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SRV - Gradual improvement in a tough market

SRV's net sales in Q1 amounted to EUR 167.0m, above our estimate of EUR 152.0m. EBIT was slightly softer than estimated yet improved y/y as expected.
  • Revenue in Q1 was EUR 167.0m (EUR 138.3m in Q1/23), above our estimate of EUR 152.0m. Revenue grew 20.7% y/y.
  • The operative operating profit in Q1 amounted to EUR 1.3m, only slightly below our estimate of EUR 1.5m.
  • SRV’s signed new agreements worth EUR 136.4m (EUR 149.9m in Q1/23).
  • The order backlog in Q1 was EUR 1020.4m (EUR 871.0m in Q1/23), up by 17% y/y.
  • Business construction revenue in Q1 was EUR 156.1m, (EUR 140.0m Evli estimate) up 37.0 % y/y. While we expected strong growth, the non-residential volumes came in even stronger than expected.
  • Housing construction revenue in Q1 was EUR 10.9m (EUR 12.0m. Evli estimate). SRV recognized only 3 residential units as income which was expected.
  • While the market remains challenging in the residential side, the company believes that it will be possible to start up selected development or developer-contracted projects in the latter part of the year
  • SRV outlook 2024 (unchanged): Full-year consolidated revenue for 2024 is expected to grow compared to 2023 (revenue in 2023: EUR 610.0 million). Operative operating profit is expected to improve on 2023 (operative operating profit in 2023: EUR 1.1 million).
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