Outlook for 2010
July 23, 2010: Interim Report 1-6/2010
YIT estimates that in 2010 the Group's revenue will increase and profit before taxes will increase significantly compared to 2009. (The estimate has not been changed after the financial statements bulletin released on February 4, 2010.)
The Group revenue and profit will clearly focus on later part of the year, because the completion schedules of development sites affect the revenue recognition of the Group. Due to the new recognition principles adopted at the beginning of 2010, residential developments are only recognised in Group-level figures when the project is completed. Both in Finland and in Russia, the number of completed units in residential development in January-June was considerably lower than in the previous year - in Finland 375 (1-6/2009: 819) and in Russia 641 (1-6/2009: 2,461). Especially in Russia more residential units will be completed during the second half of the year than in the first half of 2010.
The demand for housing is expected to remain at a good level in 2010 in Finland as well as Russia.
In Finland, residential demand continues to be supported by low interest rates, increased consumer confidence and structural factors, such as migration, population growth and decreasing family sizes. The increase in residential prices has steadied in the second quarter and the supply of new residential units on the market has increased. YIT had 4,292 (6/2009: 2,095) residential units under construction at the end of June 2010, of which more than 70 percent were sold. There were 1,324 (6/2009: 834) residential units on sale, of which completed units numbered 133 (6/2009: 302). The good plot reserves and geographically extensive operations enable an increase in residential development in 2010.
There is a great need for new housing in Russia, and therefore the demand outlook for residential units aimed at YIT's customer segment is good in the long term. YIT's selling prices of residential units have increased in all towns where it operates. Consumer confidence has increased. The increase in housing financing and loan opportunities supports residential sales. New residential projects have been started up in the market, but the supply of completed or nearly competed apartments is still limited. YIT had 5,425 (6/2009: 5,969) residential units under construction at the end of June 2010. There were 3,977 (6/2009: 4,747) residential units on sale, of which completed units accounted for 646 (6/2009: 782). Residential start-ups will be increased in 2010 in accordance with demand.
The development of consumer confidence and interest rates influence housing demand in both Finland and Russia. In Russia, housing demand is also dependent on oil prices and the ruble exchange rate.
The opportunities for organic growth in Building and Industrial Services are supported by the need for service and maintenance as well as renovation and public sector projects. There are many small companies operating in the technical building system market, and the consolidation of the market will provide opportunities for acquisitions. Industrial investments are at a low level in Finland, but the demand for industrial maintenance services will remain relatively stable. New investments in technical building systems will remain low in all YIT markets, particularly due to the low volumes of business premises construction. YIT has an extensive network of local offices in the markets where it operates and a solid market position in building system and industrial service and maintenance operations, projects and energy-efficiency services.
In the Finnish infrastructure market, new traffic-related projects will begin in this and the next year at the same time with decreasing demand in the municipal sector. Opportunities will also open in connection with road and regional maintenance contracts. YIT has large-scale road projects underway in infrastructure services. The Group has special expertise in infrastructure and a solid position as the largest private provider of road maintenance services in Finland.
Outlooks published earlier
April 29, 2010: Interim Report 1-3/2010
YIT estimates that in 2010 the Group's revenue will increase and profit before taxes will increase significantly compared to 2009. (The estimate has not been changed after the financial statements bulletin released on February 4, 2010.)
The demand for housing is expected to remain at a favourable level in 2010 in Finland as well as Russia.
In Finland, the demand is supported by low interest rates, increased consumer confidence and structural factors, such as migration, population growth and decreasing family size. Housing prices are rising in the market. There is a low supply of new residential units in the market. YIT had 3,975 residential units under construction at the end of March 2010. 1,011 residential units were on sale, of them 168 completed. Good plot reserves and geographically extensive operations enable increasing residential development activity in 2010.
There is a great need for new housing in Russia, and therefore the demand outlook for residential units aimed at YIT's customer segment is unchanged in the long term. By the end of March YIT had started the price increases in residential production in all cities where it operates. Consumer confidence has strengthened. Increasing financing and mortgage opportunities support the apartment sales. New residential projects have been started up in the market, but the supply is still limited. YIT had 4,671 residential units under construction at the end of March 2010. There were 3,585 residential units on sale, of which 900 had been completed. Residential start-ups will be increased in 2010 according to the demand.
The development of consumer confidence, employment rates and interest rates influence housing demand in Finland and Russia. In Russia, housing demand is also dependent on oil prices and the ruble exchange rate.
The opportunities of organic growth in Building and Industrial Services are supported by the need for service and maintenance as well as renovation and public sector projects. There are many small companies operating in the technical building system market, and the consolidation of the market will provide opportunities for acquisitions. Industrial investments are at a low level in Finland, but the demand for industrial maintenance services will remain relatively stable. New investments in technical building systems will remain low in all YIT markets, particularly due to the low volumes of business premises construction. YIT has an extensive network of local offices in the markets where it operates and a solid market position in building system and industrial service and maintenance operations, projects and energy-efficiency services.
In the Finnish infrastructure market, new traffic-related projects will begin in 2010 at the same time with decreasing demand in the municipal sector. Opportunities will also open in connection with road and regional maintenance contracts. YIT has large-scale road projects underway in infrastructure services. The Group has special expertise in infrastructure and a solid position as the largest private provider of road maintenance services in Finland.
| February 4, 2010: Financial Statements Bulletin 2009
The demand for housing is expected to remain good in 2010 in Finland as well as Russia. In Finland, the residential demand is supported by low interest rates, increased consumer confidence and structural factors, such as migration, increasing population and decreasing family sizes. The price level of apartments has developed positively. There is a low supply of new residential units in the market. YIT has started up new residential projects in 2009, which offers a solid starting point for 2010. At the end of 2009, YIT had 3,773 residential units under construction. There were 1,061 residential units on sale, of which 216 had been completed. Good plot reserves, geographically extensive operations and the ability to react swiftly to changes in the market enable YIT to increase residential development activity in 2010. There is a great need for new housing in Russia, and therefore the demand outlook for residential units aimed at YIT's customer segment is unchanged in the long term. At the end of 2009, housing prices have stabilized and consumer confidence has increased. New residential projects have been started up in the market, but the supply is still limited. At the end of 2009, YIT had 4,174 residential units under construction. There were 3,603 residential units on sale, of which 1,243 had been completed. YIT has improved its reputation as a reliable construction company and developed its sales process. The company has increased the availability of loans for its customers through co-operation with banks. YIT started new residential projects during the last months of 2009 and in 2010 the residential start-ups are increased responding to the market demand. Residential demand is affected by consumer confidence, employment situation and interest rate development both in Finland and Russia. Additionally, in Russia the residential demand is dependent on oil prices and the exchange rate of the ruble. The opportunities for organic growth in Building and Industrial Services are supported by the need for service and maintenance as well as renovation and public sector projects. There is a large number of small companies operating in building system markets and the consolidation development provides opportunities for acquisitions. Industrial investments are low in Finland, but the demand for industrial maintenance services will continue relatively stable. New investments in technical building systems will decrease in all YIT markets, particularly due to the low volumes of business premises construction. YIT has an extensive network of local offices in the markets where it operates and a solid market position in building system and industrial service and maintenance operations, projects and energy-efficiency services. New projects related to transportation will begin in the Finnish infrastructure market in 2010; at the same time the demand in the municipal sector will decrease. Opportunities will also open in connection with road and regional maintenance contracts. YIT has large-scale route projects underway in infrastructure services. The Group has special expertise in infrastructure and a solid position as Finland's largest private provider of road maintenance services.
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Updated July 23, 2010
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