YIT changes its guidance practice and moves to quarterly guidance – first quarter operational development in line with the company’s expectation, balance sheet remains strong
- First quarter operational development has been in line with the company’s expectation, balance sheet remains strong
- YIT changes its guidance practice and moves to quarterly guidance due to weakened visibility in the wake of the COVID-19 pandemic – former full-year 2020 guidance withdrawn
- Comprehensive actions taken to control the impact of COVID-19 pandemic on YIT’s operations
- The sale of paving and mineral aggregates businesses completed today had a positive cash flow impact of EUR 285 million on YIT
First quarter operational development in line with the company’s expectation
On February 7, 2020, YIT estimated that the adjusted operating profit for the first quarter of 2020 would be on the level of, or above, the comparison period (continuing operations 1‒3/2019: EUR -9.7 million).
Kari Kauniskangas: ”YIT’s first quarter has operationally been in line with our expectations. So far, our construction sites have progressed as planned and there have not been significant challenges with availability of personnel or materials. However, ensuring the availability of personnel and materials requires continuous efforts as potential bottlenecks especially in the availability of materials have been identified. Residential sales have progressed well, although residential demand in Finland and the CEE countries has decreased during the last couple of weeks.”
YIT changes its guidance practice and moves to quarterly guidance – former full-year 2020 guidance withdrawn
The COVID-19 pandemic is causing uncertainty around the world. The most significant uncertainties for YIT’s business are related to availability of personnel, potential infections, regulatory decisions and availability of materials. These can lead to temporary shutdowns or slower progress on construction sites and delayed completions and consequently, postponement of revenue and profit from one quarter or year to another. In addition, changes in residential demand may have an impact on profitability in short term.
Due to weakened visibility resulting from the COVID-19 pandemic, YIT withdraws its full-year result guidance for 2020 and moves to quarterly guidance. The company’s long-term financial targets remain unchanged.
Previous result guidance for 2020 (given February 7, 2020)
The Group revenue of continuing operations for 2020 is estimated to be in the range of EUR 2,900‒3,300 million (2019: EUR 3,391.5 million). The full-year Group adjusted operating profit from continuing operations is estimated to be in the range of EUR 150‒190 million (2019: EUR 165.5 million).
YIT has taken comprehensive actions to control the impact of COVID-19 pandemic on its operations
YIT is monitoring the evolving COVID-19 pandemic closely and has taken comprehensive actions to ensure the health and well-being of its personnel, customers and business partners, as well as the progress of its construction sites and the continuation of the business. For this purpose, the company has appointed a task force reporting to the Group Management Team. The measures taken by the task force include, for instance, hygiene instructions for construction sites and ensuring procurement channels. Additionally, the group has led anticipatory actions to ensure that substitutive resources critical for construction sites and the Group work in separate locations, and that people work remotely as widely as possible. The company is also prepared for potential shutdowns of construction sites in a controlled way and subsequent actions including successful restarts. Ensuring resources for ongoing projects and demand development will have an impact on new project startups.
Kari Kauniskangas:” I am confident regarding the continuation of the business. In addition, our financing is secured through a strong balance sheet and the undrawn credit facility of EUR 300 million. Our liquidity and balance sheet were further supported by the sale of the paving and mineral aggregates businesses.”
YIT announced earlier today that the sale of its Nordic paving and mineral aggregates businesses to Peab had been completed. The sale had a positive cash flow effect of approximately EUR 285 million and the company’s net debt decreased by approximately EUR 310 million. YIT will book the transaction in the second quarter of 2020 results.
For further information, please contact:
Tommi Järvenpää, Vice President, Investor Relations, YIT Corporation, tel. +358 40 576 0288, firstname.lastname@example.org
Ilkka Salonen, CFO, YIT Corporation, tel. +358 45 359 4434, email@example.com
Vice President, Investor Relations
Distribution: NASDAQ Helsinki, key media, www.yitgroup.com
YIT is the largest Finnish and a significant North European construction company and urban developer. We develop and build apartments and living services, business premises and entire areas. We are also specialised in demanding infrastructure construction. Together with our customers, our nearly 8,000 professionals are creating more functional, attractive and sustainable cities and environments. We work in 10 countries: Finland, Russia, Sweden, Norway, the Baltic countries, Czech Republic, Slovakia and Poland. Our revenue in 2019 was approximately EUR 3.4 billion. YIT Corporation's share is listed on Nasdaq Helsinki Oy. www.yitgroup.com