SRV Surges by Record on Russian Mall Projects: Helsinki Mover
SRV Group Oyj (SRV1V) rose the most since it first listed in Helsinki six years ago after a breakthrough in leasing Russian shopping malls led the Finnish real estate developer to raise its outlook for earnings this year.
SRV jumped as much as 29 percent, the most since listing on June 12, 2007. Shares in the Espoo, Finland-based company traded 23 percent higher at 3.96 euros at 12 p.m. in Helsinki, making it today’s biggest gainer among all Finnish stocks. Trading volume was more than four times the three-month daily average.
“Our decision to focus in Russia on developing, building and commercialising shopping centres has proved to be an excellent choice,” Chief Executive Officer Jukka Hienonen said in a statement today. “The observed financial performance has encouraged us to adjust our profit guidance for the full year.”
SRV’s second-quarter net income rose to 13.2 million euros ($17.5 million) from 1.5 million euros a year earlier. The company’s order backlog increased to a record 959.2 million euros as second-quarter sales from its international unit grew to 28 percent from 11 percent of revenue a year earlier.
SRV raised its outlook for 2013, saying revenue will exceed 700 million euros instead of earlier guidance of at least 642 million euros. Pretax profit will grow to at least 20 million euros, compared with a previous estimate of more than 2.8 million euros, the company said.
Most of the increase in revenue was generated by the construction of the Pearl Plaza shopping centre in St. Petersburg, 50 percent-owned by SRV, and the sale in June of a 55 percent stake in the Okhta Mall project to Russia Invest, an investment company, the company said.
The availability of competitive Russian financing as well as good demand for business premises also supported the projects, it said.
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