SRV Group Plc specifies its estimate of operating profit for 2020 based on the certain changes in the value in the Investments segment’s balance sheet items
SRV GROUP PLC INSIDE INFORMATION 13 JANUARY 2021 19:00 EET
SRV Group Plc specifies its estimate of operating profit for 2020 based on the certain changes in the value in the Investments segment’s balance sheet items
SRV Group Plc specifies its estimate of operating profit for 2020. The estimate is impacted by the change in the value in certain balance sheet items in the Investment segment. Previously the company estimated as part of its 2020 outlook that the operating profit for 2020 was expected to improve compared to 2019 and to be positive. The company now specifies its expected operating profit for 2020 and estimates the operating profit for 2020 to be EUR 3-6 million. In other respects, the company's previous outlook for 2020 remains unchanged.
The operating profit for 2020 will be affected by changes in the value of the Investment segment's balance sheet items, which will have a total negative impact of approximately EUR 12 million. The changes consist of a decrease in value of the additional sales price of the REDI shopping centre, a change in the classification of the Pearl Plaza shopping centre and a revision of the value of two other assets.
The company sold its holding in the REDI shopping centre in February 2020 and recorded a EUR 13.5 million sales price receivable related to the possible additional future sales price of EUR 50 million agreed at the time in connection with the transaction. Due to the updated cash flow based forecast of the shopping centre REDI, SRV will record the additional sales price, which will have a negative impact of approximately EUR 13 million on operating profit in 2020.
The company's holding in the Pearl Plaza shopping centre was designated as an asset held for sale. The second wave of coronavirus pandemic was the main reason for the sales negotiations ending without success. The classification of the asset is returned as a share in associated companies and joint ventures, which will have a positive impact of approximately EUR 6 million on the 2020 operating profit. In line with its strategy, SRV will continue to develop the property with the intention of selling its holding when the market situation allows.
In addition, the company will make adjustments to the value of the other two assets in the Investment segment so that the adjustments will have a total negative impact of approximately EUR 5 million on the 2020 operating profit.
The combined effect of the revisions to the value of balance sheet items on the operating profit for 2020 is EUR 12 million negative, and the company therefore estimates the operating profit for the year to be EUR 3-6 million. Without adjustments to the value of balance sheet items, the operating profit for 2020 would have been estimated at EUR 15-18 million.
SRV Group Plc will publish its financial statements bulletin for 2020 on Thursday, 4 February 2021. The company observes a silent period before publishing its financial reports. SRV Group Plc is now in a silent period, which will continue until the publication of the company's 2020 financial statements bulletin on Thursday, 4 February 2021.
For further information, please contact:
Saku Sipola, President & CEO, tel. +358 (0)40 551 5953, saku.sipola@srv.fi
Jarkko Rantala, CFO, tel. +358 (0)40 6741949, jarkko.rantala@srv.fi
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SRV in brief
SRV is developer and innovator in the construction industry. We want to offer the best customer experience as a constructor of urban city centres, while also being the most attractive employer in the industry. Our genuine cooperation and enthusiasm for our work comes across in every encounter. Sustainability is reflected in all our activities.
Established in 1987, we are a publicly listed company since 2007 in Helsinki Nasdaq stock exchange that operates in growth centres in Finland and Russia. Our revenue in 2019 was EUR 1,061 million. Over 1,000 people work for us and we employ a network of almost 4,000 subcontractors in our projects.
SRV – Building for life