Profit warning: SRV Group Plc lowers its operative operating profit guidance for 2019

SRV GROUP PLC     INSIDE INFORMATION     10 OCTOBER 2019      15.35 EET

Profit warning: SRV Group Plc lowers its operative operating profit guidance for 2019

SRV Group Plc specifies its outlook and changes its guidance for 2019. The company estimates that its operating profit for 2019 will be at loss due to impairments concerning investments in Russia, and decreasing margins in certain projects, such as higher than anticipated additional costs resulting from the delay in REDI Majakka residential tower.

The new guidance is:

• More developer-contracted housing units will be completed in 2019 than in the comparison period. It is estimated that a total of 809 developer-contracted housing units will be completed in 2019 (526 in 2018).
• SRV makes long-term procurement agreements, due to which the expected reduction in construction costs will not have a significant effect on the company’s earnings performance in 2019. The trend in rental income from shopping centres is positive, but slower than anticipated.
• Full-year consolidated revenue for 2019 is expected to grow compared with 2018 (revenue in 2018: EUR 959.7 million). Operative operating profit is expected to be at loss (operative operating profit in 2018: EUR -10.0 million).

The earlier guidance, issued on 17 July 2019 was:

• More developer-contracted housing units will be completed in 2019 than in the comparison period. It is estimated that a total of 809 developer-contracted housing units will be completed in 2019 (526 in 2018).
• SRV makes long-term procurement agreements, due to which the expected reduction in construction costs will not have a significant effect on the company’s earnings performance in 2019. The trend in rental income from shopping centres is positive, but slower than anticipated.
• Full-year consolidated revenue for 2019 is expected to grow compared with 2018 (revenue in 2018: EUR 959.7 million). Operative operating profit is expected to improve compared with 2018 and to be positive (operative operating profit EUR -10.0 million), but to fall short of 2017 (operative operating profit in 2017: EUR 27 million).

SRV Group Plc will publish its January – September interim report on Thursday 31 October 2019.

For further information, please contact:
Ilkka Pitkänen, CFO, +358 40 667 0906, ilkka.pitkanen@srv.fi

Distribution:
Nasdaq Helsinki
Media
www.srv.fi