YIT restructures Russian operations

Finnish-based contractor YIT has restructured its operations in Russia and has estimated €10.4 million of non-recurring costs for the third quarter of 2015.

The company has said it will reduce its risk level in Russia by scaling down its production, but will continue to operate in all current locations, which it said would ensure greater flexibility to maintain cost-efficiency and competitiveness. The structure of YIT’s Russian operations will also be revised.

From 2016, the business will be split into St Petersburg, Moscow, and other Russian regions. In addition, a new business unit for YIT Service Russia will be established to exploit the opportunities in serving its 20,000 customers, the company said. The business unit is responsible for the maintenance of YIT projects in all operating cities. All live projects will continue as planned.

The company will reduce fixed costs related to the Russian operations to match the decrease in sales and production. The number of employees is estimated to decrease by a further 200. The company targets savings of €10 million between now and January 2016.

A €2.7 million non-recurring cost will be recorded in the third quarter of 2015, as a result of its restructure. In addition, it recognises a further €7.7 million impairment charge in the third quarter of 2015, as a result of its development costs for projects in the Moscow region.