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SRV - REDI amortization driven miss

SRV's net sales in Q4 amounted to EUR 403.8m, above our estimates and above consensus estimates (EUR 370.2m/381.0m Evli/cons.). EBIT amounted to EUR -86.8m, below our and consensus estimates (EUR 2.3m/0.2m Evli/cons.). Q4 was affected by significant amortization charges relating mainly to the REDI shopping centre.
  • Revenue in Q4 was EUR 403.8m (EUR 299.7m in Q4/18), above our estimates and consensus estimates (EUR 370.2m/381.0m Evli/Cons.). Growth in Q4 amounted to 34.7 % y/y.
  • Operating profit in Q4 amounted to EUR -86.8m (EUR 0.1m in Q4/18), below our estimates and consensus estimates (EUR 2.3m/0.2m Evli/cons.). SRV recorded amortization charges totaling EUR 92.9m, relating mainly to the REDI shopping centre sale.
  • Construction: Revenue in Q4 was EUR 403.1m vs. EUR 368.7m Evli. Operating profit in Q4 amounted to EUR 3.6m vs. EUR 8.8m Evli.
  • Investments: Revenue in Q4 was EUR 1.7m vs. EUR 1.5m Evli. Operating profit in Q4 amounted to EUR -87.5m vs. EUR -5.0m Evli.
  • Other operations and elim.: Revenue in Q4 was EUR -0.9m vs. EUR 0.0m Evli. Operating profit in Q4 amounted to EUR -2.9m vs. EUR -1.5m Evli.
  • SRV expects revenue in 2020 to decline compared with 2019 and the operative operating profit to be positive and improve compared with 2019.
  • SRV proposes that no dividend will be paid for 2019 (EUR 0.0 Evli/Cons.).
  • SRV further informed of a sale of its ownership in the REDI shopping centre and is decreasing its ownership in the Tampere Deck and Arena project along with a series of financing decisions.

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