2014-02-06 07:00:00 CET
2014-02-06 07:00:04 CET
REGULATED INFORMATION
YIT - Financial Statement Release
YIT’s financial statements bulletin for 2013: Actions according to demanding market – Sales and cash flow in focus
Helsinki, 2014-02-06 07:00 CET (GLOBE NEWSWIRE) -- YIT CORPORATION
STOCK EXCHANGE RELEASE FEBRUARY 6, 2014 AT 8:00 AM
YIT'S FINANCIAL STATEMENTS BULLETIN FOR 2013:
Actions according to demanding market - Sales and cash flow in focus
Except where otherwise noted, the explanatory statement of the financial
statements describes the construction business, i.e. the continuing operations
after the partial demerger. The demerger of Caverion Corporation from YIT was
registered on June 30, 2013. The results of Building Services for January-June
2013 are reported under discontinued operations, along with the demerger costs
(tables section). Unless otherwise noted, the figures in brackets refer to the
corresponding period in the year before.
October-December 2013 (segment reporting, POC)
-- Revenue decreased by 6% to EUR 521.3 (555.4) million, Construction Services
Finland
-5% and International Construction Services -6%. At comparable exchange
rates, revenue decreased by 4%.
-- Operating profit decreased by 39% to EUR 41.2 (68.0) million, Construction
Services Finland -43% and International Construction Services -29%.
Operating profit includes a non-recurring cost of EUR 1.2 million related
to restructuring measures.
-- Operating profit excluding non-recurring items fell by 38% to EUR 42.4
(68.0) million.
-- Order backlog decreased by 2% to EUR 2,713.7 (2,765.1) million. Compared to
the end of September, the order backlog fell by 4%.
-- Profit before taxes declined by 45% to EUR 32.5 (59.1) million.
-- Earnings per share decreased by 46% to EUR 0.19 (0.35).
January-December 2013 (segment reporting, POC)
-- Revenue declined by 5% to EUR 1,858.8 (1,959.0) million, Construction
Services Finland -8% and International Construction Services +4%. At
comparable exchange rates, revenue decreased by 4%.
-- Operating profit decreased by 24% to EUR 152.8 (201.1) million. Operating
profit includes a non-recurring cost of EUR 1.2 million related to
restructuring measures.
-- Operating profit excluding non-recurring items fell by 21% to EUR 154.0
(194.1) million.
-- Profit before taxes declined by 28% to EUR 122.8 (169.6) million.
-- Earnings per share decreased by 28% to EUR 0.75 (1.04).
-- The partial demerger was completed successfully on June 30, 2013.
GUIDANCE FOR 2014: The Group revenue based on segment reporting is estimated to
grow by 0-10% at comparable exchange rates. The operating profit margin based
on segment reporting is estimated to be in the range of 7.5-8.5% excluding
non-recurring items.
Continuing uncertainty over the general macroeconomic development impacts YIT's
business operations and customers.
DIVIDEND PROPOSAL: According to the proposal of the Board of Directors, a
divided of EUR 0.38 per share will be paid, representing 51% of the Group's net
profit for the period based on segment reporting.
Kari Kauniskangas, President and CEO: Actions to improve sales, cash flow and
capital efficiency started to bear fruit
I am in many respects satisfied with our achievements in the challenging market
environment of 2013. Housing sales in Russia continued to grow, and in the
Baltic countries and Central Eastern Europe the favorable development continued
while the focus of operations turned to own-developed residential production.
In Infra Services, the progress was positive as a whole, and the E18
Koskenkylä-Kotka project was selected as the “Construction Site of the Year” in
Finland. We also achieved significant progress in strategically important
projects. However, the weakness of the business premises market and the caution
of consumers in the Finnish housing market had a negative impact on our results
and balance sheet. As a result, towards the end of the year, we focused on
improving sales, cash flow and cost and capital efficiency. In the fourth
quarter we succeeded among other things in selling business premises projects
and reducing the inventory of completed unsold apartments. This was seen as
good cash flow and a downturn of the trend in net debt and invested capital. In
addition, we have adjusted our cost structure according to the current market
environment, particularly in Finland.
The uncertainty of the business environment seems to continue in 2014, and we
will continue our efforts to promote sales, cash flow and a more efficient
business model. At the same time, our solid plot reserve and flexible resources
secure the opportunity to quickly react to any recovery in demand. 2014 is also
the first year in our three-year strategy period. According to our strategy, we
seek growth in all our business areas through own-developed projects, increased
capital efficiency and improved resistance to economic cycles. I would also
like to thank YIT's entire personnel for the valuable contribution in 2013.
Key figures
Segment reporting, POC
Revenue, EUR million 10-12/1 10-12/1 Change 1-12/13 1-12/12 Change
3 2
--------------------------------------------------------------------------------
Construction Services 327.1 342.6 -5% 1,219.8 1,329.0 -8%
Finland
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International Construction 192.2 205.0 -6% 621.2 599.6 4%
Services
--------------------------------------------------------------------------------
Other items 1.9 7.8 17.9 30.3
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Group, total 521.3 555.4 -6% 1,858.8 1,959.0 -5%
--------------------------------------------------------------------------------
Operating profit, EUR 10-12/1 10-12/1 Change 1-12/13 1-12/12 Change
million 3 2
--------------------------------------------------------------------------------
Construction Services 22.8 40.2 -43% 94.5 134.1 -30%
Finland
--------------------------------------------------------------------------------
International Construction 22.1 31.0 -29% 71.9 80.4 -11%
Services
--------------------------------------------------------------------------------
Other items -3.8 -3.2 -13.6 -13.4
--------------------------------------------------------------------------------
Group, total 41.2 68.0 -39% 152.8 201.1 -24%
--------------------------------------------------------------------------------
Operating profit margin, % 10-12/13 10-12/12 1-12/13 1-12/12
-------------------------------------------------------------------------
Construction Services Finland 7.0 11.7 7.7 10.1
-------------------------------------------------------------------------
International Construction Services 11.5 15.1 11.6 13.4
-------------------------------------------------------------------------
Group, total 7.9 12.2 8.2 10.3
-------------------------------------------------------------------------
Operating profit 10-12/1 10-12/1 Change 1-12/1 1-12/1 Change
excluding non-recurring items 3 2 3 2
, EUR million
--------------------------------------------------------------------------------
Construction Services Finland 23.9 40.2 -41% 95.5 134.1 -29%
--------------------------------------------------------------------------------
International Construction 22.1 31.0 -29% 71.9 73.4 -2%
Services
--------------------------------------------------------------------------------
Other items -3.5 -3.2 -13.4 -13.4
--------------------------------------------------------------------------------
Group, total 42.4 68.0 -38% 154.0 194.1 -21%
--------------------------------------------------------------------------------
Operating profit margin 10-12/13 10-12/12 1-12/13 1-12/12
excluding non-recurring items, %
-------------------------------------------------------------------------
Construction Services Finland 7.3 11.7 7.8 10.1
-------------------------------------------------------------------------
International Construction Services 11.5 15.1 11.6 12.2
-------------------------------------------------------------------------
Group, total 8.1 12.2 8.3 9.9
-------------------------------------------------------------------------
Order backlog, EUR million 12/13 9/13 Change 12/13 12/12 Change
--------------------------------------------------------------------------------
Construction Services 1,428.2 1,555.1 -8% 1,428.2 1,499.0 -5%
Finland
--------------------------------------------------------------------------------
International Construction 1,285.5 1,258.3 2% 1,285.5 1,266.1 2%
Services
--------------------------------------------------------------------------------
Group, total 2,713.7 2,813.4 -4% 2,713.7 2,765.1 -2%
--------------------------------------------------------------------------------
Other key figures, EUR million 10-12/1 10-12/1 Change 1-12/1 1-12/1 Change
3 2 3 2
--------------------------------------------------------------------------------
Profit before taxes 32.5 59.1 -45% 122.8 169.6 -28%
--------------------------------------------------------------------------------
Profit for the review period 24.3 43.8 -45% 93.9 130.7 -28%
1)
--------------------------------------------------------------------------------
Earnings per share, EUR 0.19 0.35 -46% 0.75 1.04 -28%
--------------------------------------------------------------------------------
Operating cash flow after 76.3 8.0 -87.9 49.9
investments
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
12/13 9/13 Change 12/13 12/12 Change
--------------------------------------------------------------------------
Return on investment 10.3 12.3 10.3 15.0
(last 12 months), %
--------------------------------------------------------------------------
Equity ratio, % 37.8 37.0 37.8 43.1
--------------------------------------------------------------------------
Personnel at the end of period 6,172 6,384 -3% 6,172 6,691 -8%
--------------------------------------------------------------------------
Group reporting, IFRS
10-12/1 10-12/1 Change 1-12/13 1-12/12 Change
3 2
--------------------------------------------------------------------------------
Revenue, EUR million 497.3 562.5 -12% 1,743.0 1,988.9 -12%
--------------------------------------------------------------------------------
Operating profit, EUR 29.0 68.9 -58% 104.0 198.0 -47%
million
--------------------------------------------------------------------------------
Operating profit margin, % 5.8 12.2 6.0 10.0
--------------------------------------------------------------------------------
Profit before taxes, EUR 27.8 64.7 -57% 95.0 183.8 -48%
million
--------------------------------------------------------------------------------
Profit for the review 17.8 48.0 -63% 70.3 141.2 -50%
period,
EUR million 1)
--------------------------------------------------------------------------------
Earnings per share, EUR 0.14 0.38 -63% 0.56 1.13 -50%
--------------------------------------------------------------------------------
Operating cash flow after 76.3 8.0 -87.9 49.9
investments, EUR million
--------------------------------------------------------------------------------
1) Attributable to equity holders of the parent company
12/13 9/13 Change 12/13 12/12 Change
--------------------------------------------------------------------------------
Net interest-bearing debt, EUR 781.7 857.3 -9% 781.7 616.0 27%
million (2012 non-IFRS)
--------------------------------------------------------------------------------
Gearing ratio, % (2012 non-IFRS) 112.0 123.7 112.0 80.9
--------------------------------------------------------------------------------
Outlook for 2014
YIT changed its business segment structure from the beginning of 2014 to better
correspond to the company's new management structure and business areas. As of
January 1, 2014, the company's two reporting segments are the Housing segment
and the Business Premises and Infrastructure segment. Reporting under the new
segment structure will begin from the January-March 2014 interim report.
Housing
In the long term, residential demand in Finland will be supported by migration
to growth centres. Furthermore, the population and the number of households
will increase with continued migration and the increasing number of one-person
households. YIT estimates that the demand for small apartments, in particular,
will remain good.
According to Euroconstruct's November 2013 estimate, the construction of 25,000
apartments will start in Finland during 2014. According to a report published
by VTT Technical Research Centre of Finland in January 2012, the annual need
for the production of new apartments amounts to 24,000-29,000 apartments. YIT's
goal is to strengthen its position as the leading housing developer in Finland.
YIT estimates that housing prices in Finland will remain stable in 2014.
Construction costs are estimated to increase, mainly due to new energy norms,
but the increase is expected to be moderate in 2014. The interest rates of
mortgages are forecasted to remain low, and slight improvement in consumers'
access to financing is expected. There are plans for legislation on a binding
debt ceiling for mortgages in Finland. However, planned terms for the debt
ceiling are largely in line with current market practices.
Residential demand in the Baltic countries is expected to receive support from
economic growth. Furthermore, the poor condition of residential buildings
creates a need for new high-quality apartments. The volume of residential
construction is estimated to grow in the Baltic countries (VTT Technical
Research Centre of Finland, December 2013). Euroconstruct estimated in November
2013 that residential start-ups will decline slightly in the Czech Republic and
Slovakia in 2014. In the Baltic countries and Central Eastern Europe, the
prices of apartments are expected to increase slightly.
The volume of housing construction is estimated to continue growing in Russia
in 2014, but the growth is expected to slow down somewhat from the level of the
previous years (VTT Technical Research Centre of Finland, December 2013). YIT
expects housing prices to be stable in 2014. Residential demand has been
supported by low unemployment rates and favourable development in the mortgage
market. Moreover, the increase in the interest rates on mortgages has levelled
off in recent times. Forecasts of economic growth in Russia have been lowered
recently and Russian ruble has weakened significantly against euro.
The long-term outlook for Russian residential construction is good. Living
space per person is still clearly lower than in Western Europe and existing
buildings are in poor condition, which creates the need for new, high-quality
apartments. Furthermore, the middle class is expected to grow in proportion to
the population and the number of households is expected to increase. The
development of the mortgage market in Russia has also contributed to the
expansion of the potential buyer base. YIT has promoted the availability of
mortgages to consumers through extensive cooperation with partner banks.
Business Premises and Infrastructure
The business premises market is expected to continue to be weak in Finland in
2014. Real estate investors are still cautious due to the general economic
situation and, in order to control risks, the Helsinki metropolitan area and
good tenants are appreciated. The low level of long-term interest rates
increases investors' interest in high-yield properties. Vacancy rates for
offices are still high, with vacant building stock also including relatively
old office premises in poor condition. YIT believes that the demand will focus
on modern and energy-efficient offices. Commercial construction is supported by
investments of retail segment and the expansion of foreign retail chains in the
Finnish market. Vacancy rates for commercial premises are quite low.
In the Baltic countries, non-residential construction is estimated to increase
by 5% in 2014 (VTT Technical Research Centre of Finland, December 2013). In
Slovakia, non-residential construction is expected to decrease by 8% in 2014
(Euroconstruct, November 2013).
Infrastructure construction is estimated to decrease slightly in comparison
with 2013 (Euroconstruct, November 2013). The competition especially for
smaller contracts has increased.
Board of Directors' proposal for the distribution of distributable equity
The distributable equity of the parent company YIT Corporation on December 31,
2013 is:
Retained earnings 252,575,095.42
Profit for the period 109,210,478.98
Retained earnings, total 361,785,574.40
Non-restricted equity reserve 8,443,960.43
Distributable equity, total 370,229,534.83
The Board of Directors proposes to the Annual General Meeting that the
distributable equity be disposed of as follows:
Payment of a dividend from retained earnings of EUR 0.38 per 47,724,251.68
share to shareholders
Remains in distributable equity 322,505,283.15
No significant changes have taken place in the company's financial position
after the end of the financial year. The company's liquidity is good and, in
the view of the Board of Directors, the proposed dividend payout does not
jeopardise the company's solvency.
News conference for investors and media
YIT will arrange a news conference on February 6, 2014 at 10:00 a.m. Finnish
time (EEST) at YIT's head office, Panuntie 11, 00620 Helsinki, Finland. The
event is in English and targeted for analysts, portfolio managers and the
media.
The news conference and presentation by the President and CEO of YIT
Corporation Kari Kauniskangas can also be followed through a live webcast at
www.yitgroup.com/webcast. The live webcast starts at 10:00 a.m. (EEST) and a
recording of the webcast will be available at approximately 12:00 p.m. (EEST)
at the same address.
The news conference can be participated also through a conference call.
Conference call participants are requested to dial in at least five minutes
prior to the start of the conference, at 9:55 a.m. (EEST), to number
+442076602078.
During the webcast and conference call, all questions should be presented in
English. At the end of the event the media has the possibility to ask questions
also in Finnish.
Schedule in different time zones
Financial Statements The investor and Recorded
Bulletin published analyst webcast
event, conference available
call
and live webcast
--------------------------------------------------------------------------------
EEST (Helsinki) 08:00 10:00 12:00
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CEST (Paris, 07:00 09:00 11:00
Stockholm)
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BST (London) 06:00 08:00 10:00
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US EDT (New York) 01:00 03:00 05:00
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Annual Report and Financial Statements
YIT Corporation's Annual Report and Financial Statements for 2013 will be
published on the company's website on February 24, 2014, at the latest.
YIT CORPORATION
Kari Kauniskangas:
President and CEO
For further information, please contact:
Timo Lehtinen, Chief Financial Officer, YIT Corporation, tel. +358 45 670 0626,
timo.lehtinen@yit.fi
Sanna Kaje, Vice President, Investor Relations, YIT Corporation, tel. +358 50
390 6750, sanna.kaje@yit.fi
Distribution: NASDAQ OMX, principal media, www.yitgroup.com
YIT is a construction industry leader. We create better living environments in
Finland, Russia, the Baltic countries, the Czech Republic and Slovakia. Over
100 years of experience have secured for us a strong market position: We are
the largest housing developer and one of the largest business premises and
infrastructure developers in Finland, and the most significant foreign housing
and area developer in Russia. Our vision is to stay one step ahead - while
caring for our customers, partners and personnel. We have more than 6,000
employees in seven countries. In 2012, our revenue amounted to approximately
EUR 2 billion. Our share is listed on Nasdaq OMX Helsinki. www.yitgroup.com.
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