HLRE Holding Plc´s annual report for the period 1 February 2024 - 31 January 2025 has been published

HLRE Holding Plc´s annual report for the period 1 February 2024 - 31 January 2025 has today been published in  English in PDF format on the company’s website;

https://www.vesivek.fi/investors/annual-financial-reports/

We have refined the description of the risks related to the continuity of operations in the Financial Statements published today, compared to the Financial Statement Release published earlier on March 24, 2025. Below is the full description of the risks related to the continuity of operations included in the company's Annual Report.

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BUSINESS CONTINUITY

The financial statements for the period of 2/1/2024 - 1/31/2025 have been prepared based on the going concern principle, assuming that the Company will be able to liquidate its assets and settle its liabilities as part of normal business operations in the foreseeable future.

The consolidated loss for the financial year ended 1/31/2025 was EUR -8.4 million. The consolidated result for the previous financial year was EUR -13.3 million, which included an impairment of goodwill of EUR 5.0 million. The Company's operating cash flow came to EUR 0.1 (4.3) million, and net debt amounted to EUR 61.1 (55.2) million. During the financial year, the Company refinanced the SEK 300 million bond issued by the Company that matured in February 2024. The bond will mature in February 2027. The bond includes a Swedish krona exchange rate risk that was not hedged at the time of signing the financial statements. A change of +-10% in the exchange rate of the Swedish krona against the euro would affect the result by approximately EUR +/-2.6 million before taxes. The terms and conditions of the bond are described in more detail in sections 15 Loans and financial assets and 17 Financial risk management.

The bond includes a cash covenant of EUR 2 million and, effective from 1 August 2025, a leverage covenant. The Group’s cash and cash equivalents amounted to EUR 2.5 million on 31 January 2025. The Group has an unused overdraft facility of EUR 1.0 million that was negotiated in March 2024 in connection with the restructuring of the SEK 300 million bond.

The Group’s operating environment is subject to uncertainty caused by the impairment of the general security situation in Europe and continued increases in raw material and energy prices and general costs. The rising costs and uncertainty have impacts on disposable income, purchase choices and consumer behaviour, among other things. In addition, the potential impacts of the significant and extensive tariffs imposed by the US in April 2025 and the uncertainty they cause are difficult to estimate and predict. They can present both challenges and opportunities to the development of the Group’s business. Ideally, the impacts will accelerate the recovery of development activity in the property market. At the same time, uncertainty about the future impacts of trade policy causes delays in decision-making concerning property investments.

The Group’s growth and development are strongly linked with the growth and development of sales and success in internationalization, and failure in them might have direct or indirect impacts on the Group’s business and growth opportunities or the development of its profitability.

In the first quarter of the financial year 2025, the Group continued the organizational efficiency improvement measures it initiated in 2023 in a few of Vesivek Oy's units. All in all, the efficiency improvement measures initiated in 2023 have had extensive impacts on the Group's Finnish companies. The executive management closely monitors the development of the Group’s various companies and businesses and is prepared to react further if the performance of the businesses is not in line with the set plans.

With due account taken of the refinancing of the bond and the extensive efficiency improvement measures taken, the Company’s management has prepared financial forecasts for the development of turnover, expenses and investments. In assessing the continuity of business operations, the Company’s management estimates that the Company’s current liquid assets and projected cash flow from operations are sufficient to cover the liabilities and obligations arising from its operations for at least 12 months. Consequently, the financial statements have been prepared on the basis of the going concern principle. The forecasts assume that there will be a moderate positive turn in the market. In addition, the Group’s management has taken measures to improve the cash position by, for example, switching to the use of consignment stock for steel products. Due to the general economic uncertainty, the cyclical nature of the industry and the short term of the order book, forecasting is subject to more management judgement than usual. If the business does not develop according to the forecasts, there is a risk of liquidity being jeopardized and the covenants being breached, which may cause significant grounds for doubting the ability of the Company and the Group to continue as a going concern. Such circumstances would also have an impact on the balance sheet valuation of the Group’s goodwill and the parent company’s shares in, and receivables from, its subsidiaries.

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HLRE Holding Plc will publish Interim Report 1 February – 30 April 2025 in June 2025.

The Group’s revenue for the period of February – April 2025 has improved compared to the same period last year, but the EBITDA has not improved due to one-time positive items in the previous fiscal year. On a comparable basis, the EBITDA for the beginning of the year has slightly improved from the previous fiscal year, but there has not been significant change in the operating environment. The company will publish more detailed income and balance sheet information in the Interim Report.

The Annual Report contains Report of the Board of Directors and the Financial Statement 1 February 2024 - 31 January 2025. The Financial Statements includes Consolidated Financial Statement, HLRE Holding Plc’s Parent Company’s Statement, the Auditor’s Report, Independent Auditor’s Report on the ESEF Financial Statements of HLRE Holding Oyj and the Assurance Report on the Sustainability Report. 

The PDF file in English of the Annual Report is attached to this release.

HLRE Holding Plc publishes the Consolidated Financial Statement also in accordance with European Single Electronic Format (ESEF) reporting requirements with the format of the report being Extensible Hypertext Markup Language (XHTML).  The Consolidated Financial Statement is available in XHTML format at:

https://www.vesivek.fi/investors/annual-financial-reports/  and attached to this release.

HLRE Holding Plc

Juha Nuutinen

For further infromation

Juha Nuutinen, Group CFO

+358 50 438 0984

juha.nuutinen@vesivek.fi