -0.2 (-0.0).
· New agreements valued at EUR 328.7 (625.2) million were signed in January -
September.
Outlook for 2025 (specified)
During 2025, SRV's revenue and result will be affected by several factors in
addition to general economic trends, such as: the margin of the order backlog
and its development; the start-up of new contracts and development projects;
geopolitical risks, including their related direct and indirect effects, such as
material costs and the availability of materials and labour; and changes in
demand. At the beginning of the year, private demand for new construction is
very low in several segments. For this reason, there is significant uncertainty
about the startup of new projects and their estimated revenue and margin
accrual.
In 2025, revenue will mainly consist of relatively low-margin - yet also low
-risk - cooperative contracting and, to a lesser extent, of competitive and
negotiated contracts. The share accounted for by development projects sold to
investors will remain low. The share of revenue accounted for by developer
-contracted housing production will be very slight in 2025, as no new developer
-contracted projects will be completed during the year.
· Full-year consolidated revenue for 2025 is expected to decline compared with
2024 and to amount to EUR 650-680 million (revenue in 2024: EUR 745.8 million)
(previously: EUR 630-680 million).
· Operative operating profit is expected to be positive (operative operating
profit in 2024: EUR 10.3 million).
President & CEO's review
“In the third quarter, business volumes remained low due to weak investor and
consumer demand. Our revenue was down 13 per cent year-on-year to EUR 159.7
million and operative operating profit declined to EUR 1.3 million. Operative
operating profit was weakened not only by the year-on-year decline in volumes,
but also by the fact that revenue was generated almost exclusively by
contracting, which has a lower margin than developed and developer-contracted
construction. During the quarter, infrastructure construction once again
achieved a stronger margin than in the comparison period. Although the result is
in line with our expectations in this market situation, it cannot be considered
satisfactory. However, we will survive the recession, supported by strong
contracting revenue. At the same time, we are preparing for growth in
construction based on our own project development, where we see significant
opportunities to strengthen profitability.
Our order backlog remained on a par with the previous quarter and stood at EUR
931 million at the end of September. Projects recognised in our order backlog
during the review period included the extension of the Myllypuro health and well
-being centre, seven apartment buildings and two parking facilities to be built
for the City of Helsinki in Maunula, and the completion of the Market Square
Hotel in Oulu. The contracts for the completion of the Market Square Hotel were
signed in September, and thus we were able to start up the finishing works for
the hotel's operator Scandic and owner Balder.
In addition, SRV has projects valued at about EUR 1.1 billion that have been won
or committed to with preliminary or development agreements, but which have not
yet been entered into the order backlog. These include the Turku Ratapiha
project, the next phases of the Helsinki Laakso Joint Hospital and the final
phase of the Tampere University Hospital renewal programme construction project,
next to which we are currently building a new building for child and adolescent
psychiatry. SRV was selected for the development phase of the renewal programme
in September. If realised, SRV's share of the cooperative project management
contract would amount to an estimated total of about EUR 600 million, which
would be recognised in SRV's order backlog as contractor agreements are signed
for the different phases over the years 2025-2032. The project would not tie up
SRV's capital and, if executed, would constitute a significant part of SRV's
revenue in the coming years. It is wonderful that we can once again implement
such an important hospital project in Finland and utilise the special expertise
we have accumulated in several previous hospital projects, such as Laakso Joint
Hospital and Bridge Hospital in Helsinki, Central Finland Central Hospital Nova
and Jorvi Hospital in Espoo.
In September, we signed an agreement with CSC - IT Center for Science on the
launch of the development phase of the LUMI AI Factory data centre project. We
bring our strong expertise in the implementation of similar technically
demanding facilities to the data centre project. The project's investment
potential will be determined during the development phase by the end of the
year. In order to be implemented, the project requires a separate investment
decision from CSC.
In early October, we also won a new arena project when the City of Oulu selected
the Raksila 2.0 business consortium formed by SRV and Trevian to build the Oulu
Experience Arena and Environment project. The project will start with a two-year
development and urban planning phase. The final decision on arena investment and
construction will be made by the end of 2027. If carried out, SRV's share of the
construction contract for the arena complex would be estimated to exceed EUR 100
million. This would be recognised in SRV's order backlog gradually and in stages
from 2028 onwards. In accordance with our competition submission, a significant
amount of other plots in the area will be reserved for SRV for further
development.
In addition to great new projects, our position is strengthened by the fact that
our financial position is strong and the number of completed, unsold apartments
is low, most of which are currently leased. The company's financial reserves,
consisting of cash and cash equivalents and undrawn credits, rose to EUR 107
million at the end of the review period. In addition to a sufficient order
backlog and a high degree of control, solvency is an important factor for the
company in an uncertain operating environment.
In the review period, we continued to promote lifecycle-wise construction. In
September, we announced that we are the first construction company in Finland to
calculate our corporate-level nature footprint. This was done as part of a
research project in which we, together with the University of Jyväskylä and the
cities of Espoo and Tampere, are developing nature footprint and handprint
calculation for construction and urban planning.
With respect to the final months of the year, we do not expect to see broader
recovery in the consumer and investor markets, although there are signs of
improvement. However, we believe that we can still launch some development
projects, and possibly developer-contracted ones, too. We expect the market to
start growing from 2026 onwards, when positive wage development and declining
labour taxation strengthen consumers' purchasing power and the halt in the
decline in interest rates and housing prices no longer encourages people to wait
to change homes. We expect growth to accelerate in 2027. We are preparing for
the improving market situation by ensuring that we are optimally positioned in
terms of supply. We will continue to strengthen our project development base and
aim to make targeted purchases of plots, for example, during the review period,
we acquired five plots in a central location in Kaleva, Tampere. As the number
of residents in urban regions that are important to SRV increases and demand in
different segments increases, we are prepared to launch new projects even on a
tight schedule.”
Saku Sipola
Group Key Figures
[][][][]
7-9/ 7-9/
1-9/ 1-9/ 1-12/
(IFRS, EUR 2025 2024 change change,
2025 2024 change change, 2024
million) %
%
Revenue -13.0
-8.7
159.7 183.5 -23.8
489.9 536.7 -46.8 745.8
Operative -71.0
-56.0
operating 1.3 4.5 -3.2
3.2 7.3 -4.1 10.3
profit
Operative 0.8 2.5 -1.6
0.7 1.4 -0.7 1.4
operating
profit, %
Operating -71.0
-62.2
profit 1.3 4.5 -3.2
2.8 7.3 -4.5 12.0
Operating 0.8 2.5 -1.6
0.6 1.4 -0.8 1.6
profit, %
Profit before
taxes -1.6 1.7 -3.3
-3.4 2.3 -5.7 5.7
Net profit for
the -1.1 1.0 -2.1
-2.2 1.7 -3.8 5.3
period
Net profit for -0.7 0.5 -1.2
-0.4 0.3 -0.7 0.7
the
period, %
Earnings per -0.11 0.04 -0.15
-0.22 -0.00 -0.22 0.18
share,
eur [1)]
Order backlog 931.3 1,179.6 -248.3 -21.1
1,052.8
(unrecognised)
Equity ratio, 34.6 34.5 0.2
35.1
%
Equity ratio, 50.7 48.2 2.5
48.2
%, excl.
IFRS 16 [2)]
Net interest -4.3
-bearing 92.2 96.4 -4.1
96.2
debt
Net interest
-bearing -26.8 -8.8 -18.0
-9.2
debt, excl.
IFRS 16
[2)]
Net gearing 64.7 69.7 -5.0
65.5
ratio, %
Net gearing -17.3 -6.0 -11.4
-6.0
ratio, %,
excl. IFRS 16
[2)]
Financial 106.9 79.1 27.8 35.2
79.6
reserves
[1. ]In the calculation of earnings per share, tax-adjusted interest on hybrid
bonds is deducted from the profit for the period.
[2.] The figure has been adjusted to remove the impacts of IFRS 16.
Significant events after the period
There were no significant events after the end of the review period.
Helsinki, 23 October 2025
Board of Directors
All forward-looking statements in this interim report 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, investors and media representatives will be held at
SRV's head office at Horisontti in Kalasatama, Helsinki on 23 October 2025,
starting at 11:00 EET. A webcast of the briefing can be followed live at
www.srv.fi/en/investors. A 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, saku.sipola@srv.fi
Jarkko Rantala, CFO, tel. +358 (0)40 674 1949, jarkko.rantala@srv.fi
Miia Eloranta, Senior Vice President, Communications and Marketing, tel. +358
(0)50 441 4221, miia.eloranta@srv.fi
Distribution:
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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 2024, our revenue totalled
EUR 745.8 million. In addition to about 800 SRV employees, we had a network of
around 3,200 partners.
SRV - Building for life