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YIT’s interim report for the third quarter 2019 was published on November 1. Our revenue increased year-on-year, and adjusted operating profit decreased as anticipated. The biggest even in the quarter was the opening of Mall of Tripla in Helsinki, Finland, on October 17.
Mall of Tripla is the biggest shopping mall in the Nordic countries measured by number of shops. The construction took four years and we are proud to have successfully completed it in time for its planned grand opening. The start of the operations has been a success: the two-million-visitor milestone was reached right after the first two weeks of operation. The Tripla project is the biggest project in YIT’s history, and as a whole it is uniquely profitable for us. The project will exceed the initial profit target even though costs in the third quarter were higher than anticipated. This was because completion in time was top priority, and that had a negative impact on the operating profit of the Business premises segment.
In the Housing Finland and CEE segment, adjusted operating profit decreased year-on-year, in line with our expectations, due to the clearly lower number of completions in Finland. On the other hand, in Finland, sales to consumers grew 46% quarter-on-quarter and 22% year-on-year. We have been long working to improve customer experience; thanks to the effort, the consumers’ trust in our brand has further improved, and that was visible in sales. Additionally, this year we have increased consumer start-ups because of good demand and high pre-booking rates. Sales to institutional investors has continued to be good as well. At the end of the period, we agreed on the construction of rental housing projects worth approximately EUR 112 million for a company jointly established with Ålandsbanken and on the sale of 120 apartments located in the Helsinki metropolitan area to Elite Alfred Berg Rental Income non-UCITS Fund; the total value of the agreement is approximately EUR 28 million.
In the Infrastructure projects segment, revenue and profitability growth continued. The segment’s profitability was on a good level at approximately 4.5%. The segment’s order backlog has grown over 50% from the beginning of the year. Additionally, the decision we took in the summer to discontinue operations in unprofitable or capital-intensive regions in Russia are starting to be visible in the profitability of the Housing Russia segment that was positive in the third quarter.
Our outlook is positive. Our order backlog is strong. After the reporting period, YIT was selected by the City of Helsinki, as the main alliance partner for the Crown Bridges tramway project. Additionally, the City of Espoo, Finland, selected a company established by YIT and Meridiam Investments II for financing, design, construction and 20-year maintenance of three day care centres and five large schools. The total value of the contract is approximately EUR 240 million.
After the completion of Mall of Tripla, fair valuation of the investment will be done during the last quarter of the year. We estimate that the adjusted operating profit of the company’s continuing operations will increase from the comparison period also in the last quarter of the year.
The webcast recordings of YIT’s Sustainable Urban Environments events are worth checking out! They include interesting presentations about sustainable urban development both in English and Finnish. The presentations are visible up to December 11 at http://webcast.reloadmedia.fi/player/?video=S201910311113130