YIT Corporation Stock exchange release
YIT's Half-year report January−
Strategy execution continues: profitability improved despite prevailing market instability, the sale of the businesses in Russia completed successfully.
Second quarter 2022 highlights:
- Adjusted operating profit was
EUR 25 million (24). - Adjusted operating profit margin improved to 4.5% (3.4) supported by enhanced productivity.
-
Good performance in Housing continued in market instability. Earnings were weaker than previous year mainly due to a lower number of apartment completions in
Finland resulting from low start-ups during the COVID-19 pandemic. -
Transformation in other segments progressed driven by improvements in project management in Business Premises and Infrastructure and portfolio development in
Property Development . -
YIT withdrew from all operations in
Russia successfully. -
Result for the period was
EUR -277 million (11), negatively impacted by the result ofEUR -293 million from the discontinued operations following the sale of YIT's operations inRussia . Discontinued operations' result was impacted by the booking of the accumulated RUB/EUR translation difference ofEUR -253 million . The booking did not have an impact on Group's equity or cash flow. -
Net interest-bearing debt was at
EUR 435 million (353) and gearing at 51% (35). -
Order book strengthened to
EUR 4,067 million (31 March 2022 : 3,756). -
Land bank amounted to 2,145,000 sqm (
31 March 2022 : 2,173,000), which enables the construction of approx. 32,000 new homes. - Combined lost time injury frequency amounted to 12.0 (12.1).
-
Teemu Helppolainen, Executive Vice President, Housing Russia, left the company with the completion of the sale of YIT´s businesses in
Russia .
Key figures
EUR million | 4-6/22 | 4-6/21 | 1-6/22 | 1-6/21 | 1-12/21 |
Revenue | 545 | 685 | 1,063 | 1,247 | 2,652 |
Operating profit | 22 | 21 | 44 | 31 | 56 |
Operating profit margin, % | 4.1 | 3.1 | 4.2 | 2.5 | 2.1 |
Adjusted operating profit | 25 | 24 | 47 | 39 | 85 |
Adjusted operating profit margin, % | 4.5 | 3.4 | 4.4 | 3.1 | 3.2 |
Result before taxes | 14 | 12 | 28 | 12 | 22 |
Result for the period, continuing operations | 16 | 9 | 28 | 7 | 6 |
Result for the period, including discontinued operations | -277 | 11 | -410 | 15 | 4 |
Earnings per share, continuing operations, EUR | 0.07 | 0.04 | 0.12 | 0.03 | 0.01 |
Operating cash flow after investments | -133 | 109 | -174 | 178 | 288 |
Net interest-bearing debt | 435 | 353 | 435 | 353 | 303 |
Gearing ratio, % | 51 | 35 | 51 | 35 | 30 |
Equity ratio, % | 37 | 41 | 37 | 41 | 40 |
Return on capital employed, % (ROCE, rolling 12 months) | 7.6 | - | 7.6 | - | 6.8 |
Order book | 4,067 | 3,653 | 4,067 | 3,653 | 3,847 |
Combined lost time injury frequency (LTIF, rolling 12 months) | 12.0 | 12.1 | 12.0 | 12.1 | 11.0 |
Customer satisfaction rate (NPS) | 48 | 50 | 48 | 50 | 51 |
From the first quarter of 2022 onwards, YIT has four reportable segments: Housing, Business Premises, Infrastructure and
Unless otherwise noted, the figures in brackets refer to the corresponding period in the previous year.
Markku Moilanen, President and CEO
"The second quarter was eventful. Market turbulence was noticeable: while supply chains were finding new balances, consumer confidence was deteriorating due to rising interest rates and inflation. However, for us at YIT, the quarter was successful despite the prevailing market instability. The highlight of the quarter was the closure of the sale of our Russian businesses. I am satisfied that we were able to negotiate a strong deal, close it according to the agreed terms, and withdraw from all operations in
The second quarter was successful also for our businesses. We reached a solid adjusted operating profit of
The core of our strategy is a strong Housing business. The growth is sought in key cities in
The construction sector is cyclical and typically it is housing that swings harder than the rest of the construction. Now, it seems evident that we are heading towards a downturn. Accordingly, it is of the utmost importance to have a business model which withstands shocks from the market. That is what we have built-in at YIT. Our diversified business model provides us protection against market turbulence, which can be seen in our second quarter earnings. While the Housing segment's earnings decreased from last year's very strong levels to more normalised figures, the successful transformation and improving performance in Business Premises and Infrastructure drove our earnings growth.
I am happy to see that our strategy execution is on the right track. We have already achieved substantial productivity gains from our new agile operating model and focus on project management. Our renewed focus on core businesses is developing well with selectiveness in project tendering and selected divestments. ESG, in turn, unlocks future potential as green investments increase.
In short term, however, there are challenges as market instability continues. Rising interest rates and high inflation are impacting our sector, especially in the Housing business. Demand has come down from last year's exceptionally strong levels and there are uncertainties in the near term. Regarding construction materials, on the other hand, we see some signs of stabilising prices at the moment. Our material availability has remained at a good level because of strong relationships with our suppliers and hard work of our procurement and project organizations.
While we at YIT are obviously not immune from the market instability, our diversified business model and strategy which focuses on core competencies are supporting us. Our balance sheet is strong and withstands cyclical changes in sales levels. Our investments are geared towards future growth and opportunities. We have clear competitive advantages and expect to navigate through current market challenges by rigorous strategy execution and to continue our solid performance."
Results
April−June
YIT's order book increased to
YIT's revenue decreased by 20% to
YIT´s adjusted operating profit was
YIT's operating profit was
January−June
YIT´s revenue was
YIT´s adjusted operating profit increased to
YIT's operating profit was
Guidance for 2022
In Housing, completions of consumer apartments are expected to decrease compared to 2021. In Business Premises, operational performance will continue to improve. Infrastructure will gradually improve, while still impacted by certain legacy low-margin projects. In
YIT expects its Group adjusted operating profit for continuing operations to be higher than in 2021 (2021:
Temporary shutdowns or slower progress on construction sites and delayed completions due to the COVID-19 pandemic or challenges in construction material and labour availability could lead to the postponement of revenue and profit from one quarter or year to another. YIT aims to mitigate the impact of increased construction material costs by actively managing its customer relations, contracts, and procurement. Rising interest rates and overall inflation could have an impact on consumer demand and result in lower-than-expected apartment sales. Due to an increased number of apartments under construction, YIT expects to tie up more capital as the year progresses.
News conference for investors and media
YIT will arrange a news conference on Thursday,
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.
Conference call participants are requested to dial in at least five minutes prior to the start of the conference, at
- 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: 10424545#.
The event is targeted for analysts, portfolio managers and the media. Welcome!
For further information:
YIT Corporation
Vice President, Investor Relations
Distribution: Nasdaq
YIT is the largest Finnish and a significant North European development and construction company. For 110 years, we have been creating better living environments for our customers: functional homes for sustainable living, future-proof public and commercial buildings and infrastructure for smoother flow of people, businesses and society. We employ 5,500 professionals in nine countries:
https://news.cision.com/yit-oyj/r/yit-s-half-year-report-january-june-2022,c3607900
https://mb.cision.com/Main/13643/3607900/1609886.pdf
(c) 2022 Cision. All rights reserved., source