Business segment structure
Business segment structure
YIT announced on July 4, 2019 the sale of its Nordic paving and mineral aggregates businesses. As of the second quarter of 2019, YIT Corporation’s five reportable segments are Housing Finland and CEE, Housing Russia, Business premises, Infrastructure projects and Partnership properties.
Housing Finland and CEE
The segment’s business comprises development and construction of apartments, entire residential areas and leisure-time residences. The segment’s main focus is on self-developed projects, and YIT mainly sells the constructed apartments to both consumers and investors. Additionally, YIT develops and offers various living services and concepts. The segment’s geographical markets are Finland, the Czech Republic, Slovakia, Poland, Estonia, Latvia and Lithuania.
The segment’s business comprises development and construction of apartments and entire residential areas in Russia. YIT has operated in Russia in over 55 years. YIT focuses on self-developed housing construction, while maintenance, property management as well as additional services have lately become increasingly important in residential construction projects. Additionally, YIT has two industrial park projects in Russia.
In this segment YIT pursues both self-developed projects and contracting. For its self-developed projects YIT acquires users and tenants for the premises as well as develops, constructs and divests the premises. Self-developed projects typically include offices, retail premises, as well as logistics or care sector premises. In contracting, projects typically include public facilities, industrial properties and business premises. In addition to new construction, YIT also carries out renovation projects. The segment’s geographical markets are Finland, Estonia, Latvia, Lithuania and Slovakia.
The operations cover the construction of roads, bridges, railways, metro stations, harbours and parking facilities as well as building power plants, water supply and industrial plants. YIT also offers wind power plant foundation solutions as well as related services and maintenance. Additionally, YIT excavates tunnels and mines and reinforces soil using various methods and provides road maintenance services in Finland. The segment operates in Finland, Sweden, Norway, Estonia, Latvia and Lithuania.
The income for the segment derives from investments, i.e. from rental income and in the future changes in the value of the assets following their completion as well as sales. Additionally, the segment will potentially have revenue from diverse service agreements associated with the possession or acquisition of its partially owned assets. The segment’s revenue is typically low. On the other hand, rental revenue received by joint ventures or associated companies, such as fund structures, or changes in the value of properties owned by them or capital gains from their realisation are reported in the income statement of the segment under revenue in “Share of results in associated companies”. These items account for the majority of the segment’s income. The segment may also receive interest income when funding its associated companies with loan capital.
Paving (discontinued operations)
YIT announced on July 4, 2019 the sale of its Nordic paving and mineral aggregates businesses, and these businesses are reported as "Discontinued operations" in financial reporting. The transaction is estimated to be completed in the first quarter of 2020. The segment’s operations include paving and production of mineral aggregates as well as stabilisation, crushing and waterproofing in Finland, Sweden, Norway, Denmark and Russia.