Financial Statements Bulletin 2016: Turn to growth, the apartments and large projects as the growth engine

YIT Corporation Stock Exchange Release February 2, 2017 at 8:00 a.m.

Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year. 

Segment reporting, POC

Residential projects for consumers recognised as income in line with sales and construction1


  • Revenue increased by 10% to EUR 513.7 (468.5) million. At comparable exchange rates, revenue increased by 9%.
  • Adjusted operating profit amounted to EUR 28.7 (16.6) million and adjusted operating profit margin was 5.6% (3.6%).
  • In October-December 2016, there were no adjustments.
  • Order backlog decreased by 1% from the end of September, amounting to EUR 2,613.1 million.
  • Operating cash flow after investments amounted to EUR -21.4 (43.4) million.


  • Revenue increased by 8% to EUR 1,783.6 (1,651.2) million. At comparable exchange rates, revenue increased by 9%.
  • Adjusted operating profit amounted to EUR 79.9 (76.0) million and adjusted operating profit margin was 4.5% (4.6%).
  • EUR -27.0 (-10.4) million adjustments were booked in the period.
  • Operating cash flow after investments amounted to EUR -43.1 (183.7) million.
  • Board of Directors proposes a dividend of EUR 0.22 (0.22) per share.

Group reporting, IFRS
Residential projects for consumers recognised as income upon completion1


  • Revenue increased by 3% to EUR 525.0 (511.6) million.
  • Operating profit amounted to EUR 25.3 (28.4) million and operating profit margin was 4.8 % (5.5 %).


  • Revenue decreased by 3% to EUR 1,678.3 (1 732.2) million. 
  • Operating result amounted to EUR 17.7 (81.6) million and operating profit margin was 1.1% (4.7%).
  • Adjusted operating profit amounted to EUR 44.7 (91.9) million and adjusted operating profit margin was 2.7% (5.3 %).

Guidance for 2017 (segment reporting, POC)

The Group revenue is estimated to grow by 0–10%.

The adjusted operating profit2 is estimated to be in the range of EUR 90–105 million.

The adjusted operating profit does not include material reorganisation costs, impairment or other items impacting comparability.

1In segment reporting, the revenue and profit are recognised by multiplying the percentage of completion by the percentage of sale, i.e. according to the percentage of completion method, which does not fully comply with the Group’s IFRS accounting principles. According to the Group’s IFRS accounting principles, revenue from residential projects for consumers is recognised upon completion. Furthermore, in Group reporting, part of the interest expenses are capitalised according to the IAS 23 standard, which causes differences in operating profit and financial expenses between segment reporting and Group reporting.

2 Due to the new guidelines from the European Securities and Market Authority concerning alternative performance measures, the performance measure “operating profit excluding non-recurring items” is replaced with “adjusted operating profit”. The content of adjustments equals items previously disclosed as non-recurring items and consist of material reorganization costs and impairment, among others. Adjusted operating profit is disclosed to improve comparability between reporting periods.

Kari Kauniskangas, President and CEO: 

The year 2016 was a turning point for us. The start of the year saw the weakest quarter of the previous cycle and, near the end of the year, we achieved the target of the capital release programme set out in our strategy in 2013, albeit to a certain extent at the expense of profitability. In September, we announced our renewed strategy for the next three-year period, which also marked a shift in our focus from cash flow and the capital release actions to growth while continuing to improve profitability.  We will further continue enhancing the capital efficiency as a part of normal business by utilizing partnership models, releasing capital from Russia and improving the capital turnover. Our order backlog in Finland and the CEE countries grew to an excellent level during the year, which creates a strong foundation for the new year. We started and won several large projects in 2016, with one of the most significant being the Tampere light rail contract signed in November, for which we recorded approximately EUR 110 million in our order backlog. Our profitability is trending in the right direction in all of our business segments, and the final quarter of the year was already quite promising. 

In the Business Premises and Infrastructure segment, revenue grew by almost 30% last year, while the operating profit nearly doubled. We secured the financing and sale of the Mall of Tripla in 2016. The development of the shopping mall’s occupancy rate has exceeded our expectations. Towards the end of the year, we also signed a letter of intent on the implementation of the hotel that is part of the project. The large-scale projects are progressing on schedule and on budget. We also won several new significant projects in the last quarter of the year.

In October–December, strong market demand and our demand-matched product offering were reflected in residential sales to consumers. The profitability of the Housing Finland and CEE segment improved, with the operating profit margin rising to 8.7%. Our goal in the segment is to further improve profitability by increasing consumer sales and the offering of affordable apartments in growth centres. Last year in Finland, nearly 70% of our residential start-ups and approximately 60% of our residential sales were directly to consumers. This represents a significant change from the previous year and it is an important factor in enabling future growth and increasing profitability.

The Housing Russia segment’s operating profit was positive in the fourth quarter thanks to strong residential sales. The stronger ruble supported our indicators towards the end of the year. During the year, the restucturing programme in Russia was compeleted. Late in the year, we achieved a lower level of production volume, as planned, and we will continue to release capital from Russia by further improving capital turnover to finance growth in other markets.
I thank our customers for the trust and co-operation, as well as our own personnel and partners for commitment and enthusiastic work to achieve our targets.

Key figures
Group reporting, IFRS

EUR million 10–12/16  10–12/15  Change 1–12/16  1–12/15  Change
Revenue  525.0   511.6   3%  1,678.3   1,732.2   -3% 
Operating profit  25.3   28.4   -11%  17.7   81.6   -78% 
Operating profit margin, %  4.8%  5.5%     1.1%  4.7%    
Profit before taxes  21.8   21.4   2%  -2.5   61.3     
Profit for the review period1  15.0   16.0   -6%  -7.1   47.2     
Earnings per share, EUR  0.12   0.13   -6%  -0.06   0.38     
Operating cash flow after investments -21.4   43.4      -43.1   183.7     
Net interest-bearing debt at end of period
at end of period
633.1  529.0  20% 633.1  529.0  20% 

Gearing ratio at end of period, %
112.3%  101.1%     112.3%  101.1%    
Equity ratio at end of period, % 31.2%  32.9 %     31.2%  32.9%    

Segment reporting, POC

EUR million 10–12/16 10–12/15 Change  1–12/16 1–12/15 Change 
Revenue  513.7  468.5  10%  1,783.6  1,651.2  8% 
Housing Finland and CEE  210.0  220.8  -5%  727.9  777.8  -6% 
Housing Russia  84.0  61.6  36%  267.9  266.4  1% 
Business Premises and Infrastructure  222.4  188.5  18%  797.4  615.6  30% 
Other items  -2.8  -2.4     -9.7  -8.6    
Operating profit  28.7  16.6  72%  52.9  65.7  -19% 
Operating profit margin, %  5.6%  3.6%     3.0%  4.0%    
Adjusted operating profit  28.7  16.6  72%  79.9  76.0  5% 
Housing Finland and CEE  18.4  13.4  38%  59.9  56.0  7% 
Housing Russia  2.8  0.7  284%  -2.3  10.9    
Business Premises and Infrastructure  11.2  7.5  48%  38.1  22.7  68% 
Other items  -3.7  -5.0    -15.7  -13.5    
Adjusted operating profit margin, % 5.6%  3.6%     4.5%  4.6%    
Housing Finland and CEE  8.7%  6.0%     8.2%  7.2%    
Housing Russia  3.3%  1.2%     -0.9%  4.1%    
Business Premises and Infrastructure  5.0%  4.0%     4.8%  3.7%    
Adjustments   0.0     -27.0  -10.4    
Profit before taxes  21.3  6.1  249%  13.8  27.0  -49% 
Profit for the review period1 16.1  4.6  253%  7.4  20.0  -63% 
Earnings per share, EUR  0.13   0.04  253%  0.06   0.16 -63%
Return on investment (last 12 months), % 4.7%  5.3%     4.7%  5.3%   
Net interest-bearing debt at end of period 503.9  460.8  9%  503.9  460.8 9%
Equity ratio at end of period, %  35.1%  35.5%     35.1%  35.5%   
Order backlog at end of period  2,613.1  2,172.9  20%  2,613.1  2,172.9 20%

1 Attributable to equity holders of the parent company


        1–12/16 1–12/15 Change
Dividend per share, EUR        0.22 2  0.22   

2 Board of Directors’ proposal to the Annual General Meeting

Events after the review period

In January, residential sales to consumers were around 150 units in Finland (1/16: around 70), around 80 units in the CEE countries (1/16: around 50) and around 150 units in Russia (1/16: around 200).

Outlook for 2017

Guidance (Segment reporting)

The Group revenue is estimated to grow by 0–10%.

The adjusted operating profit is estimated to be in the range of EUR 90-105 million.

The adjusted operating profit does not include material reorganisation costs, impairment or other items impacting comparability.

In addition to the market outlook, the 2017 guidance is based on the following factors: at the end of the year the company’s order backlog was solid and 60% of it was sold. Projects already sold or signed pre-agreements are estimated to contribute nearly 50% of 2017 revenue.

The increased share of consumer sales in Housing Finland and CEE is likely to have a moderate positive impact on the adjusted operating profit of the segment. The impacts of the shift to consumers will be visible in the result gradually.

In Housing Russia, the adjusted operating profit is estimated to be positive but to remain on a low level. Capital release actions in Russia are likely to have a negative impact on the profitability.

The first quarter of 2017 is expected to be the weakest quarter in terms of the adjusted operating profit, but to improve slightly year-on-year.

Market outlook


Consumer demand is estimated to remain on a good level and to focus on small, functional and affordable apartments in growth centres. The investor activity is estimated to decline slightly and even more focus will be paid on the location.

Residential price polarization is estimated to continue especially between growth centres and the rest of Finland. Access to mortgage financing is estimated to remain good.

The tenants’ interest for business premises is estimated to pick up slightly in growth centres. The real estate investors’ activity is expected to remain on a good level with focus on prime locations in the capital region. Business premises contracting is estimated to remain active. New infrastructure projects are estimated to revitalise the market.

The increased competition for skilled labour due to high construction activity expected to continue. Construction costs are estimated to increase slightly. Construction volume growth is expected to slow down.

Bank regulation and increased capital requirements of financial institutions might have an impact on the construction and real estate development.


The Russian economy is expected to remain stable on the current level. Stabilization of the economy is estimated to have a moderate, positive impact on the residential market. Residential prices are expected to remain stable. The ending of the state mortgage subsidy program might have an impact on the housing demand, however the significance of the program has diminished due to decreased interest rate levels. Residential demand is expected to focus on small and affordable apartments especially also in Russia. Construction cost inflation is estimated to moderate.

The CEE countries

Residential demand is expected to remain on a good level. Residential prices are estimated to remain stable or increase slightly. Good access to financing and low interest rates are estimated to support the residential demand. Construction costs are estimated to increase slightly. Also business premises tender market is estimated to pick-up in most of the CEE countries.

News conference for investors and media 

YIT will arrange a news conference on February 3, 2017 at 10:00 a.m. Finnish time (EET, at 08:00 a.m. GMT) at YIT's head office, Panuntie 11, 00620 Helsinki, Finland. The event is in English and targeted for analysts, portfolio managers and the media. Welcome! 


The news conference and presentation by the President and CEO of YIT Corporation Kari Kauniskangas can also be followed through a live webcast at The live webcast starts at 10:00 a.m. (EEST) and a recording of the webcast will be available at approximately 12:00 noon (EEST) at the same address. 

Conference call 

The news conference can be participated also through a conference call. Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at 9:55 a.m. (EEST), to number +44 20 3194 0552. 

During the webcast and conference call, all questions should be presented in English. At the end of the event, the media has the opportunity to ask questions also in Finnish.

Annual Report and Financial Statements

YIT Corporation's Annual Report and Financial Statements for 2015 will be published on the company's website on week 8.

For further information, please contact:  

Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358 40 5666 070,


Kari Kauniskangas
President and CEO

Distribution: NASDAQ OMX, principal media,

YIT creates better living environment by developing and constructing housing, business premises, infrastructure and entire areas. Our vision is to bring more life in sustainable cities. We want to focus on caring for customer, visionary urban development, passionate execution and inspiring leadership. Our growth engine is urban development involving partners. Our operating area covers Finland, Russia, the Baltic countries, the Czech Republic, Slovakia and Poland. In 2016, our revenue amounted to nearly EUR 1.8 billion, and we employ about 5,300 employees. Our share is listed on Nasdaq Helsinki.