YIT revalues the book values of its asset in the Housing Russia segment and books a cost of EUR 27 million

YIT is completing its three-year capital release program where it has succeeded to release capital by approximately EUR 340 million from different assets in order to strengthen its balance sheet. Compared to the initial target, approximately EUR 45 million of assets classified as slow-moving, located mainly in Russia, are yet to be released. The company estimates that constructing projects on these plots or selling the assets profitably with their current value is not possible in the near future. Thus, the company recognises approximately a EUR 18 million impairment charge related to these plots. At the same time, YIT has decided that the primary method of divestment of these plots is to sell the plots. 

Additionally, YIT books a cost of approximately EUR 9 million to the book value of four plots located in Moscow region so that their value relates to the current dialog with the authorities. These plots are not included in the capital release program. The building permits have not been granted in past three years due to the changes in regulatory requirements and conflicts in the investment requirements compared to the initial investment requirements. YIT has attempted to negotiate compromises that would be acceptable for both parties for the past three years. There has been progress in negotiations but the final agreement to the matters is still missing.  

The booked cost totals approximately EUR 27 million, and will be recorded in the third quarter results that will be published on October 27, 2016. The cost represents approximately 7 per cent of the company’s Housing Russia segment’s operative invested capital at the end of the second quarter of 2016.

YIT aims to achieve positive adjusted operating profit in the second half of the year for the Housing Russia segment, and according to company’s estimate, adjusted operating profit will be around zero already in the third quarter of the year. The company announced in the second quarter interim report that it aims at positive operating result for the second half of the year. The booked costs do not have an impact on YIT’s guidance for 2016 on revenue growth and adjusted operating profit.   

For additional information, please contact:

Hanna Jaakkola, Vice President, Investor Relations, YIT Corporation, tel. +358 40 5666 070, hanna.jaakkola@yit.fi
Kari Kauniskangas, President and CEO, YIT Corporation, tel. +358 040 570 1313, kari.kauniskangas@yit.fi 

YIT CORPORATION

Hanna Jaakkola
Vice President, Investor Relations 

Distribution: NASDAQ Helsinki, major media, www.yitgroup.com 

YIT creates sustainable cities and better living environment by developing and constructing housing, business premises, infrastructure and entire areas. We focus on providing a first-class customer experience, high quality and continuous development of our diverse expertise. Our operating area covers Finland, Russia, the Baltic countries, the Czech Republic, Slovakia and Poland. In 2015, our revenue amounted to nearly EUR 1.7 billion, and we employ about 5,300 employees. Our share is listed on Nasdaq Helsinki. www.yitgroup.com