SRV - Profitability remains weak
SRV's net sales in Q2 amounted to EUR 143.1m, below our estimate of EUR 156.1m. Due to volume miss, the profitability was a disappointment, with EBIT at EUR - 3.0m (EUR 1.2m Evli).
- Revenue in Q2 was EUR 143.1m (EUR 211.4m in Q2/22), below our estimate of EUR 156.1m. Revenue declined -32.3% y/y.
- Operating profit in Q2 amounted to EUR -3.0m (EUR 10.1m in Q2/22), below our estimate of EUR 1.2m, at a margin of -2.1%. The operative operating profit in Q2 amounted to EUR -3.9m, also below our estimate of EUR 1.2m.
- The order backlog in Q2 was EUR 993.1m (EUR 745.9m in Q2/22), up by 33.1% y/y.
- SRV’s order intake during Q2 was impressive at EUR 245.9m (EUR 72.3m in Q2/22).
- Business construction revenue in Q2 was EUR 111.0m (EUR 130.0m Evli estimate). The reason for the weak revenue development for business construction was that the projects recognized in the order backlog during the review period have not yet generated significant revenue.
- Housing construction revenue in Q2 was EUR 32.1m (EUR 25.8m. Evli estimate). The housing construction activity was slightly above the level that we expected, as we estimated, the company did not recognize any developer-contracted units as income during the period yet the company was able to launch multiple residential projects during the period.
- Despite the weaker than expected profitability, the company’s improving backlog was a clear positive and will serve as a catalyst for growth in the forthcoming quarters.
- Outlook for 2023 remains unchanged.