Change in the YIT Management Team: Antti Inkilä to leave YIT
YIT Corporation Stock Exchange Release June 27, 2018 at 5:45 P.M.
YIT’s Board of Directors has decided to give numerical guidance for year 2018 concerning the development of both the Group pro forma revenue and adjusted pro forma operating profit.
Guidance for 2018 (IFRS)
The Group pro forma revenue 2018 is estimated to decrease by -2% – -6% from pro forma revenue 2017 (pro forma 2017: EUR 3,862.5 million).
In 2018, the adjusted pro forma operating profit[1] is estimated to be in the range of EUR 130–160 million (pro forma 2017: EUR 138.9 million).
In the second quarter, the adjusted pro forma operating profit is expected to be low due to the low number of apartment completions as well as the ramp-up phase of paving and infrastructure volumes. In the third quarter, the adjusted pro forma operating profit is expected to be on the good level of last year, driven especially by the paving season. During the first months of the year, YIT has signed several significant, long-term lease agreements and the estimate regarding the adjusted operating profit includes divestment of some of the business premises in the Helsinki metropolitan area to final investors during the fourth quarter. In the fourth quarter, the adjusted pro forma operating profit is expected to be clearly better than last year.
In its Half-Year Report, the company will give market outlook by geographies.
Estimated completions of residential projects under construction
| units | Q1/2018 actual | Q2/2018, estimate | Q3/2018, estimate | Q4/2018, estimate | Q1/2019, estimate | Later, estimate |
| Finland | 972 | 916 | 1,519 | 1,106 | 315 | 2,284 |
| CEE | 162 | 448 | 0–200 | 200–400 | 0–200 | 1,823 |
| Russia | 233 | 0 | 500–800 | 1,700–2,100 | 600–900 | 1,886 |
| Total | 1,367 | 1,364 | 2,019–2,519 | 3,006–3,606 | 915–1,415 | 5,993 |
| Apartments under construction, March 31, 2018: 14,097 | ||||||
In Finland, the average price of apartments is approximately EUR 200,000 and in the CEE countries, approximately EUR 120,000. In Russia, the average price is approximately EUR 45,000. In the CEE countries and Russia, completions are determined by commissioning permits granted by the authorities. The timing of the commissioning permit may deviate from the technical completion of a building, and the company cannot fully influence the reported completion date.
In accordance with the IFRS accounting principles, revenue from the company’s own residential construction projects is recognised on completion. As a result, in Group reporting, the profit can fluctuate greatly between quarters depending on the completion of the projects. For the Housing Finland and CEE and Housing Russia segments, revenue and adjusted operating profit are also reported using the percentage of completion (POC) based reporting method in addition to IFRS. According to the percentage of completion method, revenue is recognized by multiplying the degree of completion and the degree of sale. Previously, YIT Group’s reported operating profit using the percentage of completion method has been approximately EUR 15-20 million higher than that reported according to IFRS due to different interest capitalisation principle and timing difference of recognition of income.
The Group will publish its Half-Year Report on Thursday, July 26, 2018.
For further information, please contact:
Ilkka Salonen, CFO, YIT Corporation, tel. +358 45 359 4434, ilkka.salonen@yit.fi
Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358 40 566 6070, hanna.jaakkola@yit.fi
YIT CORPORATION
Hanna Jaakkola
Vice President, Investor Relations
Distribution: Nasdaq Helsinki, major media, www.yitgroup.com
YIT is the biggest construction company in Finland and a major player in Northern Europe. We construct and develop apartments, business premises and entire residential areas. Furthermore, we are specialists in infrastructure construction and paving. Together with our customers, our 10,000 professionals create increasingly functional, appealing and sustainable cities and living environments. We have operations in 11 countries: Finland, Russia, Scandinavian and Baltic countries, the Czech Republic, Slovakia and Poland. The new YIT was created by the merger of YIT Corporation and Lemminkäinen Corporation, both over 100 years old, on February 1, 2018. In 2017, our pro forma revenue totalled more than EUR 3.8 billion. YIT Corporation’s share is listed on Nasdaq Helsinki. www.yitgroup.com
[1] Adjusted operating profit does not include material reorganising costs, impairment or other items impacting comparability. YIT reports in accordance with IFRS principles.