2014-07-24 07:00:00 CEST
2014-07-24 07:00:03 CEST
REGULATED INFORMATION
YIT - Interim report (Q1 and Q3)
Interim Report January 1 – June 30, 2014: Growth in Housing, progress in capital release
Helsinki, Finland, 2014-07-24 07:00 CEST (GLOBE NEWSWIRE) -- YIT CORPORATION
INTERIM REPORT JULY 24, 2014 AT
8:00 A.M.
Interim Report January 1 - June 30, 2014: Growth in Housing, progress in
capital release
Unless otherwise noted, the figures in brackets refer to the corresponding
period in the previous year.
April-June 2014 (Segment reporting, POC)
-- Revenue increased by 5% to EUR 451.4 (430.9) million. At comparable
exchange rates, revenue increased by 9%.
-- Operating profit amounted to EUR 34.7 (38.3) million and operating profit
margin was 7.7% (8.9).
-- The order backlog increased by 8% from the end of March, amounting to EUR
2,923.9 million.
-- Operating cash flow after investments amounted to EUR -16.4 (-76.9)
million.
January-June 2014 (Segment reporting, POC)
-- Revenue decreased by 3% to EUR 854.5 (882.9) million. At comparable
exchange rates, revenue increased by 1%.
-- Operating profit amounted to EUR 61.5 (74.2) million and operating profit
margin was 7.2% (8.4).
-- Operating cash flow after investments amounted to EUR -28.7 (-82.2)
million.
Guidance for 2014 specified
The Group revenue based on segment reporting is estimated to grow by 0-5% at
comparable exchange rates. The operating profit margin based on segment
reporting is estimated to be in the range of 7.5-8.0% excluding non-recurring
items.
Continuing uncertainty over the general macroeconomic development impacts YIT's
business operations and customers. Prolongation and escalation of the Ukrainian
crisis would probably have a negative effect on YIT's business operations.
Previously, YIT estimated that the Group revenue based on segment reporting
would grow by 0-10% at comparable exchange rates, and the operating profit
margin based on segment reporting was estimated to be in the range of 7.5-8.5%
excluding non-recurring items.
Kari Kauniskangas, President and CEO:
I am satisfied with the result we achieved in the second quarter, taking into
account the continued challenging market situation in Finland and the impact of
capital release on profitability.
In the Housing segment, revenue grew in Finland, the Baltic countries and
Central Eastern Europe, and also in Russia at comparable exchange rates,
although the growth slowed down in Russia after the exceptionally strong
beginning of the year.
The result of the Business Premises and Infrastructure segment improved, as
expected, from the weak level seen in the first quarter after infrastructure
projects regained full speed. Our most significant projects progressed
according to plan. We also signed new road maintenance agreements and won
contracts that supported our order backlog. We also took promising steps in
leasing business premises and sales to investors.
We carried on our efforts to improve capital efficiency: we continued active
sales and signed for example a EUR 50 million agreement on plot cooperation to
be implemented in 2014. We expect our measures to release capital to produce
results in the second half of 2014. Cash flow in the second quarter remained
slightly negative, but we target positive cash flow after investments and
dividends on a full-year level. Our priorities remain unchanged for the second
half of the year, and we will thus continue our efforts to improve customer
focus, cost-efficiency, cash flow and capital efficiency.
Key figures
Segment reporting, POC
EUR million 4-6/14 4-6/13 Change 1-6/14 1-6/13 Change 1-12/13
--------------------------------------------------------------------------------
Revenue 451.4 430.9 5% 854.5 882.9 -3% 1,858.8
--------------------------------------------------------------------------------
Housing 303.8 247.9 23% 585.1 534.1 10% 1,152.2
--------------------------------------------------------------------------------
Finland, the Baltic 187.0 131.6 42% 359.9 320.2 12% 656.2
countries and
Central Eastern
Europe
--------------------------------------------------------------------------------
Russia 116.8 116.3 0% 225.4 214.0 5% 496.0
--------------------------------------------------------------------------------
Business Premises 147.0 177.0 -17% 268.1 335.7 -20% 688.9
and Infrastructure
--------------------------------------------------------------------------------
Other items 0.6 6.1 1.4 13.1 17.8
--------------------------------------------------------------------------------
Operating profit 34.7 38.3 -9% 61.5 74.2 -17% 152.8
--------------------------------------------------------------------------------
Operating profit 7.7% 8.9% 7.2% 8.4% 8.2%
margin, %
--------------------------------------------------------------------------------
Operating profit 34.7 38.3 -9% 61.5 74.2 -17% 154.0
excluding
non-recurring
items
--------------------------------------------------------------------------------
Housing 30.0 30.6 -2% 58.9 65.6 -10% 136.3
--------------------------------------------------------------------------------
Finland, the Baltic 16.2 13.7 18% 32.9 36.1 -9% 66.2
countries and
Central Eastern
Europe
--------------------------------------------------------------------------------
Russia 13.8 17.0 -19% 25.9 29.5 -12% 70.2
--------------------------------------------------------------------------------
Business Premises 6.9 9.9 -31% 7.1 13.0 -46% 31.0
and Infrastructure
--------------------------------------------------------------------------------
Other items -2.1 -2.2 -4.4 -4.4 -13.4
--------------------------------------------------------------------------------
Operating profit 7.7% 8.9% 7.2% 8.4% 8.3%
margin, %
excluding
non-recurring
items
--------------------------------------------------------------------------------
Housing 9.9% 12.3% 10.1% 12.3% 11.8%
--------------------------------------------------------------------------------
Finland, the Baltic 8.6% 10.4% 9.2% 11.3% 10.1%
countries and
Central Eastern
Europe
--------------------------------------------------------------------------------
Russia 11.8% 14.6% 11.5% 13.8% 14.1%
--------------------------------------------------------------------------------
Business Premises 4.7% 5.6% 2.6% 3.9% 4.5%
and Infrastructure
--------------------------------------------------------------------------------
Profit before taxes 25.7 29.8 -14% 43.9 60.4 -27% 122.8
--------------------------------------------------------------------------------
Profit for the 20.0 23.0 -13% 34.2 46.4 -26% 93.9
review period1
--------------------------------------------------------------------------------
Earnings per share, 0.16 0.18 -11% 0.27 0.37 -27% 0.75
EUR
--------------------------------------------------------------------------------
Operating cash flow -16.4 -76.9 -28.7 -82.2 -87.9
after investments
--------------------------------------------------------------------------------
Return on 9.6% 13.9% 9.6% 13.9% 10.3%
investment
(last 12 months), %
--------------------------------------------------------------------------------
Equity ratio at end 36.4% 38.5% 36.4% 38.5% 37.8%
of period, %
--------------------------------------------------------------------------------
Order backlog at 2,923.9 2,810.8 4% 2,923.9 2,810.8 4% 2,713.7
end of period
--------------------------------------------------------------------------------
1 Attributable to equity holders of the parent company
Group reporting, IFRS
EUR million 4-6/14 4-6/13 Change 1-6/14 1-6/13 Change 1-12/13
--------------------------------------------------------------------------------
Revenue 353.7 437.1 -19% 756.9 882.7 -14% 1,743.0
--------------------------------------------------------------------------------
Operating profit 8.3 32.3 -74% 31.5 63.3 -50% 104.0
--------------------------------------------------------------------------------
Operating profit 2.4% 7.4% 4.2% 7.2% 6.0%
margin, %
--------------------------------------------------------------------------------
Profit before taxes 3.5 28.2 -88% 22.3 58.5 -62% 95.0
--------------------------------------------------------------------------------
Profit for the 2.7 22.0 -88% 17.3 44.9 -62% 70.3
review period1
--------------------------------------------------------------------------------
Earnings per share, 0.02 0.18 -89% 0.14 0.36 -61% 0.56
EUR
--------------------------------------------------------------------------------
Operating cash flow -16.4 -76.9 -28.7 -82.2 -87.9
after investments
--------------------------------------------------------------------------------
Order backlog at 3,480.3 3,176.0 10% 3,480.3 3,176.0 10% 3,184.6
end of period
--------------------------------------------------------------------------------
Invested capital at 1,594.9 1,492.5 7% 1,594.9 1,492.5 7% 1,556.2
end of period
--------------------------------------------------------------------------------
Return on 5.2% 12.6% 5.2% 12.6% 7.0%
investment
(last 12 months), %
--------------------------------------------------------------------------------
Effective tax rate, 25.0% 22.8% 22.8% 23.3% 26.1%
%
--------------------------------------------------------------------------------
1 Attributable to equity holders of the parent company
6/14 6/13 Change 6/14 3/14 Change 12/13
--------------------------------------------------------------------------------
Net interest-bearing 860.2 764.4 13% 860.2 840.3 2% 781.7
debt,
EUR million
--------------------------------------------------------------------------------
Gearing ratio, % 130.4% 109.8% 130.4% 132.1% 112.0%
--------------------------------------------------------------------------------
Events after the review period
In July, YIT's residential sales in Finland have been at previous year's level.
Respectively, sales have increased in the Baltic countries and Central Eastern
Europe. In Russia, residential sales have been below the previous year's level
in July.
Market outlook for 2014
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.
Apartment start-ups are expected to decrease in Finland. According to RT's
(Confederation of Finnish Construction Industries) June 2014 estimate, the
construction of 26,500 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 estimates that housing prices in Finland will remain stable on average in
2014, but the regional divergence of prices will continue. The increase in
construction costs is expected to be moderate. The interest rates of mortgages
are forecasted to remain low. However, the macroeconomic uncertainty and
consumer confidence being below the long-term average are expected to continue
to affect the Finnish housing market.
Residential demand in the Baltic countries is expected to be supported by
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 and Slovakia (Forecon
and Euroconstruct, June 2014). Euroconstruct (June, 2014) estimated that
residential start-ups will decline slightly in the Czech Republic. YIT
estimates that housing prices will increase slightly in the Baltic countries
and Central Eastern Europe.
In Russia, the volume of residential construction is estimated to remain
unchanged from the previous year (Forecon, June 2014). YIT estimates that
housing prices in Russia will remain stable and that interest rates on
mortgages will increase in the second half of 2014. The weakened macroeconomic
outlook in Russia may have a negative effect on the housing market.
Prolongation and escalation of the Ukrainian crisis would probably have a
negative effect on YIT's business operations.
The long-term outlook for Russian residential construction is good. Living
space per person is still clearly lower than in Western Europe and housing is
in poor condition, which creates the need for new, high-quality housing.
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 demand for business premises is expected to remain weak in Finland. Retail
construction is expected to increase by 17%, while office construction is
expected to contract by 13% in 2014 (Euroconstruct, June 2014). Real estate
investors' interest in good projects in prime locations is expected to be good,
and long-term tenants are appreciated.
In the Baltic countries, business premises construction is estimated to
increase by 9% in 2014 (Forecon, June 2014). In Slovakia, business premises
construction is expected to decrease by 8% in 2014 (Euroconstruct, June 2014).
Infrastructure construction in Finland is estimated to decrease slightly in
comparison with 2013 (Euroconstruct, June 2014). The competition is expected to
remain tight, especially for smaller contracts. The government is expected to
initiate further investment into the rail network in the capital region (west
metro extension).
News conference for investors and media
YIT will arrange a news conference on July 24, 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.
Webcast
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.
Conference call
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 +44 207
660 2079.
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
Interim Report The investor and Recorded
published analyst webcast
event, conference available
call
and live webcast
--------------------------------------------------------------------------------
EEST (Helsinki) 08:00 10:00 12:00
--------------------------------------------------------------------------------
CEST (Paris, 07:00 09:00 11:00
Stockholm)
--------------------------------------------------------------------------------
BST (London) 06:00 08:00 10:00
--------------------------------------------------------------------------------
US EDT (New York) 01:00 03:00 05:00
--------------------------------------------------------------------------------
For additional 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
YIT CORPORATION
Kari Kauniskangas
President and CEO
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 2013, our revenue amounted to nearly EUR 1.9
billion. Our share is listed on Nasdaq OMX Helsinki. www.yitgroup.com
© 2024 Nasdaq, Inc. All Rights Reserved |