YIT ‘satisfied’ with results

By Sandy Guthrie26 July 2012

Juhani Pitkäkoski, YIT’s president and CEO.

Juhani Pitkäkoski, YIT’s president and CEO.

Increased operating profit has been reported by Finnish-based construction firm YIT in an interim report for its construction services segment in the first half of 2012, although the company still predicts that revenue for 2012 will remain the same as 2011.

YIT reported that in its construction services segment, good residential sales continued in the second quarter. The operating profit of the segments amounted to €60.5 million in the April to June period, compared to €70.3 million in 2011.

The operating profit of its Construction Services Finland and International Construction Services segments remained at the previous year's level. YIT said that the operating profit of Building Services Northern Europe was burdened by the low profitability of project operations and a negative non-recurring item of €2.8 million in Industrial Services.

The operating profit of Building Services Central Europe had to face a decrease in the segment's revenue, low profitability in Poland and the Czech Republic, and costs arising from the restructuring of operations. It created a new business segment for building services in Central Europe in 2011.

The revenue of the business segments for the second quarter was described as being on a par with the previous year, amounting to €1,184.5 million (€1,136.9 million last year).

Revenue grew in Building Services Northern Europe, Construction Services Finland and International Construction Services. YIT said the development of revenue had been supported by a slight recovery in the demand for building services in Northern Europe, favourable development of the infrastructure business in Finland, and growth in construction services revenue in the Baltic countries and Central Eastern Europe.

A 15% increase over the year before in order backlog for the segments was reported, increasing to €4,045.4 million (€ 3,509.4 million in 2011).

Operating profit

YIT Corporation reiterated its estimate issued in connection with its financial statements for 2011, that 2012 would see revenue remain at the 2011 level, while operating profit would increase in comparison to last year.

It said that uncertainty over the general macroeconomic development might also have a negative effect on decision-making by YIT's customers and, therefore, the development and performance of YIT's business operations.

Juhani Pitkäkoski, YIT's president and CEO, said, "We aim to utilise the opportunities presented by the market situation. We responded to the continued favourable demand by starting up the construction of nearly 2,500 residential units during the second quarter. Low interest rates support residential sales in Finland, and the favourable development in the housing loan market is promoting our residential sales in Russia.

"We are satisfied with the good development in Construction Services during the second quarter. Residential sales picked up in Finland compared to the first quarter and continued to be good in Russia."

He added, "We will continue to focus on improving the profitability of Building Services Northern Europe. There are extensive efficiency improvement measures under way in the segment, and we expect their first impact to be visible during the second half of 2012. We will improve the profitability of Building Services Central Europe through the restructuring of operations."

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