SRV - Decent profitability, difficult market
SRV's net sales in Q3 amounted to EUR 186.8m, above our estimates and below consensus (EUR 176.7m/194.0m Evli/cons.). EBIT of EUR 5.5m was a positive, beating expectations (EUR 3.1m/2.7m Evli/cons.).
- Revenue in Q3 was EUR 186.8m (EUR 191.1m in Q3/21), above our estimates and below consensus estimates (EUR 176.7m/194.0m Evli/Cons.). Growth in Q3 amounted to -2% y/y.
- Operating profit in Q3 amounted to EUR 5.5m (EUR -1.6m in Q3/21), above our and consensus estimates (EUR 3.1m/2.7m Evli/cons.), at a margin of 2.9%. Profitability in Q3 was supported by improvement in the controllability of projects, successful inflation control and ensuring the availability of materials.
- Revenue in Construction in Q3 was EUR 183.9m vs. EUR 176.7m Evli. Operating profit in Q3 amounted to EUR 4.7m vs. EUR 5.1m Evli.
- Revenue in Investments in Q3 was EUR 3.2m vs. EUR 1.1m Evli. Operating profit in Q3 amounted to EUR 1.9m vs. EUR -1.0m Evli.
- Revenue in Other operations and elim. in Q3 was EUR -0.3m vs. EUR -1.1m Evli. Operating profit in Q3 amounted to EUR -1.2m vs. EUR -1.0m Evli.
- SRV will start change negotiations to adjust the company’s cost structure and number of personnel to meet the demand of the current market situation.
- The weakened consumer confidence, increased interest rates and investors’ return requirements have deteriorated the outlook for the construction sector
- Guidance for 2022 (updated 25.10): Revenue in 2022 is expected to be EUR 770-820m (800-860m) and operative operating profit to amount to EUR 17-23m (15-25m).