YIT?S INTERIM REPORT, JAN. 1 - SEPT. 30, 2005: STRONG EARNINGS GROWTH CONTINUES

YIT’S INTERIM REPORT, JAN. 1 - SEPT. 30, 2005:  STRONG EARNINGS GROWTH CONTINUES

Profit before taxes up 39 per cent

All the business segments improved their operating profit and profitability. Operating profit grew by 32 per cent on the previous year and was EUR 162.0 million (1-9/2004: EUR 122.8 million). The operating profit margin was 7.5 per cent (6.0%). Profit before taxes grew by 39 per cent to EUR 153.6 million (EUR 110.3 million).
Return on investment at the end of the 12-month period ending at the conclusion of the review period was 23.7 per cent.

Earnings per share rise by 45 per cent

Earnings per share amounted to EUR 1.83 (EUR 1.26), up 45 per cent on the previous year. Equity per share was EUR 8.28 (EUR 6.85). The equity ratio was 34.6 per cent (30.2%). The gearing ratio was 52.3 per cent (87.5%). Net debt amounted to EUR 271.8 million (EUR 370.1 million).

Revenue increases by 5 per cent

In the January-September period, the YIT Group’s revenue grew by 5 per cent on the previous year and amounted to EUR 2,163.8 million (EUR 2,058.0 million). Of the revenue, 57 per cent came from Finland, 32 per cent from the other Nordic countries, 6 per cent from the Baltic countries and 4 per cent from Russia. The maintenance and servicing business accounted for 38 per cent (36%) of revenue, or EUR 815.2 million (EUR 732.9 million).

Order backlog EUR 1,880 million

The Group’s uninvoiced backlog of orders was 10 per cent higher at the end of the review period than a year earlier, having risen to EUR 1,881.4 million (EUR 1,708.2 million). The margin of the order backlog is good. Due to their nature, part of the Group’s maintenance and servicing operations are not included in the order backlog.

Good outlook in all business segments

The business environment is still stable in all of YIT’s business segments and operating countries. Demand for services remains strong in building systems and construction, and is moderate in industrial and network services.

The market situation in Northern Europe remains good. Financial research institutions estimate that the national economies of the Nordic countries will develop at a stable rate of about 2-3 per cent in 2005-2007, outpacing growth in the EU by approximately one percentage point. The good trend in incomes and the improving employment situation support household consumption. The current information indicates that interest rates in the euro zone will remain at a relatively low level during the forecast period, maintaining investments and demand for housing.

Outlook for 2006

We estimate that the pre-tax profit also for the last quarter of 2005 will significantly outperform that of the previous year. The outlook for 2006 is favourable. If no significant changes take place in the economic environment, the Group can be expected to improve its earnings.

Publication on November 4

An event for investment analysts and portfolio managers will be held at 10:00 (Finnish time) on Friday, November 4, followed by a press conference at 11:30. Both events will take place at YIT’s head office. The address is Panuntie 11, 00620 Helsinki.

Interim Reports will not be printed; rather, they will be published as stock exchange releases and on the company’s site at www.yit.fi.
Copies of Interim Reports can be ordered from YIT Corporation, Corporate Communications, P.O. Box 36, FI-00621 Helsinki, Finland, tel. +358 20 433 2467 or fax +358 20 433 3746.

 YIT CORPORATION



Reino Hanhinen Group CEO

For additional information, contact: Reino Hanhinen, Group CEO, tel. +358 20 433 2454, reino.hanhinen@yit.fi Esko Mäkelä, Executive Vice President, tel. +358 20 433 2258, esko.makela@yit.fi Hannu Leinonen, Group CEO as from January 1, 2006,  tel. +358 20 433 3301, hannu.leinonen@yit.fi Sakari Toikkanen, Executive Vice President as from January 1, 2006, tel. +358 20 433 2336, sakari.toikkanen@yit.fi Veikko Myllyperkiö, Vice President, Corporate Communications,  tel. +358 20 433 2297, veikko.myllyperkio@yit.fi Petra Thorén, Manager, Investor Relations,  tel. +358 20 433 2635, petra.thoren@yit.fi

ANNEXES Interim Report, January 1 - September 30, 2005 Consolidated income statement and balance sheet, reconciliation of profit for the period, reconciliation of shareholders’ equity, effects of IAS 32 and IAS 39 changes, cash flow statement, key figures, contingent liabilities, commitments, as well as revenue, operating profit and order backlog by business segment and the Group’s quarterly trends.

Distribution: Helsinki Stock Exchange, principal media, www.yit.fi



 YIT CORPORATION’S INTERIM REPORT, JAN. 1 - SEPT. 30, 2005

PROFIT BEFORE TAXES UP 39 PER CENT

All the business segments improved their operating profit and profitability. Operating profit grew by 32 per cent on the previous year and was EUR 162.0 million (EUR 122.8 million). The operating profit margin was 7.5 per cent (6.0%).

Operating profit by segment (EUR million)

                          1-9/2005     1-9/2004      Change                                                             Building Systems              35.8         20.4          75 Construction Services        107.2         86.0          25 Industrial and Network                                      Services                      27.9         19.9          40 Other items                   -8.9         -3.5          *) YIT Group, total             162.0        122.8          32

*) Change over 100 per cent

Profit before taxes grew by 39 per cent to EUR 153.6 million (EUR 110.3 million). Profit after taxes amounted to EUR 113.4 million (EUR 77.9 million). Return on investment at the end of the 12-month period ending at the conclusion of the review period was 23.7 per cent. During the 2004 financial year, return on investment was 19.2 per cent.

Earnings per share amounted to EUR 1.83 (EUR 1.26), up 45 per cent on the previous year. Equity per share was EUR 8.28 (EUR 6.85).

The equity ratio was 34.6 per cent (30.2%). The gearing ratio was 52.3 per cent (87.5%). Net debt amounted to EUR 271.8 million (EUR 370.1 million).

REVENUE UP 5 PER CENT

In the January-September period, the YIT Group’s revenue grew by 5 per cent on the previous year and amounted to EUR 2,163.8 million (1-9/2004: EUR 2,058.0 million). Of the revenue, 45 per cent was generated by Building Systems, 42 per cent by Construction Services and 13 per cent by Industrial and Network Services.

Revenue by segment (EUR million)

                          1-9/2005     1-9/2004      Change                                                             Building Systems             994.7        962.7           3 Construction Services        925.3        869.8           6 Industrial and Network                                      Services                     291.3        258.1          13 Other items                  -47.5        -32.6          46 YIT Group, total           2,163.8      2,058.0           5

YIT’s service chain spans the entire life cycle of investments. YIT follows a life cycle strategy to seek better service capabilities, business growth and a steadier flow of income. Part of the Group’s revenue comes from its industrial, property, telecom network and traditional infrastructure maintenance and servicing business.
During the review period, the revenue generated by the upkeep business was EUR 815.2 million (EUR 732.9 million), representing 38 per cent (36%) of total revenue.

Of the revenue, 57 per cent came from Finland, 32 per cent from the other Nordic countries, 6 per cent from the Baltic countries and 4 per cent from Russia.

YIT’s strategy is to bolster its construction services in the Baltic countries and Russia, building system services in the Nordic and Baltic countries as well as industrial and network services in its operating countries.

ORDER BACKLOG EUR 1,880 MILLION

The Group’s market position is strong. The uninvoiced backlog of orders was 10 per cent higher at the end of the review period than a year earlier, having risen to EUR 1,881.4 million (EUR 1,708.2 million). The margin of the order backlog is good. Due to their nature, part of the Group’s maintenance and servicing operations are not included in the order backlog.

Order backlog by segment (EUR million)

                            9/2005       9/2004      Change                                                             Building Systems             575.7        564.6           2 Construction Services      1,193.8        940.0          27 Industrial and Network                                      Services                     158.3        203.6         -22 Other items                  -46.4            -           - YIT Group, total           1,881.4      1,708.2          10

The order backlog of the Industrial and Network Services business segment was down 22 per cent on the comparison period due to the length of network service agreements. In the case of network services, the order backlog is based on customers’ forecasts, which usually extend up to the end of the calendar year. This order backlog declines until the end of the year, when a new estimate for the next full year is received. In 2004, a multi-year service agreement - including its forecasts - was in force, and thus the period calculated in the order backlog was longer.

YIT AMENDS ITS STRATEGIC TARGET LEVELS

YIT Corporation’s Board of Directors amended the Group’s financial target levels on September 21, 2005. The revised financial target levels correspond to the strategic emphases set for business operations. The revenue growth target was bolstered from 5-10 per cent to 10 per cent annually on average. The target level for return on investment was raised from 20 to 22 per cent. The target for the dividend payout ratio was increased from 30-50 to 40-60 per cent. The target level for the equity ratio was kept at 35 per cent.

YIT will continue its strategy of profitable growth. In order to improve profitability and cash flow, the share of business operations accounted for by services close to end-users and long- term service agreements will be increased.

Revenue growth is sought by rounding out the building system service portfolio in the Nordic and Baltic countries, stepping up residential construction in Russia and the Baltic countries as well as expanding the offerings of Industrial and Network Services in YIT’s operating countries through the outsourcing of network operators and industry. Growth potential is also seen in services offered directly to consumers - which have a high value-added content - and in different areas of the technical infrastructure of society.

The Board of Directors’ resolution to revise the target levels was published as a stock exchange release on September 21, 2005.

THE GROUP’S FINANCIAL POSITION STRENGTHENS

The Group’s financial position remained good during the review period. Interest-bearing liabilities amounted to EUR 325.0 million (EUR 411.9 million) at the end of the period and liquid assets to EUR 53.2 million (EUR 41.8 million). Net debt was EUR 271.8 million (EUR 370.1 million). At the end of the review period, the gearing ratio was 52.3 per cent (87.5%).

Financial income during the period amounted to EUR 1.3 million (EUR 1.2 million), exchange rate gains to EUR 2.6 million (EUR -0.1 million) and financial expenses to EUR 12.8 million (EUR 13.6 million). Net financial expenses were EUR 8.9 million (EUR 12.5 million), or 0.4 per cent (0.6%) of revenue.

The proportion of fixed-interest loans in the Group’s entire loan portfolio was 56 per cent (49%). Loans raised directly on the capital and money markets represented 43 per cent (50%) of the loan portfolio.

The construction-stage contract receivables sold to financing companies totalled EUR 177.9 million (EUR 187.4 million) at the end of the period. Of this amount, EUR 79.4 million (EUR 90.5 million) is included in interest-bearing liabilities in the balance sheet and the remainder comprises off-balance sheet items as per IAS 39.
The interest on sold receivables paid to financing companies, EUR 3.8 million (EUR 4.4 million), is included in financial expenses in its entirety.

Participations in the housing corporation loans of unsold completed residences, EUR 21.8 million (EUR 17.4 million), are also included in interest-bearing liabilities, but the interest on them is booked in project expenses, as said interest is included in housing corporation maintenance charges.

Interest-bearing liabilities included EUR 5.8 million in leasing commitments (EUR 11.2 million).

Total assets in the consolidated balance sheet amounted to EUR 1,621.4 million (EUR 1,514.0 million) at the end of the period.

CAPITAL EXPENDITURES AND ACQUISITIONS

Gross capital expenditures on non-current assets included in the balance sheet totalled EUR 22.3 million (EUR 24.3 million) during the January-September period, representing 1.0 per cent (1.2%) of revenue. Investments in construction equipment amounted to EUR 8.9 million (EUR 5.6 million) and investments in information technology to EUR 2.1 million (EUR 3.5 million). Other production investments came in at EUR 1.1 million (EUR 1.5 million). Other investments amounted to EUR 10.2 million (EUR 13.7 million).

In Building Systems, YIT Building Systems Oy acquired a majority holding in the Estonian company A/S Emico in August. Emico engages in electrical contracting and servicing.

YIT’s property maintenance business in the Greater Helsinki Area was sold to Sol Palvelut Oy on September 1, 2005. By means of this transaction, YIT phased out the maintenance of the external areas of properties and building superintendent services. In the property services provided by YIT itself, the company will from now on focus on works related to the technical systems of properties.

CHANGES IN THE GROUP STRUCTURE

The Industrial and Network Services business segment was formed on June 1, 2005, by merging Services for Industry and Data Network Services. The structure of the business segment will be gradually streamlined in 2006 by merging YIT Primatel Oy, YIT Service Oy and YIT Industria Oy into the parent company YIT Industrial and Network Services Oy. At the beginning of 2006, industrial electricity, automation and HEPAC operations will be transferred to the business segment from YIT Kiinteistötekniikka Oy. The business functions that will be transferred had revenue of EUR 54 million in 2004.

In Latvia, the building system services company YIT BS Latvia SIA is being renamed YIT Tehsistem SIA.

NUMBER OF EMPLOYEES: 21,500

During the review period, the Group employed 21,330 (22,012) people on average. At the end of the period, the Group had 21,468 employees (22,013). Of YIT’s employees, 53 per cent work in Finland, 36 per cent in the other Nordic countries and 11 per cent in the Baltic countries and Russia.

Personnel by business segment, September 30, 2005

                                      No.   Share of the                                                  Group’s                                                employees Building Systems                   11,941            56% Construction Services               4,937            23% Industrial and Network                                   Services                            4,275            20% Corporate Services                    315             1% YIT Group, total                   21,468           100%

Personnel by country, September 30, 2005

                                      No.   Share of the                                                  Group’s                                                employees Finland                            11,502            53% Sweden                              4,215            20% Norway                              2,455            11% Denmark                             1,062             5% Lithuania, Latvia, Estonia          1,443             7% Russia                                791             4% YIT Group, total                   21,468           100%

SHARE CAPITAL AND SHARES

YIT Corporation’s share capital was EUR 61,292,854 at the beginning of the review period and the number of shares outstanding was 61,292,854. Due to the subscription of shares on the basis of Series C and D share options from 2002, the share capital increased by EUR 380,706 on May 6, 2005, by EUR 325,538 on June 27, 2005, and by EUR 131,176 on August 19, 2005. At the end of the period, the share capital was EUR 62,130,274 and the number of shares was 62,130,274.

During the review period, 293,705 Series C share options were traded at an average price of EUR 32.93/option and 325,153 Series D share options at an average price of EUR 39.47/option.

Authorizations to increase the share capital

During the review period, no share issues were organized and convertible bonds or bonds with warrants were not floated. At the end of the period, the Board of Directors did not have valid share issue authorizations or authorizations to issue convertible bonds or bonds with warrants.

The company did not own any of its shares during the report period.
The subsidiaries did not own shares in the parent company.

YIT Corporation’s Annual General Meeting held on March 16, 2005, decided to buy back a minimum of 200 to a maximum of 2,000,000 of the company’s own shares and authorized the Board of Directors to decide on the disposal of these shares.

Market capitalization grows to over two billion

The average share price during the January-September period was EUR 26.09 (EUR 15.78), with a high of EUR 36.44 (EUR 17.53) and a low of EUR 17.90 (EUR 13.51). The share price more than doubled during the past 12 months. The closing rate was EUR 35.30 (EUR 15.85).

Share turnover during the period amounted to EUR 1,127 million (EUR 492.5 million), with 43,215,873 (31,206,346) shares being traded.
Market capitalization at the end of the period was EUR 2,193.2 million (EUR 969.7 million).

Number of shareholders surging

The number of registered shareholders was 7,456 (4,928) at the beginning of the review period and 9,260 (7,059) at its end. The number of private investors grew by almost 1,700 in the January- September period.

According to the nominee registers, 25.5 per cent of the shares (19.9%) were owned by foreigners at the beginning of the period and 35.3 per cent (24.5%) at the end. Other foreign ownership at the end of the review period amounted to 2.2 per cent (2.0%); thus, a total of 37.5 per cent (26.5%) of the company’s shares outstanding were owned by international investors.

MONITORING AND ANTICIPATING THE MARKET SITUATION

 About 90 per cent of YIT’s revenue is generated in one of the most economically and politically stable areas in the world - the Nordic countries - and approximately 5 per cent in the Baltic countries.
Thanks to good and stable economic development in Lithuania, Latvia and Estonia, these countries will most likely meet EMU criteria and achieve euro zone membership in 2007-2008. Our core revenue is stable and profitable, enabling us to expand our operations in the growing housing market of Russia. Slightly less than 90 per cent of YIT’s revenue is generated by the Construction Services and Building Systems business segments. Variations in the total demand for the services of these business segments are due largely to cyclical fluctuations in construction investments and the market for property repairs and maintenance. Industrial and Network Services’ market situation in turn hinges on the investment cycles of industry and data network operators as well as the rate at which maintenance, servicing and installation operations are outsourced.
Over the longer term, the structure of demand will be increasingly weighted in favour of labour-intensive servicing, repair and modernization works due the ageing property and capital stock and the greater complexity of new technical systems. YIT monitors and anticipates the trend in both the market structure and cyclical variations so as to be able to react to changes in good time, instead of permitting operations to drift freely in business cycles.

MARKET SITUATION REMAINS GOOD IN NORTHERN EUROPE

The Nordic countries are still booming. Financial research institutions estimate that the national economies of the Nordic countries will develop at a stable rate of about 2-3 per cent in 2005-2007, outpacing growth in the EU by approximately one percentage point. The good trend in incomes and the improving employment situation support household consumption. The current information indicates that interest rates in the euro zone will remain at a relatively low level during the forecast period, maintaining investments and demand for housing. The Nordic construction market represents 7.5 per cent of the Western European construction market. The Nordic construction market will grow by 3- 4 per cent during the present year. In 2006 and 2007, growth will slacken slightly. Housing sales in Finland will continue to be as brisk as in the previous year. Growth in exports and industrial output increases the need for industrial investments and maintenance in the Nordic countries. Russia and Norway benefit from the high prices of oil. The rate of growth in Russia, Estonia, Latvia and Lithuania is about twice as fast as in the Nordic countries.

Finland

In September, Nordea estimated that Finland’s GDP will rise by 1.9 per cent this year, 3.6 per cent the next and 3.1 per cent in 2007.
Demand for exports from Finland declined as a result of weaker-than- expected economic growth in the euro zone and the lengthy labour dispute in the Finnish paper industry, and consequently the growth forecast for the present year was adjusted downwards. The improvement in the employment count, the good trend in incomes and the low interest rate level support household consumption and demand for housing. The growth rate of investments was slacker than expected in the first part of the year. According to the survey released by the Research Institute of the Finnish Economy ETLA in September, private investments will grow by 2.5 per cent this year and by 5.0 and 5.6 per cent during the next two years. ETLA estimates that average annual growth in private investments will amount to 3.4 per cent from 2004-2009. Investments by the manufacturing industry will grow at a slow rate. According to the business cycle report published by the Confederation of Finnish Construction Industries RT in November, the volume of construction will grow by 3 per cent both this year and the next. Residential construction and repair works will remain brisk. Residential start- ups will number 32,750 this year and 32,250 the next. Construction of industrial and commercial premises will also be on the up and office construction has now passed its low point. Annual growth in renovation works will be 2-3.5 per cent during the present decade.
ETLA predicts that total construction output will increase at an average annual rate of 2.4 per cent from 2005 to 2009, that is, faster than in the previous five-year period. Growth in new construction and renovation maintains demand in the construction and building system markets (heating, plumbing, air-conditioning, electrical and automation contracting, and maintenance). The market for industrial, property and infrastructure maintenance will expand as the outsourcing trend progresses. Telecom operators are expected to keep outsourcing their field functions in the future. Growth in the number of broadband connections will also continue for many years. On the other hand, investments to expand the fixed and mobile phone networks will remain slight.

Sweden

At the end of August, the Swedish National Institute of Economic Research KI estimated that Sweden’s workday-adjusted GDP had grown by 3.6 per cent last year, driven by exports. After the slack phase in the last quarter of the previous year and the first quarter of the present year, economic growth has picked up the pace again. The factors underlying this positive trend are the high capacity utilization ratio in industry, solid earnings, the positive incomes trend enjoyed by households and the low interest rates. KI stated that the boom will continue and raised its workday-adjusted GDP growth estimate for the present year to 2.4 per cent and forecast growth of 3.2 and 3.0 per cent for 2006 and 2007, respectively. In the present year, private and public consumption are the engines of growth. In 2006, GDP growth will be on a broader footing as exports increase due to international demand and the effect of the relatively weak Swedish krona. Investments will increase by 9.0 per cent this year, but growth will then slow down to 6.9 and 4.3 per cent during the next two years. Fixed investments by industry will increase by 16.0 per cent this year and 9.0 and 3.9 per cent in 2006 and 2007. Investments by the service sector will also see buoyant growth of slightly over 5 per cent during the present year and the next two years. KI states that growth in housing investments will continue at a rate of 19.1 per cent this year and by 10.0 and 4.8 per cent during the next two years. According to the business cycle barometer KI released in October, the order backlogs of construction companies have increased, and these companies expect to see further backlog growth. There is a shortage of skilled labour. The National Board of Housing, Building and Planning (Boverket) notes that 60 per cent of municipalities have reported a housing shortage. Boverket predicts that the construction of 31,000 new residential units will be started up this year and 33,500 the next.

Norway

Economic growth remains strong in mainland Norway, as interest rates are low, oil investments are surging, the international economy is recovering and the prices of Norwegian export products are high. According to the forecast released by Statistics Norway in September, GDP in mainland Norway will grow by 3.9 per cent in 2005 and by 2.2 per cent next year. Low interest rate levels, good trends in salaries and wages, and tax cuts will increase domestic consumption by just over 4 per cent during the present year. Growth in fixed investments will accelerate to 11.8 per cent, as investments by the oil sector will also rise buoyantly this year.
Oil investments will increase by 21.8 per cent this year. If the price of oil remains relatively high in the future, investments will also keep riding high. Housing investments will still increase by 11.6 per cent this year, but growth will slacken significantly in subsequent years. The prices of residences increased by 8 per cent from the third quarter of 2004 to the third quarter of 2005.
Residential start-ups numbered 30,000 last year, or 30 per cent more than in the previous year. Housing construction remains brisk, even though growth has slowed down. According to Statistics Norway, the construction of 17,868 residential units was started up in the January-August period of the present year, with an increase of 3.4 per cent in floor area on the corresponding period of the previous year. Start-ups of other types of buildings during the first eight months of the present year outnumbered the corresponding year-ago figure by 2.6 per cent. In June, Euroconstruct estimated that the construction of new buildings will see growth of 6.1 per cent this year and a drop of 2.9 per cent in 2006. Renovation would grow by 3.3, 1.3 and 2.7 per cent in 2005, 2006 and 2007, respectively.

Denmark

The outlook for the Danish economy is good. In September, Nordea anticipated that GDP growth in 2005-2007 will amount to 2.6, 2.4 and 2.0 per cent, respectively. The best surprise this year was that export growth gathered steam. Exports will rise by 4.5 per cent this year, picking up the pace further to over 5 per cent in the next two years. Household consumption is also expected to increase at a rapid clip during the present year thanks to a positive incomes trend and stimulatory economic policy. During the next two years, household consumption will only rise moderately.
Growth in investments is stable at around 3 per cent annually.
Investments in residential buildings rose at a rate of about 10 per cent during the previous two years. Growth will keep on track during the present year and the next - 5.6 and 3.4 per cent, respectively - thanks to low interest rates and new kinds of housing loans. The Danish Construction Association estimates that the work required to repair the damage wreaked by the storm in early January will increase the volume of construction and repair works; this means growth in repair works this year. In June, Euroconstruct estimated that the construction of new housing will see steady growth of 5 per cent in 2005-2007, while other building construction will increase by about 3 per cent each year. Over and above the work to repair storm damage, other repair works will only see slight growth.

Baltic countries

Growth in investments and GDP in the Baltic countries significantly outpaces growth in the Nordic countries, and is expected to remain at a level of 5-6 per cent during the next few years. The growth of these economies is supported by the high educational level in the area and the EU membership of Estonia, Latvia and Lithuania.
According to Nordea’s financial review in September, growth in investments in 2005-2007 will be around 10 per cent in Estonia and Latvia. In Lithuania, growth in investments will be 18 per cent this year and 13 and 10 per cent during the next two years. Over the next few years, the growth rate of construction investments will also be in the double digits. Inflation in Estonia and Lithuania is 2-3 per cent; in Latvia, too, inflation will decline from its current level of 6 per cent to 3 per cent in 2007. Real interest rates have been negative in all three countries, but the slowing down of inflation will quickly swing them to zero. The interest rate spread with the euro will narrow as the countries seek EMU membership. Estonia and Lithuania will most likely achieve EMU entry in 2007, with Latvia following suit a year later.
Affordable borrowing, economic growth and the greater affluence of the population have increased demand for new residences and renovation. Last year, 12,500 residential units were completed in the Baltic countries. In 2005-2007, the number of completed residences will rise to 16,000-18,000. VTT estimates that this year 3,500 residential units will be completed in Estonia, 4,500 in Latvia and 8,000 in Lithuania.

Russia

The high price of oil supports Russian economic growth. In September, the Russian Ministry of Finance estimated that GDP will rise by 5.9 per cent during the present year. In September, Nordea predicted that GDP will grow by 5.5 per cent this year and by 5.1 per cent the next. The slackening of growth from last year’s rate of 7.1 per cent is due to the slowdown of growth in investments and industrial output. Inflation will surge to almost 13 per cent this year, but will level off at 10 per cent during the next two years.
Last year, investments grew by 10.8 per cent, but have begun to lose momentum in spite of the high price of oil and the high capacity utilization ratio. Investment growth will drop to 8 per cent this year and further to 6 per cent the next. It is expected that investments will pick up the pace to 8 per cent in 2007.
Thanks to the good incomes trend, household consumption has become the primary engine of growth. It is estimated that private consumption will grow by 8.8 per cent during the present year and by 7 per cent the next. The greater affluence of the middle class has strengthened demand for residences in large cities such as Moscow and St Petersburg.

 EARNINGS TRENDS OF THE BUSINESS SEGMENTS

BUILDING SYSTEMS

In the January-September period, Building Systems’ revenue grew by 3 per cent on the previous year and amounted to EUR 994.7 million (EUR 962.7 million). The maintenance and servicing business accounted for 60 per cent of the revenue of the business segment.
The breakdown of revenue by country was as follows: Sweden, 38 per cent, Finland, Lithuania, Latvia, Estonia and Russia, 31 per cent, Norway, 22 per cent, and Denmark, 9 per cent.

The business segment’s operating profit grew substantially to EUR 35.8 million (EUR 20.4 million). The operating profit margin for the January-September period was 3.6 per cent (2.1%). It was 4.1 per cent in the third quarter.

The order backlog at the end of the period was EUR 575.7 million (EUR 564.6 million). The breakdown of the backlog by country was: Sweden, 29 per cent, Finland, Lithuania, Latvia, Estonia and Russia, 37 per cent, Norway, 16 per cent, and Denmark, 17 per cent.
At the end of the period, the business segment had 11,941 employees (12,451). Of them, 4,203 worked in Sweden, 3,699 in Finland, 2,455 in Norway, 1,062 in Denmark and 522 in the Baltic countries and Russia.

Changes in the organization structure

At the beginning of 2006, industrial electricity, automation and HEPAC operations in Finland will be transferred to the Industrial and Network Services business segment from YIT Kiinteistötekniikka Oy. The business functions that will be transferred had revenue of EUR 54 million in 2004.

An independent country group will be set up from Building Systems’ business functions in the Baltic countries and Russia as from the beginning of 2006. These business functions were previously part of the same corporate entity as Finnish functions. The revenue of the Russian and Baltic business functions was EUR 26.5 million in 2004.

Brisk residential construction in Sweden

YIT Sverige AB’s revenue was EUR 381.2 million (EUR 362.5 million).
The maintenance and servicing business accounted for 52 per cent of its revenue. The order backlog was EUR 166.3 million (EUR 184.2 million).

Industry has revived somewhat and companies are more confident about the future. The market situation has remained good in the construction industry, and the operational volumes, order backlogs and personnel strengths of companies have seen growth. Housing construction is significantly brisker than usual, having grown by about one-fifth compared with the previous year. Other new construction has increased somewhat compared with last year, but has remained slight. There has been minor growth in refurbishing and modernization works.

During the review period, YIT landed an order for the delivery and installation of ventilation equipment from LKAB, one of the world’s leading producers of iron pellets. YIT will supply power, illumination and surveillance systems for BMW’s new testing centre in Arjeplog.

The real estate company Locum AB has ordered electrical installation works and sprinkler systems for Dalen Hospital. With Akademiska Hus, a real estate company specializing in training and research facilities, YIT made an end-to-end agreement for the construction of cleanrooms for nano-research at the Lund Institute of Technology and an agreement for a piping contract for a project in Stockholm in which the premises of the University College of Arts, Crafts and Design (Konstfack) will be converted to meet the needs of Sida, the Swedish Agency for International Development Cooperation.

Market for building equipment systems improving in Finland

YIT Building Systems’ revenue in Finland, Lithuania, Latvia, Estonia and Russia amounted to EUR 307.9 million (EUR 317.5 million). The share of revenue accounted for by the maintenance and servicing business was 62 per cent. The order backlog was EUR 215.8 million (EUR 219.2 million).

The market for both new investments in and the refurbishing of building equipment systems is improving slightly in Finland. In the field of security technology, an agreement has been made with Neste Oil for the delivery of a fire alarm system for the production line of the Diesel project. Housing projects carried out in association with YIT Construction Services continued in Finland and St Petersburg. The Innopark business park in Hämeenlinna, DHL Business Park and the Intelligate office building in Turku are also in the implementation stage.

The market for property maintenance and servicing is growing in Finland due to the greater amount and diversity of technical systems as well as the outsourcing of services. Property management agreements have been signed with TMW Pramerica Property Investment GmbH and the real estate investment company Griffin Forvaltning A/S.

Rising energy prices and the EU Directive on the Energy Performance of Buildings that will come into force at the beginning of 2006 have accelerated the development of new life-cycle responsibility models, especially with a view to improving the energy-efficiency of the existing property stock.

The markets are stimulated by the start-up of large-scale investments in industry and the growth in the order backlog of the shipbuilding industry. The forest industry pushed back both new and modernization investments due to the problematic labour market situation in the spring; new investments are primarily made abroad.
Of the projects being carried out for industry, UPM’s paper machine project in Changshu, China, is in the handing-over stage. The new projects being started up include hall air-conditioning for M- real’s paperboard mill in Simpele.

Brisk activity in the Baltic and Russian markets

The volume of operations in the Lithuanian, Latvian, Estonian and Russian markets grew once again compared with the previous year. It is expected that the trend will remain favourable during the last months of the year as well.

In Moscow, Russia, technical maintenance agreements were made with the Rolf-Chimki car dealership and IKEA. The Arena project in Tserepovets continued. Shopping centre projects continued in Kaunas and Klaipeda, Lithuania. An agreement on technical installation works on a mobile phone network was made with the mobile phone operator BITE in Latvia. Towards the end of the period, YIT acquired a majority stake in the electrical contracting and servicing company A/S Emico.

Further growth in modernization works in Norway

YIT Building Systems AS’ revenue amounted to EUR 217.6 million (EUR 213.2 million). Growth was seen in maintenance operations and servicing agreements. The share of revenue accounted for by the maintenance and servicing business was 75 per cent. The order backlog amounted to EUR 93.1 million (EUR 75.2 million).

Start-ups in the construction of commercial premises in Norway were on a par with last year. The market for modernization works has seen further growth. Start-ups of new housing projects have slackened slightly.

During the report period, a heating and ventilation system contract valued at EUR 22 million began for the new Akershus University Hospital AHUS in the proximity of Oslo. In addition to traditional building equipment system works, the project includes applications for operating theatres, isolation wards and cleanrooms. The solar panel manufacturer Scanwafer ordered electrical works for its new production premises from YIT. An order came in from the Kragerø Golfpark Spa & Resort for hotel heating and ventilation works, including the option for a follow-up agreement on the works required at its spa.

Works on Norwegian State Railways’ tunnel project continued outside Oslo, with YIT serving as Balfour Beatty’s subcontractor.

Maintenance market thought to be on the rise in Denmark

YIT A/S’ revenue amounted to EUR 88.2 million (EUR 76.0 million).
The share of revenue accounted for by the maintenance and servicing business was 53 per cent. The order backlog amounted to EUR 100.5 million (EUR 86.0 million).

The outlook for the Danish economy remained good. Construction is the fastest growing field of industry, having grown by close to one- fifth compared with last year in the past few months. However, variations within the field have been great and the amount of electrical works, for instance, has remained close to last year’s level. New construction has increased, thanks particularly to the owners of single-family houses.

The maintenance and servicing market is expected to keep growing in the near future. The market situation is bolstered by the outsourcing of functions, greater demand for services among both companies and private individuals, and the scarcity of international competition.

During the report period, the Nordic company Arla chose YIT to supply the technical systems of its dairy plant extension. A design & build agreement for the design and installation of electrotechnical systems was made with the fibre manufacturer Fiberline, a customer of many years’ standing.

CONSTRUCTION SERVICES

In the January-September period, Construction Services’ revenue rose by 6 per cent compared with the previous year and amounted to EUR 925.3 million (EUR 869.8 million). The maintenance business accounted for 3 per cent of revenue, or EUR 28.4 million. Of the revenue, 79 per cent was generated in Finland and the remaining 21 per cent, or EUR 195.2 million, largely in Russia, Lithuania, Latvia and Estonia.

Operating profit increased by 25 per cent to EUR 107.2 million (EUR 86.0 million). The operating profit margin was 11.6 per cent (9.9%). The order backlog was 27 per cent higher than in the previous year, having risen to EUR 1,193.8 million (EUR 940.0 million). The margin of the order backlog is good. The business segment had 4,937 employees (4,934) at the end of the period.

Demand for housing remains good

Demand for market-financed residences remained good in Finland, the environs of Moscow, St Petersburg and the Baltic countries. Growth in housing prices was restrained in YIT’s market areas in the third quarter. During the past 12 months, the selling prices of the residences built by YIT in the Russian and Baltic markets have averaged slightly under one-third of the prices of market-financed residences sold in Finland.

In the review period, 2,387 (1-9/2004: 1,788) market-financed non- rental residential units were sold in Finland. During the January- September period, the construction of 2,577 (2,099) residential units was started up, of which 2,497 (1,980) were market-financed.
At period’s end, a total of 3,069 (2,889) residential units were under construction, of which 2,937 (2,770) were market-financed.
During the review period, 2,502 (2,429) market-financed residences were completed. There were 182 (234) completed unsold residences at the end of the period.

YIT’s strategic objective is to bolster its position in the construction of leisure sites. The pre-marketing of the holiday homes to be built in Saariselkä commenced during the report period.
This project follows up on the Chalets leisure site built in Ylläs.
The first stage in Ylläs has been seen to completion, and the second stage is ongoing.

Strong demand in the Russian housing market

Demand for housing remained robust in the Russian and Baltic markets and growth in residential construction continued in line with the strategy.

During the review period, 1,683 (785) residential units were sold in Russia, Lithuania, Latvia and Estonia. The construction of 1,269 (3,167) new residences was started up in these countries during the review period. At the end of the period, 4,727 (3,815) residential units were under construction, while the number of residences completed was 667 (199). There were 4 (9) completed unsold residences at the end of September.

A new Housing Code that aims to improve consumer protection has come into force in Russia. It has slowed down or halted the construction projects of many local companies. The statutes ushered in by the Housing Code and the tight liquidity of competitors are expected to improve YIT’s competitiveness and market position in Russia.

Good outlook in residential construction

The market outlook for developer-contracted residential construction is good in all of YIT’s market areas. YIT estimates that it will start up the construction of about 3,000 market- financed residential units in Finland in 2005. The number of housing start-ups in 2004 was 2,717, of which 2,515 were market- financed. It is estimated that over 3,000 residential units will go into construction in Russia and the Baltic countries (start-ups in 2004: 3,873).

In Finland, demand for housing is bolstered by consumers’ belief in the positive development of their own finances and the low interest rate level. The robust development of the economy and the growth of the middle class in Russia and the Baltic countries establish a good operating environment for residential developer contracting.

Land management zeroes in on regional development projects

During the review period, new regional and zoning development projects were a particular focus area in land management. For instance, in the third quarter YIT made a cooperation agreement with the City of Turku for the zoning and implementation of the Raunistula area, which will be developed into a high-quality market- financed residential area.

YIT’s plot reserves, September 30, 2005

                         Building     Capital tied                        rights and        into plot                            zoning    reserves, EUR                        potential,          million                       1,000 m2 of                        floor area Finland                                            Residential                 1,552              149 plots Business premise              788              114 plots Total                                          263                             2,340                                                    Russia and                                         Baltic countries Residential                   705               54 plots                                                    Total                       3,045              317

Construction of business and commercial premises

Competition remained severe in the construction of new business premises and renovation. Demand for new offices remained low in Finland due to the high vacancy rate of premises. During the review period, the Kuriirinmuuri office building project was started up in Vantaa on a developer-contracting basis.  An agreement was made with HUS, the Hospital District of Helsinki and Uusimaa, for the extension of the surgical facilities of the Hyvinkää Hospital.

Demand remained acceptable in the case of retail and logistics premises. During the review period, a contract agreement valued at about EUR 10 million was made for the extension of the Columbus shopping centre in Vuosaari, Helsinki. The construction of a retail store for Lidl Finland Ky began in Turku, as did the construction of a harbour building in Kaskinen.

In Russia, a contract agreement was made with Nokian Tyres for the extension of the Vsevolozhsk tyre factory, which is located close to St Petersburg. The contract is valued at EUR 21.5 million and is slated for completion in July 2006. During the review period, agreements were made in Estonia for the construction of a logistics centre for OU Loginvest in Harju county as well as an office building for Kaitseliit (the Volunteer Defence League) and buildings at the Pirita Harbour in Tallinn. St Petersburg’s Southwest Wastewater Treatment Plant was inaugurated in Russia, and the Jõhvi concert hall, which was implemented under a public- private partnership model, was opened in Estonia.

Renovation

In renovation activities, YIT worked on a construction concept to be provided to building management companies as a product package.
In the case of housing projects, the refurbishing of a premium property into market-financed non-rental housing was started up on Jääkärinkatu street in the centre of Helsinki during the report period. A contract agreement was made with VVO Asunnot Oy concerning the refurbishing of Koy Siilinjärven Kirkkorinne.

Agreements were made in Oulu for the major renovation of the Kuusiluoto upper secondary school and the Oulu Polytechnic.

A partnership agreement on damage refurbishing was made with the insurance company Pohjola Group Plc.

Water supply and environmental construction

The backlog of works in water supply and environmental construction remained good during the report period. An order was landed in Finland for the delivery of a water treatment plant for Vamy Oy in Myllykoski. In Latvia, the construction of the Sloka wastewater treatment plant was initiated for Jurmala Udens. In Sweden, an agreement was made with Svensk Biogas i Linköping AB for the construction of a biogas plant in Norrköping.

Civil engineering

The order backlog of infrastructure construction declined slightly towards the end of the review period. During the period, an agreement was made with the City of Helsinki Public Works Department concerning the stabilization of the new residential area to be located in the Latokartano and Tuomarinkylä area as well as the reconditioning of the former landfill in Myllypuro. An agreement was made with Konevuori Oy concerning open excavation works at the industrial estate under construction in Tolkkinen, Porvoo.

The order backlog grew in the maintenance of routes and areas. The major agreements made during the report period were a regional road maintenance contract in Tampere in 2005-2010 and two regional maintenance contracts for city districts made with the City of Oulu.

INDUSTRIAL AND NETWORK SERVICES

In the January-September period, the revenue of Industrial and Network Services grew by 13 per cent to EUR 291.3 million (EUR 258.1 million). Maintenance and business based on long-term customer agreements accounted for 76 per cent of revenue, while operations in countries other than Finland generated 8 per cent.

Operating profit increased by 40 per cent to EUR 27.9 million (EUR 19.9 million). The operating profit margin was 9.6 per cent (7.7%).
The order backlog at the end of the period amounted to EUR 158.3 million (EUR 203.6 million). In the case of network services, the order backlog is based on customers’ forecasts. At the end of the period, the business segment had 4,275 employees (4,333).

Changes in the organization structure

The Industrial and Network Services business segment was created on June 1, 2005, by merging Services for Industry and Data Network Services. The Industrial and Network Services business segment’s comparative figures for 2004 presented in the Interim Report have been calculated by combining the financial figures of these business segments.

At the beginning of 2006, the business segment will be rounded out with industrial electricity, automation and HEPAC operations, which will be transferred to Industrial and Network Services from YIT Kiinteistötekniikka Oy. The business functions that will be transferred had revenue of EUR 54 million in 2004.

This will forge Industrial and Network Services into a strong player in the implementation, maintenance and development of the technical infrastructure of both industry and network operators.
The business segment focuses on Finland, but revenue growth is sought by expanding Industrial and Network Services’ offerings in YIT’s operating countries.

Moderate growth in demand for industrial projects

The first part of the year was a sedate period for industrial investments. Delays in project start-ups and the strike and labour lockout in the wood processing industry hindered operations until the second half of the year. During the review period, many projects in the wood processing industry were pushed back further.

In Finland, operations centre on small-scale maintenance-related works. In Anjalankoski, piping works were kicked off at Myllykoski Oy’s peroxide bleaching plant, and piping works were started for M- real in Simpele as part of the modernization of a paperboard machine in the SIIKA project. The construction of a parallel natural gas pipeline between Mäntsälä and Sipoo also got under way during the report period. Demand in the marine industry has seen buoyant growth; current works include machine unit modules for three RoRo vessels for Aker Finnyards at the Rauma shipyard.

Of the large investment projects ongoing in Finland, works on evaporating facility piping were seen to completion in Kaskinen as part of M-real’s Helmi project. Neste Oil’s Diesel project generated significantly more work in August-September, when installation works and engineering workshops were in high gear and, at the same time, a major shutdown was carried out at the refinery so that maintenance works could be carried out. During the report period, Neste Oil ordered substantial tank deliveries for the Diesel and Biodiesel projects; the deliveries will be made in the winter and spring.

In power plant projects, domestic demand remains slight and the bulk of the order backlog goes to export. Tank deliveries are also seeing good export demand. The main export project comprises piping systems for a large combined cycle gas power plant in Gothenburg, Sweden, on behalf of Demag Delaval Industrial Turbomachinery Ab (Siemens). Other major orders include piping for the Östrand soda recovery boiler plant in Sweden for Andtriz and SCA as well as boiler modernization works at Fortum AB’s Högdalsverket waste treatment facility. In association with YIT Sverige AB, a significant boiler conversion project has been carried out for Öresundskraft in Helsingborg, where the boiler fuel was changed to wood dust.

New agreements in industrial maintenance services

After the more sedate first part of the year, industrial maintenance has been brisk. A great many shutdowns and other maintenance works have been carried out, and operations have got back on track in the forest industry as well. Major instrumentation- related shutdown works were carried out at Neste Oil’s Porvoo refinery towards the end of the period.

Demand remained good in the outsourcing of maintenance services.
YIT seeks to systematically increase its operation and maintenance business. Numerous partnership agreements were made and renewed during the report period thanks to both concerted development efforts and the fact that industry is seeking to hand over maintenance functions to specialized professionals. A three-year partnership agreement on end-to-end maintenance was made with Finnsement. In the forest industry, a partnership agreement was made with SCA Packaging Finland for the maintenance of the Tampere plant and an agreement was made with M-real for the maintenance of the new BCTMP plant in Kaskinen.

Severe price competition between operators speeds up process development

Structural reorganization continued in the telecom field; among other measures, installation functions were outsourced. During the report period, the telephone company Iisalmen Puhelin transferred field operations to YIT. It is estimated that structural reorganization will continue towards the end of the year as well, fuelled by strong cost-savings measures.

Demand was still slight in network construction. On the other hand, after the slow summer season, demand for broadband services grew towards the end of the report period, as expected. Broadband demand is expected to remain good in the near future. However, there are great regional differences.

Price competition between operators remained severe and cost- savings were reflected in the price level of field operations.
Strong outlays will be made on process development and the competitive advantages gained from it in order to ensure cost- effectiveness and the competitiveness of service quality.

OUTLOOK FOR 2006

We estimate that the pre-tax profit also for the last quarter of 2005 will significantly outperform that of the previous year. The outlook for 2006 is favourable. If no significant changes take place in the economic environment, the Group can be expected to improve its earnings.

Helsinki, November 3, 2005

Board of Directors

CONSOLIDATED FINANCIAL STATEMENTS, SEPTEMBER 30, 2005 (Unaudited)

Business segment structure

YIT’s business segment structure was firmed up on June 1, 2005, by merging Services for Industry and Data Network Services to form a single business segment: Industrial and Network Services. YIT’s business operations are now divided into three business segments: Building Systems, Construction Services and Industrial and Network Services. The Industrial and Network Services business segment’s comparative figures for 2004 presented in the Interim Report have been calculated by combining the financial figures of the Services for Industry and Data Network Services business segments.
           IFRS standards

YIT changed over to IFRS (International Financial Reporting Standards) on January 1, 2005. Prior to the adoption of IFRS, YIT’s financial reporting was based on Finnish Accounting Standards (FAS).

The Interim Reports for 2005 are drafted in accordance with IFRS recognition and measurement policies. The comparative figures for 2004 presented in the Interim Reports are also in line with IFRS.

YIT Corporation’s IFRS comparative information for the 2004 financial year and a summary of the major changes were released as a stock exchange release on April 6, 2005. Due to revisions to IFRS standards, the comparative figures presented in the Interim Report differ in some respects from the figures presented in the stock exchange release published on April 6.

The IFRS-based financial information may have to be adjusted before it is included as information on the comparative period in the Group’s first IFRS financial statements, which will be drafted for the financial period ending on December 31, 2005. This is due to the revisions currently being made to IFRS norms.

CONSOLIDATED INCOME STATEMENT (EUR million)

                               IFRS      IFRS    Change,      IFRS                            Jan-Sep/  Jan-Sep/          %  Jan-Dec/                                2005      2004                 2004 Revenue                     2,163.8   2,058.0          5   2,780.1 - of which activities                                              outside Finland               921.0     858.1          7   1,183.2 Operating income and                                               expenses                   -1,985.1  -1,919.3          3  -2,600.7 Depreciation and write-                                            downs                         -16.7     -15.9          5     -22.3 Operating profit              162.0     122.8         32     157.1 % of revenue                    7.5       6.0          -       5.7 Financial income                1.3       1.2          8       1.8 Exchange rate differences       2.6      -0.1         *)      -1.1 Financial expenses            -12.8     -13.6         -6     -18.1 Share of results of                                                affiliates                      0.5         -          -       0.3 Profit before taxes           153.6     110.3         39     140.0 % of revenue                    7.1       5.4          -       5.0 Income taxes                  -40.2     -32.4         24     -39.5 Profit for the report                                              period 1)                     113.4      77.9         46     100.5 % of revenue                    5.2       3.8          -       3.6                                                                    Attributable to                                                    Equity holders of the                                              parent company                112.7      76.9         47      99.1 Minority interests              0.7       1.0        -30       1.4                                                                    Earnings per share                                                 attributable to the equity holders of the parent company Earnings per share, EUR        1.83      1.26         45      1.62 Diluted earnings per                                               share, EUR                     1.78      1.25         42      1.60

*) Change over 100%

1) Income taxes have been accounted for as a share of the estimated taxes for the entire financial year, calculated in proportion to the result for the review period.

After the changeover to IAS, projects have been booked in the income statement using the principle of degree of completion multiplied by degree of sale.

CONSOLIDATED INCOME STATEMENT (the third quarter of 2005 compared with the second quarter of 2005, EUR million)

                                   IFRS          IFRS      Change,                            Jul-Sep/2005  Apr-Jun/2005            % Revenue                           754.8         745.1            1 - of which activities                                              outside Finland                   326.3         322.2            1 Operating income and                                               expenses                         -682.7        -684.0            - Depreciation and write-                                            downs                              -5.6          -5.7           -2 Operating profit                   66.5          55.4           20 % of revenue                        8.8           7.4            - Financial income                    0.5           0.7          -29 Exchange rate differences           0.5           0.6          -17 Financial expenses                 -4.2          -4.1            2 Profit before taxes                63.6          52.6           21 % of revenue                        8.4           7.1            - Income taxes                      -17.0         -14.0           21 Profit for the report                                              period                             46.6          38.6           21 % of revenue                        6.2           5.2            -                                                                    Attributable to                                                    Equity holders of the                                              parent company                     45.7          38.8           18 Minority interests                  0.9          -0.3           *)                                                                    Earnings per share                                                 attributable to the equity holders of the parent company Earnings per share, EUR            0.74          0.63           17 Diluted earnings per                                               share, EUR                         0.72          0.61           18

*) Change over 100%

CONSOLIDATED BALANCE SHEET (EUR MILLION)

                               IFRS      IFRS    Change,      IFRS                             30 Sep/   30 Sep/          %   31 Dec/                                2005      2004                 2004 ASSETS                                                                                                                                Non-current assets                                                 Property, plant and                                                equipment                      76.1      80.3         -5      81.0 Goodwill                      248.8     248.8          -     248.8 Other intangible assets        15.0      12.1         24      13.1 Investments                     4.3       4.2          2       4.1 Receivables                     8.8       3.8         *)       7.8 Deferred tax assets            20.0      21.1         -5      26.1                                                                    Current assets                                                     Inventories                   672.5     624.5          8     629.3 Trade and other               522.7     477.4          9     469.9 receivables Cash and cash equivalents      53.2      41.8         27      36.1                                                                    Total assets                1,621.4   1,514.0          7   1,516.2                                                                    EQUITY AND LIABILITIES                                                                                                                Equity attributable to                                             equity holders of the parent company Share capital                  62.1      61.2          1      61.3 Other equity                  452.6     357.7         27     380.0                                                                    Minority interests              4.8       3.9         23       4.1                                                                    Total equity                  519.5     422.8         23     445.4                                                                    Non-current liabilities                                            Deferred tax liabilities       27.7      14.9         86      19.9 Pension liabilities            10.6       6.4         63       9.8 Provisions                     30.4      31.2         -3      26.5 Interest-bearing                                                   liabilities                   175.3     227.8        -23     224.0 Other liabilities               3.3       2.9         14       3.7                                                                    Current liabilities                                                Trade and other payables      691.1     613.3         13     601.9 Provisions                     13.8      10.6         30      23.6 Interest-bearing current                                           liabilities                   149.7     184.1        -19     161.4                                                                    Total equity and                                                   liabilities                 1,621.4   1,514.0          7   1,516.2

*) Change over 100%

RECONCILIATION OF PROFIT FOR THE PERIOD (EUR MILLION)

                                      Jan-Sep/            Jan-Dec/                                           2004                2004 Profit for the period                                              according to FAS                          58.8                84.0 IFRS adjustments                                                   Minority interests                         1.0                 1.4 Recognition of revenue                                             by reference to the stage                                          of completion (IAS 11)                     0.3                -2.9 Deferred taxes (IAS 12)                   -6.6                -6.4 Provisions (IAS 37)                        1.3                -6.8 Goodwill amortization                                              (IAS 38)                                  22.5                30.4 Other items 2)                             0.6                 0.8 Total IFRS adjustments                    19.1                16.5 Profit for the period                                              according to IFRS                         77.9               100.5

2) Other items affecting the determination of net profit include finance leasing, options and affiliates that become subsidiaries.

RECONCILIATION OF SHAREHOLDERS’ EQUITY (EUR MILLION)

                                       Sep 30/              Dec 31/                                           2004                 2004 Shareholders’ equity                                                according to FAS                         431.4                457.2 IFRS adjustments                                                    Minority interests                         3.9                  4.1 Recognition of revenue                                              by reference to the stage                                           of completion (IAS 11)                   -14.6                -17.8 Deferred taxes (IAS 12)                    6.9                  7.1 Provisions (IAS 37)                      -25.7                -33.8 Goodwill amortization                                               (IAS 38)                                  17.7                 25.6 Other items 3)                             3.2                  3.0 Total IFRS adjustments                    -8.6                -11.8 Shareholders’ equity                                                according to IFRS                        422.8                445.4

3) Other items affecting the determination of shareholders’ equity include finance leasing, options and pension liabilities.

 EFFECTS OF IAS 32 AND IAS 39 ADJUSTMENTS (EUR MILLION)

IAS 32 and 39 have been adopted as from January 1, 2005.

Shareholders’ equity according             to IFRS on Dec 31, 2004              445.4 Effects of the transition to               IAS 32 and 39 Measurement of loans (IAS 39)         -0.7 Total adjustments                     -0.7 Shareholders’ equity                       on Jan 1, 2005                       444.7 Dividends paid                       -42.9 Result for the period                112.7 Conversion of options to shares        0.8 Profits from option issue              4.3 Change in the translation             -1.6 difference fund Other changes                          1.5 Shareholders’ equity                       on Sep 30, 2005                      519.5

The accounting policy applied in the YIT Group’s IFRS financial statements for 2004 and 2005 were presented in a stock exchange release published on April 6, 2005.

CONSOLIDATED CASH FLOW STATEMENT (EUR million)

                               IFRS      IFRS    Change,      IFRS                            Jan-Sep/  Jan-Sep/          %  Jan-Dec/                                2005      2004                 2004 Cash flows from operating                                          activities Profit for the report                                              period                        113.4      77.9         46     100.5 Reversal of accrual-based                                          items                          65.6      60.6          8      77.8 Change in working capital      -5.2     -60.9        -91     -57.6 Interest paid                 -13.6     -13.7         -1     -20.6 Interest received               0.5       1.0        -50       1.1 Taxes paid                    -27.0     -23.1         17     -32.5 Net cash used in                                                   operating activities 4)       133.7      41.8         *)      68.7                                                                    Cash flows from investing                                          activities Purchases of property,                                             plant and equipment           -17.6     -19.1         -8     -27.6 Purchases of intangible                                            assets                         -4.4      -2.0         *)      -3.5 Proceeds from disposal of                                          property, plant and                                                equipment                       4.8       4.3         12       6.3 Proceeds from disposal of                                          intangible assets               0.4       0.1         *)       0.2 Effects of the changes in                                          exchange rates                 -0.4      -0.7          -      -1.6 Net cash used in                                                   investing activities          -17.2     -17.4          -     -26.0                                                                    Cash flows from financing                                          activities Proceeds from issue of                                             share capital                   5.1       0.9         *)       1.6 Decrease in loans                                                  receivable                      0.3       2.1        -86       2.2 Proceeds from borrowings        1.2      59.8        -98      37.9 Repayment of borrowings       -58.7     -67.1        -13     -68.7 Payment of financial           -4.4      -3.2         38      -4.3 leasing debts Dividends paid                -42.9     -36.6         17     -36.6 Net cash used in                                                   financing activities 4)       -99.4     -44.1         *)     -67.9                                                                    Changes in cash and cash                                           equivalents                    17.1     -19.7         *)     -25.4 Cash and cash equivalents                                          at beginning of period         36.1      61.5        -41      61.5 Cash and cash equivalents                                          at end of period               53.2      41.8         27      36.1

*) Change over 100%

4) The change in the treatment of balance sheet items in developer contracting affects the classification of the cash flow statement compared with FAS.

KEY FIGURES

                                   IFRS     IFRS  Change,     IFRS                                    Sep/     Sep/        %     Dec/                                    2005     2004              2004 Earnings per share, EUR            1.83     1.26       45     1.62 Diluted earnings per share,                                        EUR                                1.78     1.25       42     1.60 Equity per share, EUR              8.28     6.85       21     7.20 Average share price during                                         the period, EUR                   26.09    15.78       65    15.92 Share price at end of                                              period, EUR                       35.30    15.85       *)    18.36 Market capitalization at                                           end of period, EUR million      2,193.2    969.7       *)  1,125.3 Weighted average share-                                            issue adjusted number of                                           shares outstanding,                                                thousands                        61,628   61,095        1   61,123 Weighted average share-                                            issue adjusted number of                                           shares outstanding,                                                thousands, diluted               63,173   61,711        2   61,823 Share-issue adjusted number                                        of shares outstanding at                                           end of period, thousands         62,130   61,179        2   61,293 Net interest-bearing debt                                          at end of period,                                                  EUR million                       271.8    370.1      -27    349.3 Return on investment, % 5)         23.7        -        -     19.2 Equity ratio, %                    34.6     30.2        -     31.0 Gearing ratio, %                   52.3     87.5        -     78.4 Gross capital expenditures,        22.3     24.3       -8     35.6 EUR million -% of revenue                       1.0      1.4        -      1.3 Order backlog at end of                                            period, EUR million 6)          1,881.4  1,708.2       10  1,823.4 - of which order backlog          722.6    613.6       18    645.0 outside Finland Average personnel                21,330   22,012       -3   21,884

5) Calculated for the period from October 1, 2004 - September 30, 2005, using the balance sheet figures at September 30, 2004, and September 30, 2005. No comparative figure for 2004 is available.

6) Portion of binding orders not recognized as income.

CONTINGENT LIABILITIES (EUR million)

                                   IFRS     IFRS  Change,     IFRS                                    Sep/     Sep/        %     Dec/                                    2005     2004              2004 Repurchase commitments            235.2    181.6       30    184.5

COMMITMENTS (EUR million)

                                   IFRS     IFRS  Change,     IFRS                                    Sep/     Sep/        %     Dec/                                    2005     2004              2004 Collateral given for own                                           commitments - Corporate mortgages              29.3     29.3        -     29.3 Other commitments                                                  - Guarantees on behalf of             -      0.7        -        - affiliates - Guarantees on behalf of                                          others                              0.9      2.6      -65      2.5 -- Leasing commitments 7)          32.3     45.0      -28     40.2 - Lease liabilities                 5.7        -        -        - -- Other commitments                0.5      0.6      -17      0.6 Liability under derivative                                         contracts 8) - Value of underlying                                              instruments -- Interest rate options            0.7        -        -        - -- Interest rate swaps             70.0     70.0        -     70.0 -- Foreign currency                                                forward contracts                  28.9     70.1      -59     56.7 - Market value                                                     -- Interest rate options            0.5        -        -        - -- Interest rate swaps             69.3     69.5        -     69.2 -- Foreign currency                                                forward contracts                  29.6     68.2      -57     54.4

7) Leasing commitments classified as finance leasing are also included in the balance sheet.

8) Derivative contracts have been taken out mainly to hedge foreign currency loans and foreign currency cash flows from projects.

REVENUE BY BUSINESS SEGMENT (EUR million)

                                 IFRS      IFRS   Change,     IFRS                              Jan-Sep/  Jan-Sep/         % Jan-Dec/                                  2005      2004               2004 Building                                                           Systems                         994.7     962.7         3  1,321.2 Construction                                                       Services                        925.3     869.8         6  1,147.2 Industrial and                                                     Network Services                291.3     258.1        13    359.0 Other items                     -47.5     -32.6        46    -47.3 YIT Group,                                                         total                         2,163.8   2,058.0         5  2,780.1

OPERATING PROFIT BY BUSINESS SEGMENT (EUR MILLION)

                                 IFRS      IFRS   Change,     IFRS                              Jan-Sep/  Jan-Sep/         % Jan-Dec/                                  2005      2004               2004 Building                                                           Systems                          35.8      20.4        75     34.1 Construction                                                       Services                        107.2      86.0        25    101.9 Industrial and                                                     Network Services                 27.9      19.9        40     27.5 Other items                      -8.9      -3.5        *)     -6.4 YIT Group,                                                         total                           162.0     122.8        32    157.1

*) Change over 100%

ORDER BACKLOG BY BUSINESS SEGMENT AT END OF PERIOD (EUR MILLION)

                                 IFRS      IFRS   Change,     IFRS                                  Sep/      Sep/         %     Dec/                                  2005      2004               2004 Building                                                           Systems                         575.7     564.6         2    557.8 Construction                                                       Services                      1,193.8     940.0        27  1,066.4 Industrial and                                                     Network Services                158.3     203.6       -22    199.2 Other items                     -46.4         -         -        - YIT Group,                                                         total                         1,881.4   1,708.2        10  1,823.4

QUARTERLY FIGURES, Q1/2004-Q3/2005

                IFRS    IFRS    IFRS    IFRS     IFRS    IFRS    IFRS                  Q1/     Q2/     Q3/     Q4/      Q1/     Q2/     Q3/                 2004    2004    2004    2004     2005    2005    2005                                                                Revenue, MEUR  669.9   729.2   658.9   722.1    663.9   745.1   754.8 Operating profit,                                                     MEUR            37.5    37.9    47.4    34.3     40.1    55.4    66.5 - % of revenue   5.6     5.2     7.2     4.8      6.0     7.4     8.8 Financial income,                                                     MEUR 1)          0.4     0.5     0.3     0.9      0.3     0.7     0.8 Exchange rate                                                         differences,  MEUR             0.2     0.3    -0.6    -1.0      1.5     0.6     0.5 Financial expenses,                                                   MEUR            -4.7    -4.9    -4.0    -4.5     -4.5    -4.1    -4.2 Profit before                                                         taxes, MEUR     33.4    33.8    43.1    29.7     37.4    52.6    63.6 - % of revenue   5.0     4.6     6.5     4.1      5.6     7.1     8.4                                                                       Balance sheet                                                         total, MEUR  1,465.3 1,506.1 1,514.0 1,516.2  1,508.2 1,612.2 1,621.4                                                                                                   Earnings per share,                                                   EUR             0.36    0.36    0.54    0.36     0.46    0.63    0.74 Equity per share,      EUR		5.96    6.32    6.85    7.20     6.95    7.53    8.28 Share price at end                                                    of period, EUR 15.40   16.74   15.85   18.36    21.84   27.60   35.30 Market                                                                capitalization                                                        at end of period,   EUR million    940.1 1,023.8   969.7 1,125.3  1,338.6 1,711.2 2,193.2                                                                                         Return on                                                             investment,                                                           from the last     2)      2)      2)    19.2     19.7    21.8    23.7 12 months, % Equity ratio, % 26.7    27.6    30.2    31.0     30.1    31.8    34.6 Net interest-                                                         bearing debt at end                                                   of period,  MEUR           379.1   397.4   370.0   349.3    368.1   313.6   271.8 Gearing ratio,  %              103.1   101.7    87.5    78.4     85.6    66.6    52.3                                                                       Gross capital                                                         expenditures,                                                         EUR million      7.3    19.0    24.3    35.6      7.0    14.1    22.3 Order backlog at                                                      end of period,  MEUR         1,585.2 1,722.2 1,708.2 1,823.4  1,909.4 1,999.2 1,881.4                          Personnel at end                                                      of period     21,654  21,952  22,013  21,680   21,096  21,297  21,468

1) Includes results of affiliates.
2) Comparative IFRS information is not available.

REVENUE BY BUSINESS SEGMENT (EUR million)

                      IFRS   IFRS   IFRS   IFRS    IFRS   IFRS   IFRS                        Q1/    Q2/    Q3/    Q4/     Q1/    Q2/    Q3/                       2004   2004   2004   2004    2005   2005   2005                                                                Building                                                              Systems              316.1  335.7  310.9  358.5   319.5  348.0  327.2 Construction                                                          Services             288.3  315.5  266.0  277.4   272.0  313.8  339.5 Industrial and                                                        Network Services      74.8   90.2   93.1  100.9    85.6  100.7  105.0 Other items           -9.3  -12.2  -11.1  -14.7   -13.2  -17.4  -16.9 YIT Group,                                                            total                669.9  729.2  658.9  722.1   663.9  745.1  754.8

OPERATING PROFIT BY BUSINESS SEGMENT (EUR million)

                      IFRS   IFRS   IFRS   IFRS    IFRS   IFRS   IFRS                        Q1/    Q2/    Q3/    Q4/     Q1/    Q2/    Q3/                       2004   2004   2004   2004    2005   2005   2005                                                                Building                                                              Systems                4.5    7.4    8.5   13.7     8.2   14.3   13.3 Construction                                                          Services              32.7   25.4   27.9   15.9    29.4   33.9   43.9 Industrial and                                                        Network Services       1.4    6.5   11.9    7.7     6.3    9.3   12.3 Other items           -1.1   -1.4   -0.9   -3.0    -3.8   -2.1   -3.0 YIT Group,                                                            total                 37.5   37.9   47.4   34.3    40.1   55.4   66.5

ORDER BACKLOG BY BUSINESS SEGMENT AT END OF PERIOD (EUR million)

                IFRS    IFRS    IFRS    IFRS     IFRS    IFRS    IFRS                  Q1/     Q2/     Q3/     Q4/      Q1/     Q2/     Q3/                 2004    2004    2004    2004     2005    2005    2005                                                                Building                                                              Systems        557.2   566.5   564.6   557.8    574.0   602.6   575.7 Construction                                                          Services       842.6   963.0   940.0 1,066.4  1,131.0 1,263.3 1,193.8                                                                   Industrial and                                                        Network  Services       185.4   192.7   203.6   199.2    234.4   187.3   158.3 Other items        -       -       -       -    -30.0   -54.0   -46.4 YIT Group,                                                            total        1,585.2 1,722.2 1,708.2 1,823.4  1,909.4 1,999.2 1,881.4