CORRECTION to YIT Corporation’s stock exchange release on Interim report January-September 2021 on 29 October 2021 at 9:00 a.m.
YIT corrects the stock exchange release on Interim report January-September 2021 on 29 October 2021 at 9:00 a.m. In the original stock exchange release, the table was incorrect. Below the release with the correct table.
Good profitability progress continued in the third quarter. Group third quarter adjusted operating profit improved to EUR 18 million and more than doubled to EUR 69 million during January-September.
- YIT’s third quarter adjusted operating profit improved to EUR 18 million (16).
- Solid profitability in both housing segments with Housing Finland and CEE reaching adjusted operating profit of EUR 17 million (16) and Housing Russia posting adjusted operating profit of EUR 6 million (7).
- Business premises’ adjusted operating profit improved significantly to EUR 2 million (-19).
- Infrastructure’s adjusted operating profit remained positive at EUR 3 million (10) despite margin reductions in certain old projects.
- Net interest-bearing debt at EUR 411 million (740), gearing at 40% (84).
- Strong residential sales continued. Number of unsold completed apartments at a low level.
- Housing start-ups in Finland and CEE continued to increase to 2,025 (1,634).
- Plot reserve stood at EUR 787 million (852) at the end of the quarter.
- Co-operation negotiations concluded in Finland, allowing YIT to align its organisation with a renewed operating model. The estimated number of personnel reductions is a maximum of 230 employees throughout YIT Group out of which a maximum of 190 employees in Finland.
- Tuomas Mäkipeska takes up position as Chief Financial Officer on 1 November 2021.
|Operating profit margin, %
|Adjusted operating profit
|Adjusted operating profit margin, %
|Result before taxes
|Result for the period, continuing operations
|Result for the period, including discontinued operations
|Earnings per share, EUR
|Operating cash flow after investments
|Net interest-bearing debt
|Gearing ratio, %
|Equity ratio, %
|Return on capital employed, % (ROCE, rolling 12 months)
|Combined lost time injury frequency (LTIF, rolling 12 months)
|Customer satisfaction rate (NPS)
Markku Moilanen, President and CEO
“YIT’s good progress in improving profitability continued in the third quarter. The Group’s adjusted operating profit was EUR 18 million, higher than the EUR 16 million reported a year before. Looking at our cumulative performance during this year, it is evident that we are moving in the right direction. Our adjusted operating profit during the first nine months of the year more than doubled to EUR 69 million from last year’s January-September adjusted operating profit of EUR 29 million.
This good performance is the result of solid earnings development in the housing segments, as well as our rigorous work to stabilise performance in Business premises. Our housing market presence is solid in the selected cities in which we operate in Finland, Russia, Poland, the Czech Republic and Slovakia. Throughout the year, the market has been strong in all the regions and at YIT we have done excellent work in leveraging this presence and turning it into profits.
In the third quarter, our housing completions reached their low point based on the decision to momentarily cease start-ups during the spring 2020 in the midst of the COVID-19 pandemic. Despite this, the Housing Finland and CEE segment’s third quarter adjusted operating profit was firmly positive, which reflects improved margins, a more favourable sales mix and better overall efficiency. At the same time, Housing Russia continued its stable performance with a satisfactory adjusted operating profit.
Business premises posted yet another positive quarter and improved its profitability significantly from last year’s third quarter. However, the earnings level is not yet satisfactory due to some old low-margin projects which are still being finalised, but profitability is expected to gradually improve as the segment continues its work in completing those projects. Infrastructure’s third quarter adjusted operating profit was negatively impacted by margin reductions in certain projects; however, despite these, the result remained positive. This demonstrates that the underlying business which is based on our core competencies is healthy and, while certain old low-margin projects are impacting our profitability, the outlook for the business is positive.
Our focus to significantly improve our project management, as well as our operating model renewal continued in the third quarter. We concluded co-operation negotiations in Finland, which are expected to result in reductions of up to 190 people in Finland and Group-wide reductions of up to 230 people. This will enable us to align our organisation with our renewed operating model, which aims for more efficient, competitive, and customer-oriented ways of working.
Simultaneously, we have worked on our new strategy. We will announce the new strategy and objectives prior to our Capital Markets Day which will be held on 23 November.”
At the end of the third quarter 2021, YIT’s order book amounted to EUR 4,099 million (30 Jun 2021: 3,890). Compared to the second quarter, the order book increased in the Housing Finland and CEE and Partnership properties segments and remained relatively stable in all other segments. At the end of the quarter, 80% of the order book was sold (30 Jun 2021: 79).
The Group’s revenue was EUR 587 million (687). Revenue increased in the Partnership properties segment, remained stable in Business premises, and decreased in the Infrastructure and housing segments.
The Group’s adjusted operating profit amounted to EUR 18 million (16) and the adjusted operating profit margin to 3.1% (2.4). The result improved in the Business premises segment, remained stable in the housing segments, and weakened in the Infrastructure and Partnership properties segments.
YIT’s operating profit was EUR 6 million (-16). The adjusting items amounted to EUR 12 million (32), including operating profit from operations to be closed.
The Group’s revenue was EUR 1,927 million (2,094). Revenue increased in the Housing Finland and CEE and Partnership properties segments, but decreased in the Business premises, Infrastructure and Housing Russia segments.
The Group’s adjusted operating profit amounted to EUR 69 million (29) and the adjusted operating profit margin to 3.6% (1.4). The result improved in the Business premises, Housing Finland and CEE, and Housing Russia segments but decreased in the Infrastructure and Partnership properties segments.
YIT’s operating profit was EUR 46 million (-20). The adjusting items amounted to EUR 24 million (49) including, among others, operating profit from operations to be closed.
Guidance for 2021
In the fourth quarter, housing completions in Housing Finland and CEE are expected to be at a high level. Housing Russia’s solid underlying performance is estimated to continue and in Business premises the stabilising development is expected to continue for the rest of the year. The Infrastructure segment is expected to be impacted by certain low-performing projects. In Partnership properties, portfolio development is expected to continue.
YIT expects its full-year 2021 adjusted operating profit to be higher than in 2020 (EUR 85 million).
The result is dependent on certain project completions and contract closings towards the end of the year. Temporary shutdowns or slower progress on construction sites and delayed completions due to the COVID-19 pandemic could lead to the postponement of revenue and profit from one quarter or year to another. Changes in market yields or estimated future cash flows may have impacts on the fair value of the investments.
YIT aims at transferring increased construction material costs into contracting and housing prices. Thus, YIT expects it to have only minor impact on its earnings during the rest of the year.
Supported by a strong balance sheet, YIT has answered to market demand by significantly increasing its apartment start-ups in Finland and CEE countries. This is expected to tie up capital as the year progresses.
News conference for investors and media
YIT will arrange a news conference on Friday, 29 October 2021 at 10.00 a.m. Finnish time (EET, at 8.00 a.m. GMT). The results will be presented by Markku Moilanen, President and CEO of YIT Corporation, and CFO Ilkka Salonen. The news conference will be held as a live webcast that can be followed on the company’s web site at www.yitgroup.com/webcast. A recording of the webcast will be available at the same address later that day.
The news conference can be participated also through a conference call. Questions can be asked via the conference call and should be asked in English. At the end of the event, the media has the opportunity to ask questions also in Finnish.
Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at 9.55 a.m. (EET). Conference call numbers are:
- Participants from Finland +358 (0)9 8171 0310
- Participants from Sweden +46 (0)8 5664 2651
- Participants from UK and outside of Nordic countries +44 (0)33 3300 0804
- Participants from US +1 (0)63 1913 1422
The participants will be asked to provide the following confirmation code: 57113104#.
The event is targeted for analysts, portfolio managers and the media. Welcome!
For further information:
Tommi Järvenpää, Vice President, Investor Relations, YIT Corporation, tel. +358 (0)40 576 0288, firstname.lastname@example.org
Ilkka Salonen, CFO, YIT Corporation, tel. +358 (0)45 359 4434, email@example.com
Vice President, Investor Relations
Distribution: Nasdaq Helsinki, major media, www.yitgroup.com
YIT is the largest Finnish and a significant North European urban developer and construction company. Our goal is to create more sustainable, functional and attractive cities and living environments. We develop and build apartments, business premises and entire areas. We also specialise in demanding infrastructure construction. We own properties together with our partners, which supports the implementation of our significant development projects. We also provide our customers with services that increase the value of properties. We employ approximately 7,400 professionals in ten countries: Finland, Russia, Sweden, Norway, Estonia, Latvia, Lithuania, the Czech Republic, Slovakia and Poland. Our revenue in 2020 was approximately EUR 3.1 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy. www.yitgroup.com