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SRV - Earnings weaker than expected

SRV's net sales in Q3 amounted to EUR 227.1m, in slightly above our and consensus estimates (EUR 222.1m/222.0m Evli/cons.). EBIT amounted to EUR -6.3m, below our and consensus estimates (EUR -2.5m/-2.9m Evli/cons.). SRV announced the initiation of a recovery programme.
  • Revenue in Q3 was EUR 227.1m (EUR 208.7m in Q3/18), slightly above our estimates and consensus estimates (EUR 222.1m/222.0m Evli/Cons.). Growth in Q3 amounted to 8.8 % y/y.
  • Operating profit in Q3 amounted to EUR -6.3m (EUR -5.7m in Q3/18), below our estimates and consensus estimates (EUR -2.5m/-2.9m Evli/cons.), at a margin of -2.8 %. The operative operating profit amounted to EUR -7.0m, below our estimates (Evli -2.5m).
  • EPS in Q3 amounted to EUR -0.22 (EUR -0.15 in Q3/18), below our estimates and consensus estimates (EUR -0.13/-0.13 Evli/cons.).
  • The order backlog in Q3 was EUR 1,592.6m (EUR 1,661.5m in Q3/18), down by -4.1 %.
  • Construction: Revenue in Q3 was EUR 226.0m vs. EUR 220.9m Evli. Operating profit in Q3 amounted to EUR -3.4m vs. EUR -0.5m Evli.
  • Investments: Revenue in Q3 was EUR 1.4m vs. EUR 1.2m Evli. Operating profit in Q3 amounted to EUR -3.1m vs. EUR -1.5m Evli.
  • SRV further announced the initiation a recovery programme, with the short-term goal of ensuring its operative operating profit and cash flow for 2020 are positive and returning its operative operating profit for 2021 to the level of 2017.

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