Central Europe changes for YIT

14 February 2011

Finland's YIT has created a new business segment for building services in Central Europe, while it has reported that its fourth quarter figures have been "by far the strongest" of 2010.

YIT's Central Europe building services business has been part of its Building & Industrial Services division, but this will be divided into two business segments. One will cover the Nordic countries, Baltic countries and Russia, while the other takes in Central Europe, where YIT currently has business operations in Germany, Austria, Poland, the Czech Republic, Hungary and Romania.

From March 1, YIT's four business segments will be Building Services Northern Europe, Building Services Central Europe, Construction Services Finland, and International Construction Services.

YIT said it was changing its business segment structure because of growth in building

service business operations in Central Europe, their increased share of the group's revenue and the significant business development and profitability potential that these operations offered.

It said it aimed to be the leading provider of technical system maintenance and a forerunner in energy-saving services in the Nordic countries and Central Europe. YIT is seeking growth by strengthening its local market position and through geographical expansion to new countries. The group's potential new market areas in the area of building system services are the UK, the Netherlands and Belgium.

In reporting its fourth quarter figures, YIT said the operating profit of the segments was +17% higher than the same period in the previous year, at € 69,7 million compared to € 59,7 million. It said that profitability improved over the previous year in Construction Services Finland and International Construction Services.

The operating profit of Building & Industrial Services was burdened by a provision of € 3 million related to the reorganisation of business operations acquired in Central Europe.

The revenue of the segments in the fourth quarter was +24% higher than in the fourth quarter of the previous year, increasing to € 1187,6 million, up from € 960,5 million. YIT reported that revenue had increased considerably in Building & Industrial Services and International Construction Services. Residential sales accelerated throughout the entire area of operations of International Construction Services, it said.

For the year to December 2010, the group's profit before taxes increased by +78% over the previous year's figure of € 109,5 million. Financial expenses had been cut in half compared to the previous year, it reported.

The operating profit of the segments over the 12 months was +38% higher than in the previous year, amounting to € 229,1 million. It said the operating profit of Construction Services Finland had been considerably higher than in the previous year, with the focus of operations being shifted to residential development projects.

YIT estimated that in 2011, the combined revenue of the business segments would grow and operating profit would increase compared to this year.

It felt that residential sales would continue to be good in both Finland and Russia - particularly residential construction activity in Russia.

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