Construction company SRV is refining its previous guidance for 2020.
According to the new guidelines, SRV’s operating profit for 2020 is EUR 3-6 million. Previous guidance estimates that it will improve from 2019 and be positive.
This is due to revisions to the values of certain balance sheet items in the Investment segment, which have a total negative impact of approximately EUR 12 million.
The amount includes the impairment of the additional purchase price of the Red shopping center, the change in the classification of the Pearl Plaza shopping center and the revision of the value of two other assets.
SRV sold its stake in the Red shopping center in February last year and recorded a receivable of EUR 13.5 million from the additional purchase price of EUR 50 million agreed in the transaction at that time. The shopping centre’s cash flow-based forecast has now been updated and its value has decreased. This will have a negative impact of approximately 13 million on operating profit.
SRV’s holding in the Pearl Plaza shopping center was previously classified as an asset held for sale. However, the negotiations ended most fruitlessly. the most significant reason, according to the company, was the second wave of the corona. The classification of the property will be reinstated as an interest in associates and joint ventures, which will have a positive effect of approximately EUR 6 million on operating profit.
“In line with its strategy, SRV will continue to develop the property with the intention of selling its holdings when the market situation allows,” the press release states.
In addition, the company makes adjustments to the value of the other two assets so that they have a total negative impact of approximately EUR 5 million on operating profit.
Without adjustments to the valuation of balance sheet items, the company’s estimate for the full year would have been EUR 15-18 million.
SRV will publish its financial statements bulletin on Thursday, February 4.
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