YIT announces new strategy and financial targets for 2025-2029, introduces a new segment structure
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- Stock Exchange Release
- 25.04.2008 07:00 CET
YIT'S INTERIM REPORT, JANUARY 1 - MARCH 31, 2008:PROFITABLE GROWTH CONTINUED
INTERIM REPORT APR 25, 2008 at 8:00
YIT'S INTERIM REPORT, JANUARY 1 - MARCH 31, 2008: PROFITABLE GROWTH CONTINUED
- Revenue increased by 11 per cent to EUR 927,0 million (1-3/2007: EUR 833.5 million). - Operating profit increased by 28 per cent to EUR 78,6 million (EUR 61.2 million). - Operating profit margin was 8.5 (7.3%). - Profit before taxes increased by 28 per cent to EUR 70,3 million (EUR 54.8 million). - Return on investment was 28.1% (25.4%). - Order backlog increased by 21 per cent to EUR 3,627.0 million (EUR 2,995.4 million). - Number of personnel at the end of March was 23,644.
We estimate that the revenue and profit before taxes for 2008 will increase compared to the previous year. The estimate has not been changed since the publication of the Financial Statements Bulletin.
- The Group's profitable growth continued. Building Systems is the largest segment by personnel and revenue and it also generates a considerable proportion of operating profit. Increasing the profitability of Building Systems continued strongly. With regard to our geographic areas of operations, Russia grew at the fastest rate. The profitability of International Construction Services remained good with a strong growth in revenue, despite the weakening of the Baltic market. In Construction Services Finland business premise and infrastructure construction continued stable while housing construction slowed down. In housing production we made a decision that all YIT Homes in Finland will be built as low-energy houses. Industrial Services developed at a steady rate. The strengthening of the order backlog in all segments provides a favourable starting point for the future, says President and CEO Hannu Leinonen.
Information sessions, webcast and conference call
An event for analysts and portfolio managers will be held at YIT's head office on Friday, April 25, at 10:00 am (Finnish time). The address is Panuntie 11, 00620 Helsinki, Finland. A press conference will be held at the same venue at 12:30 pm. Analysts and portfolio managers may also participate in the event through a conference call. Participants are asked to call the assigned number +44 (0)20 7162 0025 a minimum of 5 minutes before the conference call begins.
A webcast of the presentation given by President and CEO Hannu Leinonen at the analyst and portfolio manager event can be viewed live at www.yitgroup.com/webcast. The webcast replay will be available at the same address starting at approximately 12:00 pm.
The Interim Report for January-June will be published on July 25, 2008, and the Interim Report for January-September on October 29, 2008. Financial reports and other investor information can be viewed on YIT's Internet site, www.yitgroup.com. A copy of the Interim Report may be ordered via the Internet site, by e-mail to InvestorRelations@yit.fi or by telephone on +358 20 433 2467.
YIT CORPORATION
Hannu Leinonen President and CEO
For further information, please contact: Sakari Ahdekivi, Chief Financial Officer, +358 20 433 2258, sakari.ahdekivi@yit.fi Petra Thorén, Senior Vice President, Investor Relations, +358 40 764 5462, petra.thoren@yit.fi
Distribution: OMX Nordic Exchange Helsinki, main media, www.yit.fi YIT CORPORATION'S INTERIM REPORT, JANUARY 1 - MARCH 31, 2008
REVENUE INCREASED BY 11 PER CENT
YIT Group's revenue for January-March increased by 11 per cent on the previous year, without significant acquisitions, to EUR 927.0 million (1-3/2007: EUR 833.5 million). Building Systems is the largest segment by revenue. Revenue increased the most in International Construction Services with the expansion of operations in Russia.
Finland accounted for 48% of revenue (55%), other Nordic countries for 34% (33%), Russia for 12% (6%) and Lithuania, Estonia and Latvia for 6% (6%). The fastest growth took place in Russia, where revenue increased by 128% to EUR 109.9 million (EUR 48.1 million).
Revenue by segment (MEUR)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, % | Proportion | | | | | | of the | | | | | | Group's | | | | | | revenue for | | | | | | 1-3/2008 | -------------------------------------------------------------------------------- | Building Systems | 418.1 | 367.7 | 14% | 45% | -------------------------------------------------------------------------------- | Construction Services | 284.9 | 291.5 | -2% | 31% | | Finland | | | | | -------------------------------------------------------------------------------- | International | 154.3 | 79.3 | 95% | 16% | | Construction Services | | | | | -------------------------------------------------------------------------------- | Industrial Services*) | 90.9 | 110.7 | -18% | 10% | -------------------------------------------------------------------------------- | Other items | -21.2 | -15.7 | 35% | -2% | -------------------------------------------------------------------------------- | YIT Group, total | 927.0 | 833.5 | 11% | 100% | --------------------------------------------------------------------------------
*) The figures for 1-3/2007 include the Network Services division, which was sold on December 31, 2007. Network Services revenue for 1-12/2007 was EUR 77 million.
YIT's service chain covers the entire investment life cycle. Extending operations to cover the entire life cycle enables more comprehensive service entities and supports the stability of business operations. Service and maintenance of buildings, industry and traditional infrastructure - operations that are not sensitive to economic fluctuations - account for a significant proportion of the Group's revenue. While the Group's revenue has increased, the share of the maintenance and servicing business has remained stable. In January-March, service and maintenance operations generated EUR 315.3 million (EUR 299.7 million), in other words 34% (36%) of total revenue.
YIT Group's strategic annual growth target is 10 per cent on average. In addition, YIT has set a separate objective of increasing its revenue in Russia by 50 per cent on average in 2006-2009.
OPERATING PROFIT INCREASED BY 28 PER CENT
The Group's operating profit increased by 28 per cent on the previous year to EUR 78.6 million (EUR 61.2 million). Operating profit margin improved to 8.5% (7.3%). Return on investment improved to 28.1% (25.4%).
In Building Systems the operating profit growth was strong and profitability was improved by paying particular attention to the development of the business and service structure and operational methods. The profitability of International Construction Services remained good with a strong growth in revenue. The operating profit margin in Construction Services Finland remained excellent.
Operating profit by segment (MEUR)
-------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | Change | Proportion | | | 2008 | 2007 | | of | | | | | | the Group's | | | | | | operating | | | | | | profit | | | | | | 1-3/2008 | -------------------------------------------------------------------------------- | Building Systems | 26.3 | 18.8 | 40% | 33% | -------------------------------------------------------------------------------- | Construction Services | 35.4 | 35.6 | -1% | 45% | | Finland 1) | | | | | -------------------------------------------------------------------------------- | International | 16.1 | 5.6 | 188% | 20% | | Construction Services | | | | | -------------------------------------------------------------------------------- | Industrial Services 2) | 5.2 | 5.0 | 4% | 7% | -------------------------------------------------------------------------------- | Other items | -4.4 | -3.8 | 16% | -5% | -------------------------------------------------------------------------------- | YIT Group, total | 78.6 | 61.2 | 28% | 100% | --------------------------------------------------------------------------------
Operating profit margin by segment
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | -------------------------------------------------------------------------------- | Building Systems | 6.3% | 5.1% | -------------------------------------------------------------------------------- | Construction Services Finland 1) | 12.4% | 12.2% | -------------------------------------------------------------------------------- | International Construction Services | 10.4% | 7.1% | -------------------------------------------------------------------------------- | Industrial Services 2) | 5.7% | 4.5% | -------------------------------------------------------------------------------- | YIT Group, total | 8.5% | 7.3% | --------------------------------------------------------------------------------
1) The Supreme Court issued its ruling on disputes connected with the renovation of SOK's former head office building on March 10, 2008. The ruling had a positive effect of EUR 3.5 million on the Construction Services Finland operating profit for 1-3/2008.
2) The operating profit for the Industrial Services for 1-3/2007 includes EUR -1.0 million due to costs from restructuring of the Network Services division. The Network Services was divested on December 31, 2007.
The strategic target for operating profit margin is 9 per cent. The strategic target for return on investment is 22 per cent.
PROFIT BEFORE TAXES INCREASED BY 28 PER CENT
Profit before taxes increased by 28% to EUR 70.3 million (EUR 54.8 million). Earnings per share increased by 29 per cent to EUR 0.40 (EUR 0.31).
Financial expenses increased as a result of higher interest rates, increased loans and an increase in the amount of capital invested in Russia. Growth in Russia ties capital up in business growth, land acquisition and development and ongoing production.
ORDER BACKLOG GREW BY 21 PER CENT
The Group's order backlog is solid, and at the end of the period it was 21% larger than the year before, reaching EUR 3,627.0 million (EUR 2,995.4 million).
At the end of 2007 the order backlog amounted to EUR 3,509.3 million. The order backlog has a healthy margin.
The order backlog strengthened across all segments. The International Construction Services and Construction Services Finland segments account for the majority of the order backlog due to the long duration and high value of the projects and service agreements. In Russia, the duration of housing projects is approximately twice as long compared to Finland. Residential development accounts for the majority of the order backlog of International Construction Services. The order backlog of Construction Services Finland is distributed extensively and evenly across different business areas. The order backlog also increased considerably in Building Systems in January-March.
Order backlog by segment (MEUR)
-------------------------------------------------------------------------------- | | 3/ | 3/ | Change | Proportion | | | 2008 | 2007 | | of | | | | | | the Group's | | | | | | order | | | | | | backlog | | | | | | 3/2008 | -------------------------------------------------------------------------------- | Building Systems | 825.3 | 670.3 | 23% | 23% | -------------------------------------------------------------------------------- | Construction Services | 1,306.4 | 1,026.1 | 27% | 36% | | Finland | | | | | -------------------------------------------------------------------------------- | International | 1,381.7 | 1,111.8 | 24% | 38% | | Construction Services | | | | | -------------------------------------------------------------------------------- | Industrial Services *) | 224.3 | 228.8 | -2% | 6% | -------------------------------------------------------------------------------- | Other items | -110.7 | -41.6 | 166% | -3% | -------------------------------------------------------------------------------- | YIT Group, total | 3,627.0 | 2,995.4 | 21% | 100% | --------------------------------------------------------------------------------
*) Order backlog 3/2007 includes the Network Services division, which was sold on December 31, 2007.
The order backlog includes that portion of customer orders and ongoing development projects that has not been entered as income. In accordance with the IFRS accounting principles, residential development projects are recognised as income using the formula percentage of completion multiplied by percentage of sale. Business premise development projects are recognised as income using the principle percentage of completion multiplied by percentage of sale multiplied by occupancy rate. Projects are recognised as income based on the percentage of completion.
The order backlog of the Construction Services Finland and International Construction Services segments comprises contracting production and real estate and residential development with a sales risk. Contracted projects are sold in full. Business premise development projects are sold to investors either prior to construction or during an early phase thereof.
Approximately 62 per cent of Building Systems revenue and 48 per cent of Industrial Services revenue are derived from steadily growing service and maintenance operations. Due to their nature, part of the maintenance and servicing operations are not included in the order backlog. The remainder of the order backlog of these business segments mainly comprises contracted projects that have been sold in full.
THE GROUP'S FINANCIAL POSITION REMAINED BALANCED
The Group's financial position remained balanced. Cash flow from operations improved. The majority of YIT's business operations require little capital. Capital was particularly tied to the plot reserves in Russia, their development and ongoing production.
Gearing ratio improved to 60.6% (85.6%). Net debt was EUR 462.7 million (EUR 540.9 million). The amount of net debt was affected by the dividend payout date, which occurred after the reporting period. Dividends of EUR 101.8 million were paid on April 2, 2008. In 2007, the date of dividend payout occurred during the January-March reporting period, on March 28, 2007.
Net financial expenses were EUR 8.3 million (EUR 6.4 million), or 0.9 per cent (0.8%) of revenue.
The balance sheet total at the end of the review period was EUR 2,525.8 million (EUR 2,155.9 million).
The Group's equity ratio was 33.3 per cent (31.8%). The target level for the equity ratio is 35 per cent.
CAPITAL EXPENDITURES AND ACQUISITIONS
Gross capital expenditures on non-current assets included in the balance sheet totalled EUR 11.8 million (EUR 15.8 million) during January-March, representing 1.3 per cent (1.9%) of revenue. Investments in construction equipment amounted to EUR 1.8 million (EUR 5.8 million) and investments in information technology to EUR 2.3 million (EUR 1.3 million). Other investments including acquisitions amounted to EUR 7.7 million (EUR 8.7 million). In January-March, business operations were supplemented by way of three minor business acquisitions in Sweden, Norway and Finland in the Building Systems segment. Acquired business operations are disclosed in the notes to the Interim Report.
CHANGES IN GROUP STRUCTURE
YIT Group's business segment structure was revised as of the beginning of 2008, with Construction Services being divided into two segments: Construction Services Finland and International Construction Services, which includes the business operations in Russia and the Baltic countries. The comparable figures for 2007 according to the new business segment structure were disclosed in a stock exchange release on March 17, 2008. The Industrial and Network Services segment was renamed Industrial Services when the sale of the Network Services unit was completed on December 31, 2007.
CHANGES IN GROUP MANAGEMENT
Kari Kauniskangas, M.Sc. (Eng.) was appointed Director of the International Construction Services segment formed at the beginning of 2008. Ilpo Jalasjoki, M.Sc. (Eng.) was appointed Director of the Construction Services Finland segment.
The Group's Management Board was condensed as of the beginning of 2008. The Management Board comprises the Group's parent company's President and CEO, Executive Vice President, CFO and Presidents of the business segments. The extended Management Board also includes the Senior Vice President, Corporate Communications and Business Development and the Senior Vice President, Investor Relations.
The members of the Group's management are presented on YIT's Internet site.
RESOLUTIONS PASSED AT THE ANNUAL GENERAL MEETING
YIT Corporation's Annual General Meeting was held on March 13, 2008. The Annual General Meeting adopted the 2007 financial statements and discharged the members of the Board of Directors and the President and CEO from liability. It was confirmed that a dividend of EUR 0.80 per share would be paid, or a total of EUR 101.8 million, as proposed by the Board of Directors. March 18, 2008, was set as the record date and April 2, 2008, as the payout date.
The Annual General Meeting resolved to elect a chairman, vice chairman and three ordinary members to the Board of Directors, namely: Reino Hanhinen as Chairman, Eino Halonen as Vice Chairman and Antti Herlin and Teuvo Salminen as members, as well as Kim Gran as a new member. In its first meeting on March 13, 2008, the Board of Directors elected Eino Halonen as the Chairman of the Audit Committee and Teuvo Salminen and Reino Hanhinen as its members.
The Annual General Meeting re-elected PricewaterhouseCoopers Oy, Authorised Public Accountants, to audit the administration and accounts of the current financial period. PricewaterhouseCoopers Oy has appointed Heikki Lassila, Authorised Public Accountant, as chief auditor.
YIT Corporation published stock exchange releases on the resolutions passed at the Annual General Meeting and the organisation of the Board of Directors on March 13, 2008, and March 14, 2008. The members of the Board of Directors are presented on YIT's Internet site.
LEGAL PROCEEDINGS
On March 10, 2008, the Supreme Court in Finland announced its ruling regarding the disputes arising from the refurbishing of SOK's former head office, Kiinteistö Oy Vilhonkatu 7, which was completed in 1999. The ruling had a positive effect of EUR 5.7 million on YIT's profit before taxes. The sum was recognised in full in YIT's result for January-March 2008. The Supreme Court reassessed the amounts of additional and modification works, as well as late payment fines approved by the Helsinki Court of Appeal on 14 February 2006, in a manner diverging from the Court of Appeal's ruling, and thereby reduced the amount of claims payments received by YIT. YIT published a stock exchange release on the matter on March 10, 2008.
NUMBER OF PERSONNEL GREW
The Group employed 23,155 (22,444) people on average during the review period. At the end of the period the Group employed 23,644 (22,418) people. Of YIT's employees, 44 per cent work in Finland, 38 per cent in the other Nordic countries, 12 per cent in Russia and 6 per cent in Lithuania, Estonia and Latvia. The number of personnel has increased considerably in Russia in particular.
Personnel by segment
-------------------------------------------------------------------------------- | | 3/2008 | 3/2007 | Change | % of the | | | | | | Group's | | | | | | employees, | | | | | | 3/2008 | -------------------------------------------------------------------------------- | Building Systems | 12,962 | 11,569 | 12% | 55% | -------------------------------------------------------------------------------- | Construction Services | 3,437 | 3,437 | - | 15% | | Finland | | | | | -------------------------------------------------------------------------------- | International | 3,356 | 2,297 | 46% | 14% | | Construction Services | | | | | -------------------------------------------------------------------------------- | Industrial Services *) | 3,546 | 4,787 | -26% | 15% | -------------------------------------------------------------------------------- | Corporate Services | 343 | 328 | 5% | 1% | -------------------------------------------------------------------------------- | YIT Group, total | 23,644 | 22,418 | 5% | 100% | --------------------------------------------------------------------------------
Personnel by country -------------------------------------------------------------------------------- | | 3/2008 | 3/2007 | Change | % of the | | | | | | Group's | | | | | | employees, | | | | | | 3/2008 | -------------------------------------------------------------------------------- | Finland *) | 10,446 | 11,536 | -9% | 44% | -------------------------------------------------------------------------------- | Sweden | 4,397 | 3,946 | 11% | 19% | -------------------------------------------------------------------------------- | Norway | 3,099 | 2,660 | 17% | 13% | -------------------------------------------------------------------------------- | Russia | 2,847 | 1,355 | 110% | 12% | -------------------------------------------------------------------------------- | Denmark | 1,317 | 1,259 | 5% | 6% | -------------------------------------------------------------------------------- | Lithuania, Estonia, | 1,538 | 1,662 | -7% | 6% | | Latvia | | | | | -------------------------------------------------------------------------------- | YIT Group, total | 23,644 | 22,418 | 5% | 100% | --------------------------------------------------------------------------------
*) As a result of the sale of the Network Services division, approximately 1,000 Finnish employees left YIT, in the Industrial Services segment, at the beginning of 2008.
DEVELOPMENT BY BUSINESS SEGMENT
BUILDING SYSTEMS
- Building Systems' revenue increased by 14% to EUR 418.1 million (EUR 367.7 million). - Service and maintenance operations accounted for 62% (62%) of the segment's revenue. - Operating profit increased by 40 per cent to EUR 26.3 million (EUR 18.8 million). - Operating profit margin improved to 6.3% (5.1%). - Order backlog increased by 23 per cent to EUR 825.3 million (EUR 670.3 million) at the end of March. - At the end of March, the segment employed 12,962 people (11,569).
Business operations were supplemented by way of three minor business acquisitions in Sweden, Norway and Finland. Competence was particularly strengthened with regard to pipework deliveries.
Building Systems revenue by country, MEUR
-------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | Change | % of the | | | 2008 | 2007 | | segment's | | | | | | revenue for | | | | | | 1-3/2008 | -------------------------------------------------------------------------------- | Sweden | 153.8 | 130.1 | 18% | 37% | -------------------------------------------------------------------------------- | Norway | 119.2 | 102.1 | 17% | 29% | -------------------------------------------------------------------------------- | Finland | 93.2 | 86.6 | 8% | 22% | -------------------------------------------------------------------------------- | Denmark | 39.0 | 36.3 | 7% | 9% | -------------------------------------------------------------------------------- | Lithuania, | 12.9 | 12.6 | 2% | 3% | | Estonia, | | | | | | Latvia and | | | | | | Russia | | | | | -------------------------------------------------------------------------------- | Total | 418.1 | 367.7 | 14% | 100% | --------------------------------------------------------------------------------
Good demand continued throughout the operating area
The building system service market development continued favourably in the Nordic countries, and the demand for building system installations was good. In Russia, the building system service market situation remained good. In the Baltic countries, the market was uncertain due to the general economic development, but investments in office, business and logistics premises further increased the demand for building system services.
The implementation of solutions including various building system services was agreed with, e.g., Sysav Biotech AB's power plant and Tarkett AB's factory in Sweden, Posten Eiendom AS's new terminal in Norway and the Vallikallio road tunnel in Espoo, Finland. A total technical solution, comprising the design of various technical solutions, will be delivered to the property company Avantor at Oslo's Nydalen in Norway, through Vedal Entreprenør, and a business premise owned by Tapiola in Finland. In Denmark, agreements concerning installation work were made with the Technical University of Denmark and the logistics centres of Sanistål A/S and the home content retail chain Jysk.
In Russia, a building system delivery agreement was signed with regard to a housing site in St. Petersburg and in Estonia with regard to an office building in Ärikeskus, Emajõgi, both constructed by YIT. The building system installations in the Olaines Logistics Parks logistics centre in Latvia started, as did the delivery of the Maxima supermarket in Lithuania.
Increasing service agreements
There was an increase in building system repair and maintenance work and various service agreements in the Nordic countries. The demand for property management services continued to grow as well. The demand for service and maintenance services increased in Russia. In the Baltic countries, market uncertainty increased.
Long-term maintenance and service agreements were signed with, e.g., Dometic AB and Electrolux in Sweden, and for Tradeka's 130 shops in Finland and the Bank of Finland. Facility management was also agreed on with regard to SATO's rental housing sites in Finland. In Norway, a service and maintenance agreement was signed with Shell and the Norwegian tax authority. Service agreements were renewed in Russia, and a significant agreement on the long-term maintenance of EVLI's logistics centre as a whole was signed in St. Petersburg. All of the service agreements in force in Latvia and Lithuania were renewed at the beginning of the year.
Growing demand for energy services
Increasing attention has been paid to the energy efficiency of buildings and their building systems due to an increase in regulations and energy prices. Energy consumption management is included in several service agreements.
In Sweden, an agreement was made with the Eskilstuna municipality on the alteration of the town's outdoor lighting and an energy-saving system to be installed in residential areas. In Norway, several energy-saving projects kicked off in office buildings within the scope of the ENOVA agreement signed in 2007, making it possible to receive funding from the Norwegian State. In Finland, building system investments which improve energy efficiency are being implemented as an ESCO-project in the Impivaara ice and football stadium in Turku. The costs will be funded by the realised energy saving.
CONSTRUCTION SERVICES FINLAND
- Construction Services Finland's revenue remained at the previous year‘s level and was EUR 284.9 million (EUR 291.5 million). - Maintenance business accounted for 6% (5%) of revenue. - Operating profit was EUR 35.4 million (EUR 35.6 million). - Operating profit margin remained excellent, amounting to 12.4 per cent (12.2%) of revenue. - Order backlog increased by 27 per cent to EUR 1,306.4 million (EUR 1,026.1 million). - Construction Services Finland's capital tied into plot reserves amounted to EUR 345.7 million (EUR 333.9 million) at the end of March. - At the end of March, the segment employed 3,437 people (3,437).
The figures for 2007 are comparison figures calculated as the business segment structure changed.
On March 10, 2008, the Supreme Court issued its ruling on disputes connected with the renovation of SOK's former head office building. The ruling had a positive effect of EUR 3.5 million on the Construction Services Finland operating profit.
Brisk business premise construction continued
Office, business and logistics premise construction was brisk. In the Helsinki region, the supply of new office premises increased, while their demand remained good because companies invested in the quality of their business premises.
At the beginning of the year YIT launched real estate development projects to construct the Koskelo Trade Park logistics centre in Espoo and a shopping centre in Piispanristi, Turku. In addition, agreements were signed on the development of Siilinjärvi's Vuorela area into a shopping centre and several tender-based projects.
In Helsinki, the renovation of a premise owned by Tapiola started. A building is being renovated and expanded for Indoor Group in Jumalniemi, Kotka.
Housing sales decreased compared to last year
The number of sold residences decreased compared to last year. During the first months of the year, YIT had an exceptionally high number of premium sites on sale, which kept the value of the sales nearly at the previous year's level. Growth in the construction of leisure-time residences and centres continued in different locations in Finland.
A total of 496 (671) residential units were sold in Finland in January-March, 331 (254) were started and 566 (933) were completed. At the end of March there were 2,574 (2,717) residential units under construction and 229 (244) completed but unsold residential units.
The construction of a leisure time entity at Levi was agreed on at the beginning of April. In addition to a hotel there is a possibility to build 300 leisure time residences. The conversion of the Jugendstil building on Vuorimiehenkatu in the centre of Helsinki into premium housing units began.
YIT is adopting low-energy building in its entire housing production in Finland.
All YIT Homes planned in 2008 or later will be built as low-energy houses.
Good demand in civil engineering
The demand for civil engineering remained good. An agreement was signed with the Finnish Road Administration, Uusimaa Region, on a sizeable four-year road construction project to improve the functioning of the Kehä I ring road in Leppävaara, Espoo. The value of the agreement including the traffic control systems is EUR 88 million. An agreement was signed with Turun Seudun Vesi Oy on the construction of a water intake and pre-treatment plant connected with the artificial groundwater.
INTERNATIONAL CONSTRUCTION SERVICES
- International Construction Services' revenue increased by 95 per cent on the previous year to EUR 154.3 million (EUR 79.3 million). - Operating profit increased by 188 per cent to EUR 16.1 million (EUR 5.6 million). - Operating profit margin remained good, amounting to 10.4 per cent (7.1%) of revenue. - Order backlog increased by 24 per cent to EUR 1,381.7 million (EUR 1,111.8 million). - International Construction Services' capital tied into plot reserves amounted to EUR 224.5 million (EUR 155.9 million) at the end of March. - At the end of March, the segment employed 3,356 people (2,297).
The figures for 2007 are comparison figures calculated as the business segment structure changed.
International Construction Services revenue by country, MEUR
-------------------------------------------------------------------------------- | | 1-3/ | 1-3/ | Change | % of the | | | 2008 | 2007 | | segment's | | | | | | revenue for | | | | | | 1-3/2008 | -------------------------------------------------------------------------------- | Russia | 104.5 | 41.6 | 151% | 68% | -------------------------------------------------------------------------------- | Lithuania, | 49.2 | 37.6 | 31% | 32% | | Estonia, | | | | | | Latvia | | | | | -------------------------------------------------------------------------------- | Other | 0.6 | 0.1 | 500% | - | | countries | | | | | -------------------------------------------------------------------------------- | Total | 154.3 | 79.3 | 95% | 100% | --------------------------------------------------------------------------------
Strong demand for residential construction in Russia
YIT has ongoing residential development projects in St. Petersburg, eleven cities in Moscow Oblast, Moscow, Yaroslavl, Yekaterinburg, Rostov-on-Don and Kazan. Housing demand remained strong. The demand is supported by the positive income trends of households and the need to improve the quality of living.
Housing sales remained at the high level of the end of 2007. In January-March, 964 (289) residential units were sold in Russia, 584 (637) were started and 851 (894) were completed. At the end of March there were 9,664 (6,991) residential units under construction. There were 83 (18) completed but unsold residential units. Slight changes in the number of residential units may take place after the start of construction due to the dividing or combining of residences.
The construction of the major residential projects launched in St. Petersburg in 2007 came to full speed. As new line of business, the construction of small houses in Vsevolozhsky, located some 25 km to the east of the city centre, was started.
Residential construction continued in eleven cities in the Moscow Oblast. Maintenance services for completed housing companies was kicked off as part of developing the YIT Dom brand.
In Moscow, the construction of the Aksioma housing site continued. The construction of two residential buildings and a garage continued in Yekaterinburg. The construction of two multi-storey buildings, comprising nearly 400 homes in all, was started in Rostov-on-Don. The first site under construction in Kazan was completed up to a stage where sales could begin.
Business premise development projects in Russia
The business and office premises market continued to grow. Various real estate investors are looking for new investment opportunities in Russia.
In St. Petersburg, the construction of real estate development projects on YIT-owned plots that started at the beginning of 2007 continued. Construction of logistics premises and a production plant continued in Gorelovo, in the vicinity of the St. Petersburg international airport, as did the construction of an office building in the city of St. Petersburg.
Weak market situation in the Baltic countries
The market situation in the Baltic countries was weak. In business premise construction the demand remained reasonable but the competition tightened due to the reduction in residential construction. In Estonia and Lithuania, some public investments were postponed and suspended due to the weakened economic situation.
The market situation in residential production was weak. In Estonia the demand weakened further. In Latvia and Lithuania challenging residential production market situation continued.
In January-March, 283 (122) residential units were sold in Lithuania, Estonia and Latvia, 0 (123) were started and 19 (225) were completed. At the end of March there were 1,309 (1,771) residential units under construction and 74 (0) completed but unsold residential units.
INDUSTRIAL SERVICES
- Industrial Services' revenue amounted to EUR 90.9 million (EUR 110.7 million).
- Service and maintenance operations accounted for 48% (57%) of revenue. - Finland accounted for 91 per cent of revenue, Russia for 3 per cent and other countries for 6 per cent. - Operating profit was EUR 5.2 million (EUR 5.0 million). Operating profit margin improved to 5.7 per cent (4.5%). - Order backlog remained at the previous year's level, amounting to EUR 224.3 million (EUR 228.8 million) at the end of March. - At the end of March, the segment employed 3,546 people (4,787).
The figures for 2007 include the figures for the Network Services division, which was sold on December 31, 2007. The operating profit for 1-3/2007 includes EUR -1.0 million due to restructuring of the Network Services. The order backlog of 3/2007 also includes the order backlog of the Network Services.
Solid demand for industrial maintenance services
The market situation in industrial maintenance services remained favourable. New forms of service were developed during the first months of the year for Botnia's production plants for the maintenance of industrial premises and industrial processes. Botnia Mill Service, a joint venture between YIT and Botnia, is in charge of the maintenance of all Botnia production plants in Finland.
The service agreement concerning Fortum's Loviisa nuclear power plant was renewed during the first quarter.
All Industrial Services maintenance staff members completed industrial safety training during the first months of the year.
Investment projects in energy and mining industries
Demand for industrial investment projects remained solid, particularly in pipework deliveries. Deliveries of tanks, piping systems and heat recovery units were agreed on in Sweden, Portugal and the United Kingdom, for instance. Agreements on new deliveries to export destinations of Finnish forest industry companies were signed as well.
In Finland, investments were made in the energy and mining industries. Ventilation and electricity system works were agreed on in the Talvivaara mine project.
SHARES, SHARE OPTIONS AND SHAREHOLDERS
The company has one series of shares. Each share carries one vote and confers an equal right to a dividend.
Shares in YIT Corporation can be subscribed for under the Series K, L and M share options issued in 2006 between April 1 and November 30, 2008.
Share capital and number of shares
YIT Corporation's share capital was EUR 149,104,766.72 at the beginning of the review period and the number of shares outstanding was 127,217,872. The share capital and number of shares did not change during the review period.
Own shares
YIT Corporation did not hold any of its own shares during the review period. No shares in the parent company were owned by subsidiaries during the period.
Authorisations of the Board of Directors
In accordance with the Companies Act, the General Meeting decides on the buyback and conveyance of shares, as well as any decisions leading to changes in the share capital.
No share issues were organised during the period and the company did not float convertible bonds or bonds with warrants. At the end of the period the Board of Directors did not have valid share issue authorisations or authorisations to issue convertible bonds or bonds with warrants, or to purchase or dispose of the company's own shares.
Trading in the share
The average share price in January-March was EUR 14.94 (EUR 23.73). The highest share price during the period was EUR 18.29 (EUR 27.45), the lowest EUR 11.78 (EUR 19.81). At the end of the period, trading closed at EUR 17.97 (EUR 25.80).
The value of share turnover during the review period was EUR 997.5 million (EUR 1,597.9 million) and share turnover was 66,804,748 (67,591,489) shares. YIT Corporation's market capitalisation at the end of the period was EUR 2,286.1 million (EUR 3,270.8 million).
Increase in non-Finnish ownership
At the beginning of the review period the number of registered shareholders was 15,265 (14,364) and 16,600 (13,635) at the end of the period.
At the beginning of the year, a total of 52.9% (45.9%) of the shares were owned by nominee-registered and non-Finnish investors, while this figure was 51.2% (50.3%) of the total number of YIT shares at the end of the period.
MARKET SITUATION
After the Financial Statements Bulletin published in February, the global market prices of energy, raw materials and food have increased at a higher rate than estimated. The IMF's April estimate of the world's GNP growth is 3.7%, which is 0.5 percentage points lower than in the January estimate. Due to inflation, the European Central Bank's room for rate cuts has decreased and estimates of economic development in Western Europe have weakened. Growth in the euro area will slow down to 1.4% this year and further to 1.2% next year. The outlook for the Nordic countries has not changed. Rapid inflation and increased current account deficits have led to tightened crediting policies in the Baltic countries and the real estate market has become softer.
The IMF expects economic growth in the Nordic countries, excluding Denmark, to continue to outpace the EU average. According to the March estimate of ETLA (The Research Institute of the Finnish Economy), construction in Finland will increase by 4.0% and 3.1% in 2008 and 2009 respectively, even though housing construction will decrease. Residential demand has softened, but migration, increased employment rates and positive income trends ensure stable long-term demand for new housing in Finland and increased renovation of old residential units. This year, growth in business premise construction will outpace residential construction in the Nordic countries. Growth will slacken in exports and industrial output in the Nordic countries, but modernisation requirements will increase the need for industry and energy sector investments and maintenance.
Russia's GNP increased by 8.1% last year. The IMF expects the figures for 2008 and 2009 to be 6.8% and 6.3% respectively. Wages will increase at a twofold rate compared to the growth in the productivity of labour. The Finance Minister estimates that banks' loan business will increase by 40% this year. The Ministry of Economic Development's inflation outlook for 2008 is 9.5%, but most experts expect an inflation of more than 10%. Construction in Russia will see average annual growth of 5 to 6 per cent in Russia in 2008 and 2009. Solid demand for housing in the Russian metropolises will continue in the long-term.
In Estonia, Latvia and Lithuania, estimates of economic growth have gone down considerably in IMF's April outlook. The increase in employment rates slowed down towards the end of last year. Economic growth that has been too high considering the region's resources has led to overheating and accelerated inflation. Rapid inflation is weakening the economic outlook, particularly in Latvia and Estonia.
MAJOR BUSINESS RISKS AND UNCERTAINTIES IN THE NEAR FUTURE
The most significant short-term business risks and uncertainties are connected with the sales risk of the order backlog, the large-scale real estate development projects underway in Russia, and foreseeing and reacting to changes in the operating environment.
The sales risk included in the order backlog is mainly comprised of completed but unsold residential units. Sales risk is managed by adjusting residential start-ups with sales trends. In Russia, sales of residential units mainly take place towards the end of the project, and the construction time is approximately 2 years. In Finland and the Baltic countries, the construction time is approximately a year. A more detailed account of the order backlog structure is presented above under Order backlog. In real estate development projects in Russia, the risks are associated with delivery schedules of projects.
YIT's risk management policy specifies the Group's most significant risks and methods of mitigating strategic and administrative risks. YIT's geographic and business structure balances the impact of economic fluctuation on the Group's revenue and profits.
A more detailed account of YIT's risk management policy and the most significant risks has been published in the Annual Report for 2007 and of financial risks in the notes to the 2007 financial statements.
OUTLOOK FOR 2008
The estimate concerning the improvement of revenue and profit before taxes in 2008 has not been changed since the publication of the Financial Statements Bulletin.
The demand for building system services is solid throughout the market area and the segment's order backlog is good. YIT aims at increasing its market share in building systems in all of the Nordic countries.
In Russia, strong demand for housing continues. YIT's strong backlog and volume of ongoing residential production provide good prerequisites for meeting the targets set for the Russian business.
In Finland, construction remains at a good level on the whole but is more focused on business premise and infrastructure construction that have a strong order backlog. The outlook for residential production has weakened since last summer.
Industrial Services enjoy a good order backlog. Business opportunities are found particularly in outsourcing of industrial maintenance in Finland.
The economic outlook in YIT's business areas remains favourable. Uncertainties in the economy remain but the force of their impact varies between countries.
Consequently, we estimate that the revenue and profit before taxes for 2008 will increase compared to the previous year.
EVENTS AFTER THE REVIEW PERIOD
The disagreement that has arisen in the final financial settlement for the mechanical installation work on production line 4, which was completed at Neste Oil's Porvoo oil refinery in Finland in the summer of 2007, has been brought to the court of arbitration for a decision. YIT published a stock exchange release on the matter on April 1, 2008.
The Series M share options issued in 2006 were made available for trading in OMX Nordic Exchange Helsinki as from April 1, 2008.
Helsinki, April 24, 2008 Board of Directors INTERIM REPORT JAN 1 - MAR 31, 2008: TABLES The information presented in the Interim Report has not been audited.
1. Key figures of YIT Group
Key figures YIT Group figures by quarter Segment information by quarter
2. Consolidated financial statements Jan 1 - Mar 31, 2008
Consolidated income statement Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement
3. Notes
Accounting principles of the Interim Report Financial risk management Segment information Unusual items affecting operating profit Acquired businesses Changes in property, plant and equipment Inventories Notes on equity Interest-bearing liabilities Change in contingent liabilities and assets and commitments Transactions with associated companies Events after the end of the review period
1. KEY FIGURES OF YIT GROUP
KEY FIGURES
-------------------------------------------------------------------------------- | | 3/2008 | 3/2007 | Change % | 12/2007 | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.40 | 0.31 | 29 | 1.77 | -------------------------------------------------------------------------------- | Diluted earnings per share, EUR | 0.40 | 0.31 | 29 | 1.77 | -------------------------------------------------------------------------------- | Equity per share, EUR | 5.97 | 4.95 | 21 | 6.40 | -------------------------------------------------------------------------------- | Average share price during the | 14.94 | 23.73 | -37 | 22.15 | | period, EUR | | | | | -------------------------------------------------------------------------------- | Share price at end of period, | 17.97 | 25.80 | -30 | 14.99 | | EUR | | | | | -------------------------------------------------------------------------------- | Market capitalization at end of | 2,286.1 | 3,270.8 | -30 | 1,907.0 | | period, MEUR | | | | | -------------------------------------------------------------------------------- | Weighted average share-issue | 127,218 | 126,777 | 0 | 126,872 | | adjusted number of shares | | | | | | outstanding, thousands | | | | | -------------------------------------------------------------------------------- | Weighted average share-issue | 127,218 | 127,361 | 0 | 127,028 | | adjusted number of shares | | | | | | outstanding, thousands, diluted | | | | | -------------------------------------------------------------------------------- | Share-issue adjusted number of | 127,218 | 126,777 | 0 | 127,218 | | shares outstanding at end of | | | | | | period, thousands | | | | | -------------------------------------------------------------------------------- | Net interest-bearing debt at | 462.7 | 540.9 | -14 | 514.8 | | end of period, MEUR | | | | | -------------------------------------------------------------------------------- | Return on investment, from the | 28.1 | 25.4 | - | 26.2 | | last 12 months, % | | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 33.3 | 31.8 | - | 36.7 | -------------------------------------------------------------------------------- | Gearing ratio, % | 60.6 | 85.6 | - | 62.9 | -------------------------------------------------------------------------------- | Gross capital expenditures, | 11.8 | 15.8 | -25 | 51.6 | | MEUR | | | | | -------------------------------------------------------------------------------- | % of revenue | 1.3 | 1.9 | - | 1.4 | -------------------------------------------------------------------------------- | Order backlog at end of period, | 3,627.0 | 2,995.4 | 21 | 3,509.3 | | MEUR 1) | | | | | -------------------------------------------------------------------------------- | of which order backlog outside | 2,002.0 | 1,609.0 | 24 | 1,999.2 | | Finland | | | | | -------------------------------------------------------------------------------- | Average number of personnel | 23,155 | 22,444 | 3 | 23,394 | --------------------------------------------------------------------------------
1) Portion of binding orders not recognized as income.
YIT GROUP FIGURES BY QUARTER
-------------------------------------------------------------------------------- | | I/2007 | II/2007 | III/2007| IV/2007 | I/2008 | | | | | | | | -------------------------------------------------------------------------------- | Revenue, MEUR | 833.5 | 939.3 | 906.7 | 1,027.0 | 927.0 | -------------------------------------------------------------------------------- | Operating profit, MEUR | 61.2 | 78.5 | 89.4 | 108.7 | 78.6 | -------------------------------------------------------------------------------- | % of revenue | 7.3 | 8.4 | 9.9 | 10.6 | 8.5 | -------------------------------------------------------------------------------- | Financial income, MEUR | 0.6 | 0.5 | 0.6 | 0.8 | 3.2 | -------------------------------------------------------------------------------- | Exchange rate | -0.1 | -1.6 | 0.5 | -2.6 | -1.1 | | differences, MEUR | | | | | | -------------------------------------------------------------------------------- | Financial expenses, MEUR | -6.9 | -7.6 | -8.1 | -8.4 | -10.3 | -------------------------------------------------------------------------------- | Profit before taxes, | 54.8 | 69.8 | 82.4 | 98.5 | 70.3 | | MEUR | | | | | | -------------------------------------------------------------------------------- | % of revenue | 6.6 | 7.4 | 9.1 | 9.6 | 7.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Balance sheet total, | 2,155.9 | 2,346.1 | 2,418.4 | 2,461.3 | 2,525.8 | | MEUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.31 | 0.42 | 0.47 | 0.57 | 0.40 | -------------------------------------------------------------------------------- | Equity per share, EUR | 4.95 | 5.38 | 5.85 | 6.40 | 5.97 | -------------------------------------------------------------------------------- | Share price at end of | 25.80 | 23.35 | 20.84 | 14.99 | 17.97 | | period, EUR | | | | | | -------------------------------------------------------------------------------- | Market capitalization at | 3,270.8 | 2,963.1 | 2,644.7 | 1,907.0 | 2,286.1 | | end of period, MEUR | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Return on investment, | 25.4 | 25.7 | 25.8 | 26.2 | 28.1 | | from the last 12 months, | | | | | | | % | | | | | | -------------------------------------------------------------------------------- | Equity ratio, % | 31.8 | 32.4 | 33.8 | 36.7 | 33.3 | -------------------------------------------------------------------------------- | Net interest-bearing | 540.9 | 548.9 | 591.4 | 514.8 | 462.7 | | debt at end of period, | | | | | | | MEUR | | | | | | -------------------------------------------------------------------------------- | Gearing ratio, % | 85.6 | 79.8 | 79.1 | 62.9 | 60.6 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Gross capital | 15.8 | 5.8 | 12.0 | 18.0 | 11.8 | | expenditures, MEUR | | | | | | -------------------------------------------------------------------------------- | Order backlog at end of | 2,995.4 | 3,275.2 | 3,172.5 | 3,509.3 | 3,627.0 | | period, MEUR | | | | | | -------------------------------------------------------------------------------- | Personnel at end of | 22,418 | 23,474 | 23,836 | 24,073 | 23,406 | | period | | | | | | --------------------------------------------------------------------------------
SEGMENT INFORMATION BY QUARTER
Revenue by business segment (EUR million)
-------------------------------------------------------------------------------- | | I/2007 | II/2007 | III/2007| IV/2007 | I/2008 | | | | | | | | -------------------------------------------------------------------------------- | Building Systems | 367.7 | 410.3 | 392.3 | 479.7 | 418.1 | -------------------------------------------------------------------------------- | Construction Services | 291.5 | 307.0 | 272.5 | 287.2 | 284.9 | | Finland | | | | | | -------------------------------------------------------------------------------- | International | 79.3 | 115.2 | 139.6 | 152.0 | 154.3 | | Construction Services | | | | | | -------------------------------------------------------------------------------- | Industrial Services 1) | 110.7 | 129.6 | 118.7 | 130.8 | 90.9 | -------------------------------------------------------------------------------- | Other items | -15.7 | -22.8 | -16.4 | -22.7 | -21.2 | -------------------------------------------------------------------------------- | YIT Group, total | 833.5 | 939.3 | 906.7 | 1,027.0 | 927.0 | --------------------------------------------------------------------------------
1) The revenue for 2007 include the Network Services division, which was sold on December 31, 2007. Network Services revenue for 1-12/2007 amounted to EUR 77 million.
Operating profit by business segment (EUR million)
-------------------------------------------------------------------------------- | | I/2007 | II/2007 | III/2007| IV/2007 | I/2008 | | | | | | | | -------------------------------------------------------------------------------- | Building Systems | 18.8 | 25.6 | 26.7 | 41.1 | 26.3 | -------------------------------------------------------------------------------- | Construction Services | 35.6 | 35.5 | 33.4 | 29.0 | 35.4 | | Finland 1) | | | | | | -------------------------------------------------------------------------------- | International | 5.6 | 16.0 | 23.9 | 21.7 | 16.1 | | Construction Services | | | | | | -------------------------------------------------------------------------------- | Industrial Services 2) | 5.0 | 5.8 | 8.1 | 22.3 | 5.2 | -------------------------------------------------------------------------------- | Other items | -3.8 | -4.4 | -2.7 | -5.4 | -4.4 | -------------------------------------------------------------------------------- | YIT Group, total | 61.2 | 78.5 | 89.4 | 108.7 | 78.6 | --------------------------------------------------------------------------------
1) The Supreme Court issued its ruling on disputes connected with the renovation of SOK's former head office building on March 10, 2008. The ruling had a positive effect of EUR 3.5 million on the Construction Services Finland operating profit for 1-3/2008.
2) The operating profit for the Industrial Services for 1-3/2007 includes EUR -1.0 million due to costs from restructuring of the Network Services division. The operating profit for 10-12/2007 includes positive non-recurring items of EUR 14.4 million from the divestment of Network Services division. The Network Services division was divested on December 31, 2007.
Order backlog by business segment at end of period (EUR million)
-------------------------------------------------------------------------------- | | I/2007 | II/2007 | III/2007| IV/2007 | I/2008 | | | | | | | | -------------------------------------------------------------------------------- | Building Systems | 670.3 | 721.8 | 740.5 | 707.7 | 825.3 | -------------------------------------------------------------------------------- | Construction Services | 1,026.1 | 1,193.1 | 1,128.9 | 1,183.8 | 1,306.4 | | Finland | | | | | | -------------------------------------------------------------------------------- | International | 1,111.8 | 1,185.2 | 1,134.4 | 1,462.7 | 1,381.7 | | Construction Services | | | | | | -------------------------------------------------------------------------------- | Industrial Services 1) | 228.8 | 213.6 | 221.7 | 219.2 | 224.3 | -------------------------------------------------------------------------------- | Other items | -41.6 | -38.5 | -53.0 | -64.1 | -110.7 | -------------------------------------------------------------------------------- | YIT Group, total | 2,995.4 | 3,275.2 | 3,172.5 | 3,509.3 | 3,627.0 | --------------------------------------------------------------------------------
1) The order backlog 1/2007, 2/2007 and 3/2007 include the Network Services division, which was divested on December 31, 2007. 2. CONSOLIDATED FINANCIAL STATEMENTS JAN 1 - MAR 31, 2008
CONSOLIDATED INCOME STATEMENT (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Revenue | 927.0 | 833.5 | 11 | 3,706.5 | -------------------------------------------------------------------------------- | of which activities outside | 482.5 | 371.9 | 30 | 1,798.5 | | Finland | | | | | -------------------------------------------------------------------------------- | Operating income and expenses | -841.2 | -766.3 | 10 | -3,342.7 | -------------------------------------------------------------------------------- | Share of results of associated | 0.0 | 0.2 | *) | 1.2 | | companies | | | | | -------------------------------------------------------------------------------- | Depreciation and write-downs | -7.2 | -6.2 | 16 | -27.2 | -------------------------------------------------------------------------------- | Operating profit | 78.6 | 61.2 | 28 | 337.8 | -------------------------------------------------------------------------------- | % of revenue | 8.5 | 7.3 | - | 9.1 | -------------------------------------------------------------------------------- | Financial income 1) | 3.2 | 0.6 | *) | 2.6 | -------------------------------------------------------------------------------- | Exchange rate differences | -0.8 | -0.1 | *) | -3.8 | -------------------------------------------------------------------------------- | Financial expenses | -10.7 | -6.9 | 56 | -31.0 | -------------------------------------------------------------------------------- | Profit before taxes | 70.3 | 54.8 | 28 | 305.6 | -------------------------------------------------------------------------------- | % of revenue | 7.6 | 6.6 | - | 8.2 | -------------------------------------------------------------------------------- | Income taxes | -19.1 | -14.7 | 30 | -77.6 | -------------------------------------------------------------------------------- | Profit for the report period | 51.3 | 40.1 | 28 | 228.0 | -------------------------------------------------------------------------------- | % of revenue | 5.5 | 4.8 | - | 6.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Attributable to | | | | | -------------------------------------------------------------------------------- | Equity holders of the parent | 50.6 | 39.6 | 28 | 224.9 | | company | | | | | -------------------------------------------------------------------------------- | Minority interests | 0.7 | 0.5 | 32 | 3.1 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Earnings per share attributable | | | | | | to the equity holders of the | | | | | | parent company | | | | | -------------------------------------------------------------------------------- | Earnings per share, EUR | 0.40 | 0.31 | 29 | 1.77 | -------------------------------------------------------------------------------- | Diluted earnings per share, EUR | 0.40 | 0.31 | 29 | 1.77 | --------------------------------------------------------------------------------
1) The financial income of the review period includes EUR +2.2 million due to the ruling of the Supreme Court of disputes over the refurbishing of SOK's former head office in Finland.
CONSOLIDATED BALANCE SHEET (EUR million)
-------------------------------------------------------------------------------- | | 3/2008 | 3/2007 | Change, | 12/2007 | | | | | % | | -------------------------------------------------------------------------------- | ASSETS | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current assets | | | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 92.6 | 95.5 | -3 | 92.5 | -------------------------------------------------------------------------------- | Goodwill | 240.6 | 248.8 | -3 | 240.6 | -------------------------------------------------------------------------------- | Other intangible assets | 30.1 | 17.3 | 74 | 27.1 | -------------------------------------------------------------------------------- | Shares in associated companies | 3.6 | 3.0 | 21 | 3.6 | -------------------------------------------------------------------------------- | Investments | 2.5 | 3.4 | -26 | 2.5 | -------------------------------------------------------------------------------- | Receivables | 16.3 | 14.4 | 13 | 15.1 | -------------------------------------------------------------------------------- | Deferred tax assets | 28.7 | 23.1 | 24 | 27.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current assets | | | | | -------------------------------------------------------------------------------- | Inventories | 1,253.7 | 967.0 | 30 | 1,265.0 | -------------------------------------------------------------------------------- | Trade and other receivables | 731.0 | 744.0 | -2 | 727.5 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 126.7 | 39.4 | *) | 60.2 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total assets | 2,525.8 | 2,155.9 | 17 | 2,461.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Equity attributable to equity | | | | | | holders of the parent company | | | | | -------------------------------------------------------------------------------- | Share capital | 149.1 | 146.2 | 2 | 149.1 | -------------------------------------------------------------------------------- | Other equity | 610.0 | 481.4 | 27 | 665.4 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Minority interests | 4.5 | 4.4 | 2 | 3.8 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity | 763.6 | 632.0 | 21 | 818.3 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Non-current liabilities | | | | | -------------------------------------------------------------------------------- | Deferred tax liabilities | 75.0 | 57.1 | 31 | 71.5 | -------------------------------------------------------------------------------- | Pension liabilities | 7.2 | 10.9 | -34 | 7.5 | -------------------------------------------------------------------------------- | Provisions | 34.0 | 34.2 | -1 | 34.2 | -------------------------------------------------------------------------------- | Interest-bearing liabilities | 355.2 | 374.4 | -5 | 356.9 | -------------------------------------------------------------------------------- | Other liabilities | 7.2 | 10.0 | -28 | 1.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Current liabilities | | | | | -------------------------------------------------------------------------------- | Trade and other payables | 1,024.7 | 814.2 | 26 | 928.3 | -------------------------------------------------------------------------------- | Provisions | 24.7 | 17.2 | 44 | 24.8 | -------------------------------------------------------------------------------- | Interest-bearing current | 234.2 | 205.9 | 14 | 218.1 | | liabilities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total equity and liabilities | 2,525.8 | 2,155.9 | 17 | 2,461.3 | --------------------------------------------------------------------------------
*) Change over 100%.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)
-------------------------------------------------------------------------------- | | Share| Share| Legal| Ot- | Cumula-| Fair | Re- | Mino- | Total | | | capi-| pre- | re- | her | tive | value | tained| rity | equity| | | tal | mium | serve| re- | trans- | reser-| ear- | inte- | | | | | re- | | ser-| lation | ve | nings | rest | | | | | serve| | ve | diffe- | | | | | | | | | | | rences | | | | | -------------------------------------------------------------------------------- | Equity | 149.1| 0.0 | 1.0 | 13.9| -9.0 | 2.0 | 657.6 | 3.8 | 818.4 | | on Jan | | | | | | | | | | | 1, 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | Bonus | - | - | - | - | - | - | - | - | - | | issue | | | | | | | | | | -------------------------------------------------------------------------------- | Shares | - | - | - | - | - | - | - | - | - | | subscri- | | | | | | | | | | | bed with | | | | | | | | | | | options | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | - | -1.1 | - | - | - | | in the | | | | | | | | | | | fair | | | | | | | | | | | value of | | | | | | | | | | | interest | | | | | | | | | | | deriva- | | | | | | | | | | | tives | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | -3.8 | - | -0.2 | - | - | | in | | | | | | | | | | | trans- | | | | | | | | | | | lation | | | | | | | | | | | diffe- | | | | | | | | | | | rences | | | | | | | | | | -------------------------------------------------------------------------------- | Employee | - | - | - | - | - | - | 0.8 | - | - | | share | | | | | | | | | | | option | | | | | | | | | | | scheme | | | | | | | | | | -------------------------------------------------------------------------------- | Net | - | - | - | - | - | - | 50.6 | 0.7 | - | | profit | | | | | | | | | | | for the | | | | | | | | | | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | - | - | - | - | - | - | -101.8| | - | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Other | - | - | - | - | - | - | | 0.0 | - | | change | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 149.1| 0.0 | 1.0 | 13.9| -12.8 | 0.9 | 607.0 | 4.5 | 763.6 | | on Mar | | | | | | | | | | | 31, 2008 | | | | | | | | | | -------------------------------------------------------------------------------- | | Share| Share| Legal| Ot- | Cumula-| Fair | Re- | Mino- | Total | | | capi-| pre- | re- | her | tive | value | tained| rity | equity| | | tal | mium | serve| re- | trans- | reser-| ear- | inte- | | | | | re- | |serve| lation | ve | nings | rest | | | | | serve| | | diffe- | | | | | | | | | | | rences | | | | | -------------------------------------------------------------------------------- | Equity | 63.4 | 83.8 | 0.8 | 13. | -4.5 | 1.0 | 512.3 | 3.9 | 674.4 | | on Jan | | | | 7 | | | | | | | 1, 2007 | | | | | | | | | | -------------------------------------------------------------------------------- | Bonus | 82.8 | -82. | - | - | - | - | - | - | - | | issue | | 8 | | | | | | | | -------------------------------------------------------------------------------- | Shares | - | - | - | - | - | - | - | - | - | | subscri- | | | | | | | | | | | bed with | | | | | | | | | | | options | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | - | 0.3 | - | - | - | | in the | | | | | | | | | | | fair | | | | | | | | | | | value of | | | | | | | | | | | interest | | | | | | | | | | | deriva- | | | | | | | | | | | tives | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | -1.2 | - | - | - | - | | in | | | | | | | | | | | trans- | | | | | | | | | | | lation | | | | | | | | | | | diffe- | | | | | | | | | | | rences | | | | | | | | | | -------------------------------------------------------------------------------- | Employee | - | - | - | - | - | - | 1.0 | - | - | | share | | | | | | | | | | | option | | | | | | | | | | | scheme | | | | | | | | | | -------------------------------------------------------------------------------- | Net | - | - | - | - | - | - | 39.6 | 0.5 | - | | profit | | | | | | | | | | | for the | | | | | | | | | | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | - | - | - | - | - | - | -82.5 | | - | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Other | - | -1.0 | 0.2 | 1.0 | - | - | -0.3 | 0.0 | - | | change | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 146.2| 0.0 | 1.0 | 14.7| -5.7 | 1.3 | 470.1 | 4.4 | 632.0 | | on Mar | | | | | | | | | | | 31, 2007 | | | | | | | | | | -------------------------------------------------------------------------------- | | Share| Share| Legal| Ot- | Cumula-| Fair | Re- | Mino- | Total | | | ca- | pre- | re- | her | tive | value |tained | rity | equity| | | pital| mium | serve| re- | trans- | reser-| ear- | inte- | | | | | re- | |serve| lation | ve | nings | rest | | | | | serve| | | diffe- | | | | | | | | | | | rences | | | | | -------------------------------------------------------------------------------- | Equity | 63.4 | 83.8 | 0.8 | 13.7| -4.5 | 1.0 | 512.3 | 3.9 | 674.4 | | on Jan | | | | | | | | | | | 1, 2007 | | | | | | | | | | -------------------------------------------------------------------------------- | Bonus | 82.8 | -82.8| - | - | - | - | - | - | - | | issue | | | | | | | | | | -------------------------------------------------------------------------------- | Shares | 2.9 | - | - | - | - | - | - | - | - | | subscri- | | | | | | | | | | | bed with | | | | | | | | | | | options | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | - | 1.0 | - | - | - | | in the | | | | | | | | | | | fair | | | | | | | | | | | value of | | | | | | | | | | | interest | | | | | | | | | | | deriva- | | | | | | | | | | | tives | | | | | | | | | | -------------------------------------------------------------------------------- | Change | - | - | - | - | -4.5 | - | -1.3 | - | - | | in | | | | | | | | | | | trans- | | | | | | | | | | | lation | | | | | | | | | | | diffe- | | | | | | | | | | | rences | | | | | | | | | | -------------------------------------------------------------------------------- | Employee | - | -1.0 | - | 0.2 | - | - | 4.2 | - | - | | share | | | | | | | | | | | option | | | | | | | | | | | scheme | | | | | | | | | | -------------------------------------------------------------------------------- | Net | - | - | - | - | - | - | 224.9 | 3.1 | - | | profit | | | | | | | | | | | for the | | | | | | | | | | | period | | | | | | | | | | -------------------------------------------------------------------------------- | Dividend | - | - | - | - | - | - | -82.4 | -0.1 | - | | paid | | | | | | | | | | -------------------------------------------------------------------------------- | Other | - | -1.0 | 0.2 | 0.0 | - | | -0.1 | -3.1 | - | | change | | | | | | | | | | -------------------------------------------------------------------------------- | Equity | 149.1| 0.0 | 1.0 | 13.9| -9.0 | 2.0 | 657.6 | 3.8 | 818.4 | | on Dec | | | | | | | | | | | 31, 2007 | | | | | | | | | | --------------------------------------------------------------------------------
CONSOLIDATED CASH FLOW STATEMENT (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Cash flows from operating | | | | | | activities | | | | | -------------------------------------------------------------------------------- | Net profit for the period | 51.3 | 40.1 | 28 | 228.0 | -------------------------------------------------------------------------------- | Reversal of accrual-based items | 34.7 | 27.6 | 26 | 120.5 | -------------------------------------------------------------------------------- | Change in working capital | | | | | -------------------------------------------------------------------------------- | Change in trade and other | -3.9 | -55.0 | -93 | -32.9 | | receivables | | | | | -------------------------------------------------------------------------------- | Change in inventories | 12.3 | 41.8 | -71 | -259.8 | -------------------------------------------------------------------------------- | Change in current liabilities | -21.2 | 22.1 | *) | 118.7 | -------------------------------------------------------------------------------- | Change in working capital, | -12.8 | 8.9 | *) | -174.0 | | total | | | | | -------------------------------------------------------------------------------- | Interest paid | -5.5 | -4.2 | 31 | -27.3 | -------------------------------------------------------------------------------- | Interest received | 3.3 | 0.6 | *) | 2.4 | -------------------------------------------------------------------------------- | Taxes paid | -9.2 | -10.9 | -16 | -66.2 | -------------------------------------------------------------------------------- | Net cash generated from | 61.7 | 62.1 | -1 | 83.4 | | operating activities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flows from investing | | | | | | activities | | | | | -------------------------------------------------------------------------------- | Acquisition of subsidiaries, | -4.5 | -4.3 | 5 | -14.1 | | net of cash | | | | | -------------------------------------------------------------------------------- | Acquisition of shares in | - | - | - | 0.0 | | associated companies | | | | | -------------------------------------------------------------------------------- | Proceeds from sale of shares in | - | - | 0 | 0.4 | | associated companies | | | | | -------------------------------------------------------------------------------- | Purchase of property, plant and | -5.9 | -8.8 | -33 | -28.7 | | equipment | | | | | -------------------------------------------------------------------------------- | Purchase of intangible assets | -1.9 | -1.9 | 0 | -6.4 | -------------------------------------------------------------------------------- | Increases in other investments | -0.1 | -0.5 | -80 | -0.1 | -------------------------------------------------------------------------------- | Disposals of subsidiaries and | - | - | *) | 31.7 | | businesses | | | | | -------------------------------------------------------------------------------- | Proceeds from sale of property, | 0.6 | 0.4 | 60 | 4.4 | | plant and equipment | | | | | -------------------------------------------------------------------------------- | Proceeds from sale of | 1.0 | 0.4 | *) | 0.0 | | intangible assets | | | | | -------------------------------------------------------------------------------- | Net cash used in investing | -10.7 | -14.7 | -27 | -12.9 | | activities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Cash flow from financing | | | | | | activities | | | | | -------------------------------------------------------------------------------- | Proceeds from share issues | - | - | - | 2.9 | -------------------------------------------------------------------------------- | Decrease in loan receivables | - | - | - | 0.1 | -------------------------------------------------------------------------------- | Change in current liabilities | 17.5 | -50.9 | *) | -49.1 | -------------------------------------------------------------------------------- | Proceeds from borrowings | - | 99.9 | *) | 168.1 | -------------------------------------------------------------------------------- | Repayments of borrowings | -1.8 | | | -74.2 | -------------------------------------------------------------------------------- | Payments of financial leasing | -0.1 | -0.3 | -73 | -1.4 | | debts | | | | | -------------------------------------------------------------------------------- | Dividends paid | - | -82.5 | *) | -82.6 | -------------------------------------------------------------------------------- | Net cash used in financing | 15.6 | -33.8 | *) | -36.2 | | activities | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Net change in cash and cash | 66.6 | 13.6 | *) | 34.3 | | equivalents | | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 60.2 | 25.9 | *) | 25.9 | | the beginning of the period | | | | | -------------------------------------------------------------------------------- | Change in the fair value of the | - | -0.1 | *) | 0.0 | | cash equivalents | | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents at | 126.7 | 39.4 | *) | 60.2 | | the end of the period | | | | | --------------------------------------------------------------------------------
*) Change over 100%.
3. NOTES
ACCOUNTING PRINCIPLES OF THE INTERIM REPORT
YIT Corporation's Interim Report for January 1 - March 31, 2008 has been drafted in line with IAS 34: Interim Financial Reporting. YIT has applied the same accounting policy and IFRS standards and interpretations in the drafting of the Interim Report as in its annual financial statements for 2007. The information presented in the Interim Report has not been audited.
FINANCIAL RISK MANAGEMENT
The principles described in the annual financial statements 2007 have been applied in the management of financial risks.
SEGMENT INFORMATION
YIT's business operations are divided into four business segments: Building Systems, Construction Services Finland, International Construction Services and Industrial Services.
Revenue by business segment (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Building Systems | 418.1 | 367.7 | 14 | 1,650.0 | -------------------------------------------------------------------------------- | Construction Services Finland | 284.9 | 291.5 | -2 | 1,158.2 | -------------------------------------------------------------------------------- | International Construction | 154.3 | 79.3 | 95 | 486.1 | | Services | | | | | -------------------------------------------------------------------------------- | Industrial Services 1) | 90.9 | 110.7 | -18 | 489.8 | -------------------------------------------------------------------------------- | Other items | -21.2 | -15.7 | 35 | -77.6 | -------------------------------------------------------------------------------- | YIT Group, total | 927.0 | 833.5 | 11 | 3,706.5 | --------------------------------------------------------------------------------
1) The revenue for 2007 includes the Network Services division, which was sold on December 31, 2007. Network Services revenue for 1-12/2007 amounted to EUR 77 million.
Operating profit by business segment (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Building Systems | 26.3 | 18.8 | 40 | 112.2 | -------------------------------------------------------------------------------- | Construction Services Finland | 35.4 | 35.6 | -1 | 133.5 | | 1) | | | | | -------------------------------------------------------------------------------- | International Construction | 16.1 | 5.6 | 188 | 67.2 | | Services | | | | | -------------------------------------------------------------------------------- | Industrial Services 2) | 5.2 | 5.0 | 4 | 41.2 | -------------------------------------------------------------------------------- | Other items | -4.4 | -3.8 | 16 | -16.3 | -------------------------------------------------------------------------------- | YIT Group, total | 78.6 | 61.2 | 28 | 337.8 | --------------------------------------------------------------------------------
1) The Supreme Court issued its ruling on disputes connected with the renovation of SOK's former head office building on March 10, 2008. The ruling had a positive effect of EUR 3.5 million on the Construction Services Finland operating profit for 1-3/2008.
2) The operating profit for the Industrial Services for 1-3/2007 includes EUR -1.0 million due to costs from restructuring of the Network Services division. The operating profit for 10-12/2007 includes positive non-recurring items of EUR 14.4 million from the divestment of Network Services division. The Network Services division was divested on December 31, 2007.
Order backlog by business segment at end of period (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Building Systems | 825.3 | 670.3 | 23 | 707.7 | -------------------------------------------------------------------------------- | Construction Services Finland | 1,306.4 | 1,026.1 | 27 | 1,183.8 | -------------------------------------------------------------------------------- | International Construction | 1,381.7 | 1,111.8 | 24 | 1,462.7 | | Services | | | | | -------------------------------------------------------------------------------- | Industrial Services 1) | 224.3 | 228.8 | -2 | 219.2 | -------------------------------------------------------------------------------- | Other items | -110.7 | -41.6 | 166 | -64.1 | -------------------------------------------------------------------------------- | YIT Group, total | 3,627.0 | 2,995.4 | 21 | 3,509.3 | --------------------------------------------------------------------------------
1) The order backlog 3/2007 includes the Network Services division, which was divested on December 31, 2007.
UNUSUAL ITEMS AFFECTING OPERATING PROFIT (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | -------------------------------------------------------------------------------- | Construction Services Finland | | | -------------------------------------------------------------------------------- | Legal proceedings | 3.5 | 0.0 | -------------------------------------------------------------------------------- | Industrial Services | | | -------------------------------------------------------------------------------- | Rearrangements | - | -1.0 | -------------------------------------------------------------------------------- | YIT Group, total | 3.5 | -1.0 | --------------------------------------------------------------------------------
1) The Supreme Court issued its ruling on disputes connected with the renovation of SOK's former head office building on March 10, 2008. The ruling had a positive effect of EUR 3.5 million on the Construction Services Finland operating profit for 1-3/2008.
2) The operating profit for the Industrial Services segment for 1-3/2007 includes EUR -1.0 million due to costs from restructuring of the Network Services division. The Network Services division was divested on December 31, 2007.
ACQUIRED BUSINESSES (EUR million)
During the review period small acquisitions were made within Building Systems segment in Finland, Norway and Sweden. Their total purchase price was EUR 5.2 million. Goodwill was allocated to intangible rights.
-------------------------------------------------------------------------------- | | The fair value | Seller's | | | in balance | carrying amount | | | sheet | before the | | | | consolidation | -------------------------------------------------------------------------------- | The effect on balance sheet assets and | | | | liabilities: | | | -------------------------------------------------------------------------------- | Property, plant and equipment | 0.2 | 0.2 | -------------------------------------------------------------------------------- | Intangible assets | 3.5 | 0.0 | -------------------------------------------------------------------------------- | Inventories | 0.9 | 0.9 | -------------------------------------------------------------------------------- | Trade and other receivables | 0.9 | 0.9 | -------------------------------------------------------------------------------- | Cash and cash equivalents | 0.6 | 0.6 | -------------------------------------------------------------------------------- | Other liabilities | -0.9 | -0.9 | -------------------------------------------------------------------------------- | Acquired net assets | 5.2 | 1.7 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | Total consideration | 5.2 | | -------------------------------------------------------------------------------- | Goodwill | 0.0 | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | The effect on cash flow: | | | -------------------------------------------------------------------------------- | Paid in cash | 5.2 | 5.2 | -------------------------------------------------------------------------------- | Cash and cash equivalents in acquired | -0.6 | -0.6 | | entity | | | -------------------------------------------------------------------------------- | Cash flow on acquisitions | 4.6 | 4.6 | --------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, % | -------------------------------------------------------------------------------- | Carrying value at the beginning of | 92.5 | 91.8 | 1 | | period | | | | -------------------------------------------------------------------------------- | Increase | 6.3 | 8.8 | -29 | -------------------------------------------------------------------------------- | Increase through acquisitions | 0.2 | 0.1 | *) | -------------------------------------------------------------------------------- | Decrease | -1.0 | -0.2 | *) | -------------------------------------------------------------------------------- | Decrease through disposals | 0.0 | -0.1 | -67 | -------------------------------------------------------------------------------- | Depreciation and value adjustments | -5.0 | -4.7 | 5 | -------------------------------------------------------------------------------- | Reclassification | -0.4 | -0.2 | *) | -------------------------------------------------------------------------------- | Carrying value at the end of period | 92.6 | 95.5 | -3 | --------------------------------------------------------------------------------
*) Change over 100%.
INVENTORIES (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, % | -------------------------------------------------------------------------------- | Raw materials and consumables | 21.5 | 20.4 | 5 | -------------------------------------------------------------------------------- | Work in progress | 514.4 | 325.8 | 58 | -------------------------------------------------------------------------------- | Land areas and plot owing companies | 570.3 | 520.2 | 10 | -------------------------------------------------------------------------------- | Shares in completed housing and real | 75.2 | 62.9 | 20 | | estate companies | | | | -------------------------------------------------------------------------------- | Advance payments | 71.3 | 32.1 | *) | -------------------------------------------------------------------------------- | Other inventories | 1.0 | 5.6 | -82 | -------------------------------------------------------------------------------- | Total inventories | 1 253.7 | 967.0 | 30 | --------------------------------------------------------------------------------
*) Change over 100%.
NOTES ON EQUITY (EUR million)
-------------------------------------------------------------------------------- | Share capital and share premium | Number of | Share | Share | | reserve | shares, | capital | premium | | | 1000 | | reserve | -------------------------------------------------------------------------------- | Jan 1, 2008 | 127,217,872| 149.1 | 149.1 | | | | | | -------------------------------------------------------------------------------- | Share subscription with options | - | - | - | -------------------------------------------------------------------------------- | Mar 31, 2008 | 127,217,872| 149.1 | 149.1 | | | | | | --------------------------------------------------------------------------------
INTEREST-BEARING LIABILITIES (EUR million)
No new long-term loans were raised during the review period. CHANGE IN CONTINGENT LIABILITIES AND ASSETS AND COMMITMENTS (EUR million)
-------------------------------------------------------------------------------- | | 3/2008 | 3/2007 | Change, % | -------------------------------------------------------------------------------- | Collateral given for own commitments | | | | -------------------------------------------------------------------------------- | Corporate mortgages | 29.3 | 29.3 | 0 | -------------------------------------------------------------------------------- | Pledged shares | 0.0 | 1.5 | *) | -------------------------------------------------------------------------------- | Other commitments | | | | -------------------------------------------------------------------------------- | Repurchase commitments | 208.9 | 246.7 | -15 | -------------------------------------------------------------------------------- | Operating leases | 289.5 | 226.3 | 86 | -------------------------------------------------------------------------------- | Rental guarantees for clients | 7.3 | 6.6 | 11 | -------------------------------------------------------------------------------- | Other contingent liabilities | 1.1 | 0.8 | 38 | -------------------------------------------------------------------------------- | Other guarantees | 12.0 | 0.0 | *) | -------------------------------------------------------------------------------- | Liability under derivative contracts | | | | -------------------------------------------------------------------------------- | Value of underlying instruments | | | | -------------------------------------------------------------------------------- | Interest rate derivatives | 420.0 | 298.2 | 41 | -------------------------------------------------------------------------------- | Foreign currency forward contracts | 260.1 | 242.6 | 7 | -------------------------------------------------------------------------------- | Market value | | | | -------------------------------------------------------------------------------- | Interest rate forward contracts | 0.6 | 2.4 | -75 | -------------------------------------------------------------------------------- | Foreign currency forward contracts | 8.0 | 0.5 | *) | -------------------------------------------------------------------------------- | Contingent assets | | | | -------------------------------------------------------------------------------- | Legal processes | 0.0 | 11.1 | *) | --------------------------------------------------------------------------------
*) Change over 100%.
TRANSACTIONS WITH ASSOCIATED COMPANIES (EUR million)
-------------------------------------------------------------------------------- | | 1-3/2008 | 1-3/2007 | Change, | 1-12/2007 | | | | | % | | -------------------------------------------------------------------------------- | Sales to associated companies | 1.2 | 0.6 | *) | 4.8 | -------------------------------------------------------------------------------- | Purchases from associated | 0.8 | 0.7 | 14 | 40.1 | | companies | | | | | -------------------------------------------------------------------------------- | Trade and other receivables | 0.0 | 0.0 | - | 0.1 | -------------------------------------------------------------------------------- | Trade and other liabilities | 0.2 | 0.0 | *) | 0.8 | --------------------------------------------------------------------------------
*) Change over 100%.
EVENTS AFTER THE END OF THE REVIEW PERIOD
The disagreement that has arisen in the final financial settlement for the mechanical installation work on production line 4, which was completed at Neste Oil's Porvoo oil refinery in Finland in the summer of 2007, has been brought to the court of arbitration for a decision. YIT published a stock exchange release on the matter on April 1, 2008.
The Series M share options issued in 2006 were made available for trading in OMX Nordic Exchange Helsinki as from April 1, 2008.