SRV - Weaker than expected profitability
SRV's net sales in Q3 amounted to EUR 159.7m, quite in line with our estimate of EUR 163.4m. Operative EBIT fell to EUR 1.3m (Evli EUR 3.4m) driven by lower volumes revenue recognized nearly exclusively from contracting. New orders amounted to EUR 150.1m, and the backlog remained flat q/q at EUR 931m.
- Revenue in Q3 was EUR 159.7m (EUR 183.5m in Q3/24), quite in line with our estimate of EUR 163.4m. Revenue declined 13% y/y.
- The operative operating profit in Q3 amounted to EUR 1.3m (EUR 4.5m in Q3/24), below our estimate of EUR 3.4m.
- The decline in operative EBIT was a result of lower volumes, and recognised revenue being almost exclusively from contracting. SRV noted that infrastructure construction once again achieved a better margin than in the comparison period.
- SRV’s signed new agreements worth EUR 150.1m (EUR 273.9m in Q3/24).
The order backlog in Q3 fell to EUR 931m (EUR 1180m in Q3/24, EUR 932m in Q2/25). - SRV does not expect to see broader recovery in the consumer and investor markets during the remainder of the year but expects the market to start growing from 2026 onwards and growth to accelerate in 2027.
- Business construction revenue in Q3 was EUR 147.6m, (EUR 152.0m Evli estimate) down 26% y/y. Lower margin project management and alliance contracting accounted for 79% of the order backlog.
- Housing construction revenue in Q3 was EUR 12.0m (EUR 11.4m Evli estimate). Three developer-contracted units were recognized as income during Q3, generating total revenue of EUR 0.6m.
- SRV outlook for 2025 (specified): Revenue is expected to decline compared with 2024 and to amount to EUR 650-680m (prev. EUR 630-680m) and operative EBIT is expected to be positive.