President and CEO's review

Revenue increased, operating profit decreased In January-September: - Revenue increased by 8 per cent to EUR 2,889.0 million (1-9/2007: EUR 2,679.5 million). - Operating profit decreased by 7 per cent to EUR 212.2 million (EUR 229.1 million). - The operating profit margin was 7.3 (8.6%). - Profit before taxes decreased by 9 per cent to EUR 187.8 million (EUR 207.1 million). - Earnings per share decreased by 15 per cent to EUR 1.02 (EUR 1.20) - Return on investment was 21.9% (25.8%). - The order backlog increased by 25 per cent to EUR 3,964.9 million (EUR 3,172.5 million). - The number of personnel at the end of September was more than 2,800 higher than a year earlier, i.e. 26,688 (23,836). In the third quarter: - Revenue was 7 per cent higher than in the previous year, amounting to EUR 970.8 million (7-9/2007: EUR 906.8 million). - Profit before taxes decreased by 31 per cent to EUR 56.9 million (EUR 82.4 million).

In January-September, demand for building system and industrial services, as well as civil engineering, remained good. In Russia, residential sales remained favourable throughout the review period. In St. Petersburg additional costs were recognised for the real estate development projects underway in the Gorelovo area due to the implementation of the area's infrastructure. In Finland, residential sales faced a downturn after the summer. In the Baltic countries construction has decreased considerably. Service and maintenance operations accounted for more than one third of our revenue, balancing the impact of economic fluctuations.

In the autumn, the financial market crisis had an impact on our area of operations. Investment decisions have been postponed and consumer confidence has weakened. In Russia, tightening loan terms for companies made actors accelerate their residential sales; this stopped the increase in prices that had continued steadily for a long time. In the last few weeks, the residential sales in Russia have weakened considerably.

We have taken measures to adjust our operations to the market outlook. We have decreased residential start-ups in Finland. In Russia we made a decision after the review period to stop the construction of several residential projects whose sales have not yet begun. Plot acquisitions and other investments have been stopped, and cost structure is resolutely being modified. In addition to strengthening operational cash flow, the Group's financial position is secured with pension insurance company loans, among other things. The objective is to ensure the Group's operational resources if the weak market situation becomes prolonged, as well as the resources for continuing profitable growth once the situation is over.

Outlook for 2008

YIT estimates that revenue for 2008 will increase, but profit before taxes will decrease clearly compared to the previous year.

During the last quarter, the operating profit of Building Systems and Industrial Services is estimated to be on the same level as in 2007, excluding the sales gain of EUR 14.4 million from the divestment of the Network Services division. The operating profit of Construction Services Finland and International Construction Services is estimated to decrease clearly during the last quarter compared to the previous year. The profit development in the last quarter faces uncertainty due to the development of consumer confidence and its effect on residential sales in Russia.

The estimate of profit development has been specified following the profit warning released on September 8, 2008. At that time, YIT estimated that the company's revenue will increase in 2008, but profit before taxes will decrease compared to the previous year. At the same time, YIT stated that the estimate on profit development has weakened, because residential demand in Finland and construction volumes in the Baltic countries have decreased further.

Hannu Leinonen
President and CEO

Updated October 29, 2008
InvestorRelations@yit.fi