Interim reports Construction company SRV shrank, but operating profit increased – “The number of unsold completed homes is at a record low,” says CEO Saku Sipola to HS

SRV expects operating profit to grow this year from last year’s EUR 15.8 million.

Construction company SRV’s net sales fell to EUR 218 million in April-June. At the same time last year, turnover had been EUR 265 million.

The company’s operating profit, on the other hand, increased to EUR 5.7 million from EUR 1 million in the second quarter of last year.

President and CEO of SRV Saku Sipola says in the earnings release that the successes of the second quarter include implemented financing arrangements, debt reduction and positive cash flow. According to the company, it will continue to focus on reducing its debt ratio this year and aim for a strong cash flow.

“One of the essential parts of the cash flow development is well-developed home sales, which means that the number of unsold completed homes is also at a record low and will remain low until the end of the year,” says Sipola.

Sipola tells HS that the company is still far from the target level. Its rehabilitation program continues and the results are weighed down by low-profitability projects, such as the tower building rising in Kalasatama this year and the Tampere Arena construction site.

“Melting down these two big projects is really important,” Sipola says.

SRV is building a total of eight tower blocks in Kalasatama, of which a third is under construction. The plan for the whole is the same. According to Sipola, a lot has already been learned in the tower project, which will make it possible to improve the profitability of future towers.

SRV’s the order backlog has decreased from the comparison period last year. In January-June, the company recorded new projects worth approximately EUR 260 million in its order backlog.

Sipola assures that the research work on the new projects has been done carefully.

In April, the company was selected to build the Laakso Joint Hospital in Helsinki. Project The company will record the project in its order backlog in stages during 2021–2028. The project is divided into several development and implementation phases, with a total value of approximately EUR 730 million.

Sipola emphasizes that recently agreed projects appear in the order backlog with a delay.

In the future, SRV’s goal is to consolidate or diversify its project portfolio. According to Sipola, the company’s goal is to initiate more projects in which the company itself is involved as a designer from the zoning stage.

SRV expects this year’s net sales to be in the range of EUR 900–1,050 million, compared to EUR 975.5 million last year. SRV estimates that its operating profit will improve compared to last year, when it was EUR 15.8 million. SRV expects EUR 16–26 million for this year.

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