Source January-June 2024 Half-Year Report published on 18 July 2024:
Financial income and expenses for April-June amounted to EUR -1.4 (-2.5) million. Net financial expenses included EUR 0.8 (0.5) million in dividend and interest income, exchange rate differences amounting to EUR 0.0 (-1.2) million arising from the conversion of subsidiary and associated company loans, which did not have an impact on cash flow, interest paid on derivatives and fair value changes amounting to EUR 0.3 (0.8) million, and interest expenses of EUR -0.3 (-0.4) million, of which EUR 0.0 (0.2) million was capitalised. In addition, financial expenses included EUR -1.4 (-1.4) million in interest on lease agreement debts under IFRS 16 and EUR -0.5 (-0.8) million in other financial expenses.
Financial income and expenses amounted to EUR -2.1 (-4.9) million in January–June. Dividend and interest income amounted to EUR 1.0 (1.0) million, interest paid on derivatives and fair value changes amounted to EUR 1.0 (0.5) million, and interest expenses were EUR -0.6 (-0.5) million, of which EUR 0.0 (0.4) million was capitalised as of the beginning of the year. In addition, financial expenses included EUR -2.8 (-2.8) million in interest on lease agreement debts under IFRS 16 and EUR -0.8 (-1.3) million in other financial expenses.
The equity ratio was 33.6 (34.3) and gearing was 70.9 (83.3) per cent. Excluding the impact of IFRS 16, the equity ratio was 46.9 (48.8) per cent and gearing was -6.2 (1.6) per cent.
Capital employed stood at EUR 274.9 (276.7) million and the return on investment was 3.2 (-4.7) at the end of the review period. Excluding the impact of IFRS 16, capital employed amounted to EUR 177.2 (172.9) million.
Net interest-bearing debt totalled EUR 96.8 (113.1) million at the end of the review period. Net interest-bearing debt saw a year-on-year decrease of EUR 16.2 million. Excluding the impact of IFRS 16, net interest-bearing debt totalled EUR -9.0 (2.2) million, representing a decrease of EUR 11.2 million on the comparison period. Housing corporation loans accounted for EUR 16.5 (13.7) million of the interest-bearing debt.
During the review period, the company agreed with the syndicate banks to exercise the one-year extension option of the current EUR 40 million committed revolving credit facility which is tied to sustainability targets as well as the replacement of the minimum EBITDA covenant with a net debt/EBITDA covenant. In accordance with the exercised extension option, the revolving credit facility is valid until April 2026.
EUR 10 million of the company's EUR 40 million committed revolving credit facility had been allocated as a committed overdraft facility by the end of the review period, and it remained unused at the end of the period. Of the remaining EUR 30 million, EUR 1 million was in use and EUR 29.0 million was unused.
The company has EUR 21.1 million and EUR 36.0 million convertible hybrid bonds resulting from the financing arrangement implemented in June 2022. The coupon interest rate for the equity-like hybrid bonds is 4.875 per cent per annum. The equity-like bonds have no maturity date, are unsecured and rank subordinate to other debt obligations. Convertibility of the hybrid bonds is structured such that the hybrid bond terms include a special right, as per the Companies Act, to convert the bonds into shares if the company does not redeem them before 30 June 2026. The hybrid bonds are recorded as equity in the balance sheet at the assumed market value (60% of nominal value) at the time of recognition, and their value in equity on the balance sheet as of 30 June 2024 was EUR 33.5 million.
At the end of the period, the Group’s financing reserves totalled EUR 80.4 (68.0) million, consisting of an undrawn committed revolving credit facility of EUR 29.0 million, an unused committed overdraft facility of EUR 10 million, cash and cash equivalents of EUR 41.4 million, and undrawn committed project financing amounting to EUR 0.0 million. The change in financing reserves compared with 31 December 2023 was affected by EUR 4.1 (-9.0) million in cash flow from operating activities and investments as well as EUR -2.3 (-7.9) million in cash flow from financing activities.
The financial covenants of SRV’s financing agreements are equity ratio, gearing, net debt/EBITDA, minimum liquidity, and certain other restrictions. The covenant levels of these financing agreements are determined on the basis of the accounting principles in force when the loan agreements were signed. Recognition of income on the basis of percentage of completion in developer contracting projects and the inclusion of capital loans into equity are taken into consideration in the calculation of the equity ratio covenant. The loan agreements also contain some other deviations from traditional covenant calculation methods. The main covenants of the financing agreements are presented in note 11 to the half-year report.
SRV's investment commitments totalled EUR 19.6 (19.6) million at the end of the review period, and consisted of investments in Fennovoima and the Tampere Central Deck and Arena project.
Translation differences recognised in equity totalled EUR -4.9 (-14.4) million at the end of the review period. Translation differences relate to SRV’s only remaining asset in Russia, its 50 per cent holding in Pearl Plaza.
January-June 2024 Half-Year Report, 18 July 2024