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SRV - EBIT above expectations

SRV’s Q3 results were slightly better than expected. Although revenue fell slightly short of our estimates, EUR 208.4m vs. Evli EUR 216.8m, EBIT came in above our estimates, at EUR -5.7m vs. Evli EUR -8.4m. The earnings impact of REDI was slightly smaller than we had anticipated in Q3. SRV expects a positive operative operating profit and cash flow in Q4/18.
  • SRV’s revenue in Q3 amounted to EUR 208.4m, compared to EUR 216.8m/233.7m Evli/cons. Sales declined 22 % y/y.
  • EBIT in Q3 was EUR -5.7m compared to EUR -8.4m/-7.6m Evli/cons. International Operations stood for EUR -3.7m of EBIT. The EBIT-margin in Q3 was -2.7 %. The operating operative profit amounted to EUR -3.1m vs. EUR -6.9m Evli.
  • Order backlog at EUR 1,678.5m, up 9.3 % y/y.
  • Negative impact of the REDI project on earnings during Jan-Sep 2018 was EUR 29.7m, and EUR 9.4m in Q3.
  • In its preliminary outlook SRV expects the operative operating profit and cash flow to be positive in Q4.
  • Operations Finland: Business construction revenue EUR 159.1m (Evli 167.1m), housing construction revenue EUR 47.4m (Evli 48.2m). Operative operating profit EUR -1.8m (Evli -4.7m)
  • International operations: Revenue EUR 1.8m (Evli EUR 1.5m) and operative operating profit EUR -1.1m (Evli EUR -1.2m)
  • The completion of the REDI Majakka housing project I expected to be delayed from May 2019 to June-July 2019.

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