YIT?S INTERIM REPORT, JANUARY 1 ? SEPTEMBER 30, 2006: ORDER BACKLOG UP 19 PER CENT

 YIT’S INTERIM REPORT, JANUARY 1 – SEPTEMBER 30, 2006: ORDER BACKLOG UP 19 PER CENT

The YIT Group’s revenue and operating profit continued to grow. In the January-September period, revenue was up 10 per cent and operating profit by 6 per cent on the previous year. Building Systems forged ahead with improving profitability. The business segment’s operating profit rose by 47 per cent to 5.2 per cent of revenue. The revenue of Construction Services increased by 14 per cent and its operating profit by 12 per cent. Construction Services’ operating profit margin remained excellent, 11.4 per cent. Revenue rose in Industrial and Network Services, but its operating profit weakened due to the limp market for network services as well as personnel downsizing measures. The operating profit margin was 3.6 per cent.

“We will continue to improve the operating profit margin of Building Systems. Construction Services has an excellent operating profit margin and the capacity downsizing measures carried out at Network Services will also provide us with good opportunities to spur Industrial and Network Services’ operating profit level into growth. Thanks to our record-breaking order backlog, we are well- poised to keep pursuing profitable growth in line with our plans,” says Group CEO Hannu Leinonen.

“The YIT Group’s target for revenue growth is 10 per cent annually on average. YIT’s growth target in Russia is 50 per cent on average per year during the 2006-2009 period. Growth in Russia is sought primarily by stepping up residential development and by moving ahead with non-residential project development efforts.
Building systems operations in St Petersburg and Moscow will also be expanded. YIT is seeking to establish a foothold for industrial services in the St Petersburg area.”

Revenue up 10 per cent

The YIT Group’s revenue for the January-September period grew by 10 per cent on the previous year and amounted to EUR 2,376.3 million (Jan-Sep/2005: EUR 2,163.8 million). Of the revenue, 56 per cent came from Finland, 32 per cent from the other Nordic countries, 7 per cent from Russia and 5 per cent from the Baltic countries.

The maintenance and servicing business accounted for 39 per cent (38%) of revenue, or EUR 919.0 million (EUR 815.2 million).

As from the beginning of 2006, YIT also monitors to what extent consumer services, long-term service agreements as well as project development and contracting contribute to the development of revenue. The share of revenue accounted for by consumer services was 26 per cent in January-September, while long-term service agreements generated 27 per cent and project development and contracting 47 per cent. YIT’s strategic objective is to increase the relative share of revenue accounted for by consumer services, long-term service agreements and non-residential project development efforts.

Profit before taxes up 3 per cent

Operating profit grew by 6 per cent on the previous year and was EUR 172.4 million (EUR 162.5 million). The operating profit margin was 7.3 per cent (7.5%). Profit before taxes grew by 3 per cent to EUR 158.1 million (EUR 153.6 million). Earnings per share declined by 3 per cent to EUR 0.88 (EUR 0.91). Equity per share was EUR 4.83 (EUR 4.14).

Financial position remains strong

The need for capital has increased due to growth in Russian business operations, the acquisition of plots and ongoing production. However, the Group's financial position remained strong. The equity ratio was 34.6 per cent (34.6%). The gearing ratio was 68.1 per cent (52.3%). Net debt amounted to EUR 416.8 million (EUR 271.8 million). The balance sheet total at the end of the report period was EUR 1,925.5 million (EUR 1,621.4 million).
Return on investment at the end of the 12-month period ending at the conclusion of the review period was 25.2 per cent (23.7%).

Order backlog grows by 19 per cent

The Group’s uninvoiced backlog of orders rose to a record high. At period’s end, it was 19 per cent higher than a year earlier, having risen to EUR 2,246.2 million (EUR 1,881.4 million). The margin of the backlog is good. Due to their nature, part of the Group’s maintenance and servicing operations are not included in the order backlog.

Northern Europe still booming

The boom in the Nordic countries has peaked. In September, Nordea estimated that the GDP of the Nordic countries will grow by 3.6 per cent this year and see average annual growth of 2.5 per cent in 2007-2008, still significantly outpacing euro zone growth. The good trend in incomes and the improving employment situation support household consumption. Euro interest rate levels and the moderate pace of growth support investments and housing demand.
Growth in exports and industrial output increases the need for industrial investments and maintenance in the Nordic countries.
Russia and Norway benefit from the high prices of oil. The rate of growth in Russia, Estonia, Latvia and Lithuania is more than twice as fast as in the Nordic countries.

YIT will start up more residences than last year

YIT estimates that this year it will start up the construction of about 3,000 market-financed residential units in Finland (start- ups in 2005: 2,993), about 3,100 residential units in Russia (2,263) and about 1,100 in the Baltic countries (1,111).

Outlook for 2006

We estimate that revenue and pre-tax profit in 2006 will increase compared to the previous year.

Publication on October 27

An event for investment analysts and portfolio managers will be held at YIT’s head office at 10:00 (finnish time) on Friday, October 27.  The address is Panuntie 11, 00620 Helsinki, Finland. A press conference will be held at the same venue at 13:00.

A webcast presentation of the January-September 2006 results can be viewed at YIT’s site, www.yitgroup.com. The results and YIT’s strategy will be presented in Finnish and English by Group CEO Hannu Leinonen.

Interim Reports are published as stock exchange releases and on the company’s site at www.yitgroup.com. Copies of Interim Reports can be ordered from the company’s site, by emailing InvestorRelations@yit.fi or by telephoning +358 20 433 2467.

YIT CORPORATION



Hannu Leinonen Group CEO

For additional information, contact: Hannu Leinonen, Group CEO, tel. +358 20 433 3301, hannu.leinonen@yit.fi Sakari Toikkanen, Executive Vice President, tel. +358 20 433 2336, sakari.toikkanen@yit.fi Esko Mäkelä, Executive Vice President, Investor Relations,  tel. +358 20 433 2258, esko.makela@yit.fi Petra Thorén, Vice President, Investor Relations,  tel. +358 40 764 5462, petra.thoren@yit.fi Veikko Myllyperkiö, Vice President, Corporate Communications,  tel. +358 20 433 2297, veikko.myllyperkio@yit.fi

 ANNEXES Interim Report, January 1 – September 30, 2006

1) Consolidated financial statements: income statement, balance sheet, reconciliation of shareholders’ equity, cash flow statement, contingent liabilities, acquired and divested businesses as well as revenue, operating profit, and order backlog by segment, 2) other key figures of the YIT Group: key figures, quarterly figures as well as quarterly revenue, operating profit and order backlog by segment.

Distribution: Helsinki Stock Exchange, principal media, www.yitgroup.com

YIT CORPORATION’S INTERIM REPORT, JAN. 1 – SEP. 30, 2006

IFRS STANDARDS

YIT Corporation’s Interim Report for January 1 – September 30, 2006 has been drafted in line with IAS 34: Interim Financial Reporting. YIT has applied the same accounting policy in the drafting of the Interim Report as in its annual financial statements for 2005. The information presented in the Interim Report has not been audited.

REVENUE UP 10 PER CENT

The YIT Group’s revenue for the January-September period grew by 10 per cent on the previous year and amounted to EUR 2,376.3 million (Jan-Sep/2005: EUR 2,163.8 million). Of the revenue, 42 per cent was generated by Building Systems, 43 per cent by Construction Services and 15 per cent by Industrial and Network Services.

Revenue by segment (EUR million)

                              Jan- Jan-Sep/2005      Change                           Sep/2006                                                             Building Systems *)        1,009.2        994.7          1% Construction Services      1,055.9        925.3         14% Industrial and Network        Services *)                  352.9        291.3         21% Other items                  -41.7        -47.5        -12% YIT Group, total           2,376.3      2,163.8         10%

*) At the beginning of 2006, industrial electricity, automation and HEPAC operations in Finland were transferred to the Industrial and Network Services business segment from YIT Kiinteistötekniikka Oy. The business functions that were transferred had revenue of EUR 58.9 million in Jan-Dec/2005.

YIT’s service chain spans the entire life cycle of investments.
The life cycle strategy seeks to achieve better service capability, growth in our business operations and a steadier stream of profits. Part of the Group’s revenue comes from its industrial, property, telecom network and traditional infrastructure maintenance and servicing business. During the review period, the revenue generated by the upkeep business was EUR 919.0 million (EUR 815.2 million), representing 39 per cent (38%) of total revenue.

As from the beginning of 2006, YIT also monitors to what extent consumer services, long-term service agreements as well as project development and contracting contribute to the development of revenue. The share of revenue accounted for by consumer services was 26 per cent in January-September, while long-term service agreements generated 27 per cent and project development and contracting 47 per cent. YIT’s strategic objective is to increase the relative share of revenue accounted for by consumer services, long-term service agreements and non-residential project development efforts.

Of the revenue, 56 per cent came from Finland, 32 per cent from the other Nordic countries, 7 per cent from Russia and 5 per cent from the Baltic countries.

The YIT Group’s strategic target for revenue growth is 10 per cent annually on average. YIT has set itself the additional goal of increasing its revenue in Russia by an average of 50 per cent annually during the 2006-2009 period.

OPERATING PROFIT UP 6 PER CENT

Operating profit grew by 6 per cent on the previous year and was EUR 172.4 million (EUR 162.5 million). The operating profit margin was 7.3 per cent (7.5%).

Operating profit by segment (EUR million)

                       Jan-Sep/2006 Jan-Sep/2005      Change                                                             Building Systems              52.6         35.8         47% Construction Services        120.8        107.7         12% Industrial and Network      Services                   12.8 *)         27.9        -54% Other items                  -13.8         -8.9         55% YIT Group, total             172.4        162.5          6%

*) The operating profit of the Industrial and Network Services business segment in the third quarter of 2006 includes EUR 5.1 million in costs for the downsizing of Network Services.

Profit before taxes grew by 3 per cent to EUR 158.1 million  (EUR 153.6 million). Profit after taxes was EUR 114.6 million  (EUR 113.4 million). Earnings per share declined by 3 per cent to  EUR 0.88 (EUR 0.91). Equity per share was EUR 4.83 (EUR 4.14).

The equity ratio was 34.6 per cent (34.6%). The gearing ratio was 68.1 per cent (52.3%). Net debt amounted to EUR 416.8 million  (EUR 271.8 million). Return on investment at the end of the 12-month period ending at the conclusion of the review period was 25.2 per cent (23.7%).

The YIT Group’s strategic target for operating profit is 9 per cent of revenue.

ORDER BACKLOG GROWS BY 19 PER CENT

The Group’s uninvoiced backlog of orders rose to a record high. It was 19 per cent higher at the end of the review period than a year earlier, having risen to EUR 2,246.2 million (EUR 1,881.4 million). The margin of the backlog is good. Due to their nature, part of the Group’s maintenance and servicing operations are not included in the order backlog.

Order backlog by segment (EUR million)

                          Sep/2006     Sep/2005      Change                                                             Building Systems             582.7        575.7          1% Construction Services      1,524.4      1,193.8         28% Industrial and Network        Services                     180.3        158.3         14% Other items                  -41.2        -46.4        -11% YIT Group, total           2,246.2      1,881.4         19%

YIT REVISES ITS STRATEGIC TARGET LEVELS

On September 19, 2006, YIT Corporation’s Board of Directors confirmed the financial target levels for the strategic period from 2007 - 2009. A Group-level target for the operating profit margin (EBIT) was set for the first time. The operating profit target that was set is 9 per cent of revenue.

The other financial target levels were not amended: average annual revenue growth of 10 per cent, return on investment of 22 per cent, an equity ratio of 35 per cent and a dividend payout ratio of 40-60 per cent of earnings after taxes and minority interest.

After the end of the review period, YIT announced that it has set itself the goal of increasing its revenue in Russia by an average of 50 per cent annually during the 2006-2009 period. Growth in Russia is sought primarily by stepping up residential development and by moving ahead with non-residential project development efforts. Building systems operations in St Petersburg and Moscow will also be expanded. YIT is seeking to establish a foothold for industrial services in the St Petersburg area.

The Board of Directors’ decision to revise the target levels was released as a stock exchange release on September 19, 2006, and the Russian growth target was announced in a release dated October 10, 2006.

THE GROUP’S FINANCIAL POSITION REMAINS STRONG

The need for capital has increased due to growth in Russian business operations, the acquisition of plots and ongoing production. However, the Group's financial position remained strong. Interest-bearing liabilities amounted to EUR 451.1 million (EUR 325.0 million) at the end of the period and liquid assets to EUR 34.3 million (EUR 53.2 million). Net debt was EUR 416.8 million (EUR 271.8 million). At the end of the review period, the gearing ratio was 68.1 per cent (52.3%). Liquidity was boosted in September by increasing the size of the commercial paper programme from EUR 100 million to EUR 200 million. In addition, short-term credit was converted into long-term credit by means of two EUR 50 million private placement bonds.

Financial income during the period amounted to EUR 2.3 million (EUR 1.3 million), exchange rate losses to EUR 1.8 million (exchange rate gains: EUR 2.6 million) and financial expenses to EUR 14.8 million (EUR 12.8 million). Net financial expenses were EUR 14.3 million (EUR 8.9 million), or 0.6 per cent (0.4%) of revenue.

The proportion of fixed-interest loans in the Group’s entire loan portfolio was 36 per cent (56%). Loans raised directly on the capital and money markets amounted to 49 per cent (43%).

The construction-stage contract receivables sold to financing companies totalled EUR 225.4 million (EUR 177.9 million) at the end of the period. Of this amount, EUR 115.8 million  (EUR 79.4 million) is included in interest-bearing liabilities in the balance sheet and the remainder comprises off-balance sheet items as per IAS 39. The interest on sold receivables paid to financing companies, EUR 7.0 million (EUR 3.8 million), is included in financial expenses in its entirety.

Participations in the housing corporation loans of unsold completed residences, EUR 22.7 million (EUR 21.8 million), are also included in interest-bearing liabilities, but the interest on them is booked in project expenses, as said interest is included in housing corporation maintenance charges.

Interest-bearing liabilities included EUR 3.3 million in leasing commitments (EUR 5.8 million).

The balance sheet total at the end of the report period was EUR 1,925.5 million (EUR 1,621.4 million).

CAPITAL EXPENDITURES AND ACQUISITIONS

Gross capital expenditures on non-current assets included in the balance sheet totalled EUR 29.9 million (EUR 22.3 million) during the January-September period, representing 1.3 per cent (1.0%) of revenue. Investments in construction equipment amounted to EUR 11.5 million (EUR 8.9 million) and investments in information technology to EUR 3.3 million (EUR 2.1 million). Other production investments came in at EUR 0.9 million (EUR 1.1 million). Other investments including acquisitions amounted to EUR 14.2 million (EUR 10.2 million).

On August 15, 2006, YIT Construction Ltd signed an agreement whereby YIT increased its holding in the Moscow-region housing developer ZAO YIT Moskovia to 82 per cent. YIT’s previous stake in the company was 51 per cent.

In 2006, the business functions of Building Systems have been rounded out in Sweden and Norway in line with the strategy. In Sweden, YIT acquired Fläkt Teknik i Umeå AB, a company specializing in ventilation technology in Umeå, the piping company AB Smedby Värme & Sanitet in Kalmari and the electrical company El Persson in Uppsala. YIT acquired two ventilation companies in Norway, URD Klima Mo AS in Mo i Rana and Rune Nilsen Ventilasjon AS in Arendal. As a result of the transactions, a total of 48 people transferred into YIT’s employ in Sweden and 30 in Norway.

NUMBER OF EMPLOYEES 22,200

During the review period, the Group employed 21,704 (21,330) people on average. At the end of the period, the number of personnel was 22,188 (21,468). Of YIT’s employees, 52 per cent work in Finland, 35 per cent in the other Nordic countries, 7 per cent in the Baltic countries and 6 per cent in Russia.

Personnel by business segment, September 30, 2006

                                   Number   Share of the                                                  Group’s                                                employees Building Systems                   11,456            52% Construction Services               5,511            25% Industrial and Network Services     4,895            22% Corporate Services                    326             1% YIT Group, total                   22,188           100%

Personnel by country, September 30, 2006

                                   Number   Share of the                                                  Group’s                                                employees Finland                            11,534            52% Sweden                              4,085            18% Norway                              2,550            11% Denmark                             1,247             6% Baltic countries                    1,541             7% Russia                              1,231             6% YIT Group, total                   22,188           100%

Network Services concludes codetermination negotiations to boost operational efficiency and cut personnel

During the report period, YIT Industrial and Network Services Ltd’s Network Services business unit carried out codetermination negotiations to boost operational efficiency and reduce personnel.
Personnel cuts were necessary because the market situation of the Network Services business unit has weakened significantly and permanently during the present year.

The need for personnel cutbacks has been confirmed to amount to 308 persons. Of the reductions, 92 will be made through pension arrangements, layoffs, transfers to new positions and other solutions. 216 persons will be made redundant due to reasons of economy and production. YIT will continue to carry out active employment measures, also for those made redundant. When the codetermination negotiations began, about 1,200 people were employed in the Network Services business unit.

The bulk of the cost effects of the personnel cuts – EUR 5.1 million – was recognized in the Industrial and Network Services business segment’s third-quarter result of 2006. The final cost effects depend on the success of the employment measures initiated after the conclusion of the codetermination negotiations.
Additional costs will amount to about EUR 3 million at most and will be recognized in the result for the first half of 2007.

YIT announced that the negotiations would be started in a stock exchange release on July 28, 2006, and reported on their conclusion on September 15, 2006.

SHARE CAPITAL AND SHARES

YIT Corporation’s share capital was EUR 62,397,352 at the beginning of the review period and the number of shares outstanding was 62,397,352.

Following a decision by the Annual General Meeting, the nominal value of the share was changed from one euro to EUR 0.50 (split) on March 24, 2006, thereby doubling the number of shares. Public trading in the new shares began on the Helsinki Stock Exchange on March 27, 2006.

On the basis of shares subscribed for with the Series C and D share options from 2002 and the Series E share options from 2004, the share capital was raised by EUR 205,240 on April 28, 2006, by EUR 169,022 on June 22, 2006, and by EUR 19,364 on August 18, 2006. At period’s end, the share capital amounted to EUR 62,790,978 and the number of shares was 125,581,956.

During the review period, 31,620 Series C share options were traded at an average price of EUR 69.20/option, 200,594 Series D share options at an average price of EUR 70.87/option and 123,610 Series E share options at an average price of EUR 28.80/option.

Authorizations to increase the share capital

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

Market capitalization EUR 2.3 billion

The average share price in the January-September period was  EUR 19.11 (EUR 13.05). The highest share price during the review period was EUR 23.88 (EUR 18.22) and the lowest was EUR 15.20  (EUR 8.95). At the end of the period, the closing share price was  EUR 18.27 (EUR 17.65). The figures have been adjusted for comparability by accounting for the halving of the nominal value of the share, which came into effect on March 24, 2006 (split).

Share turnover during the period amounted to EUR 2,551.2 million (EUR 1,127 million), with 132,841,404 (86,431,746) shares being traded. Market capitalization at the end of the period was  EUR 2,294.4 million (EUR 2,193.2 million).

Own shares

At the end of the review period, YIT Corporation held 400 of its own shares. In December 2005, YIT Corporation purchased 200 of the company’s own shares at an average price of EUR 35.25 per share.
Due to the halving of the nominal value of the share, the number of shares doubled and the share price was halved on March 24, 2006. The buyback of shares was decided on by the Annual General Meeting held in spring 2005, which decided on the buyback of a minimum of 200 and a maximum of 2,000,000 of the company’s own shares. At the end of the period the Board of Directors did not have authorizations to dispose of YIT’s own shares. YIT’s subsidiaries did not own shares in the parent company.

Growth in the number of shareholders

At the beginning of the period, there were 9,368 (7,456) registered shareholders, while they numbered 13,965 (9,260) at the end. The number of private investors grew by over 4,000 in the January-September period.

According to the nominee registers, 37.8 per cent of the shares (25.5%) were owned by foreign investors at the beginning of the period and 40.8 per cent (35.3%) at the end. Other foreign ownership at the end of the review period amounted to 2.5 per cent (2.2%); thus, a total of 43.3 per cent (37.5%) of the company’s shares outstanding were owned by international investors.

NORTHERN EUROPE STILL BOOMING

The boom in the Nordic countries has peaked. In September, Nordea estimated that the GDP of the Nordic countries will grow by 3.6 per cent this year and see average annual growth of 2.5 per cent in 2007-2008, still significantly outpacing euro zone growth. The good trend in incomes and the improving employment situation support household consumption. Euro interest rate levels and the moderate pace of growth support investments and housing demand.
Growth in exports and industrial output increases the need for industrial investments and maintenance in the Nordic countries.
Russia and Norway benefit from the high prices of oil. The rate of growth in Russia, Estonia, Latvia and Lithuania is more than twice as fast as in the Nordic countries.

Finland

In September, Nordea estimated that Finland’s GDP will rise by 4.4 per cent this year and further by 2.7 and 2.9 per cent in 2007 and 2008, respectively. The improvement in the employment situation, the good trend in incomes and the moderately growing interest rate level support household consumption and demand for housing.
According to the forecast released in September by the Research Institute of the Finnish Economy ETLA, investments in machinery and equipment will grow by 8 per cent this year and 10 per cent the next. The business cycle report published by the Confederation of Finnish Construction Industries RT in October states that the volume of construction will grow by 4.5 per cent this year and 2.5 per cent the next. Residential construction and repair works will remain brisk. 34,500 residential units will be started up this year and 33,500 the next. Office construction will be on the up, especially in the Greater Helsinki Area. Construction of industrial and commercial premises will also remain brisk. Annual growth in renovation works will be 2-3.5 per cent during the present decade. Growth in new construction and renovation maintains demand in the construction and building system markets (heating, plumbing, air-conditioning, electrical and automation contracting, and maintenance). The market for industrial, property and infrastructure maintenance will expand as the outsourcing trend progresses. Growth in the number of broadband connections has slackened and investments to expand the fixed and mobile phone networks will remain slight.

Sweden

At the end of August, the Swedish National Institute of Economic Research KI estimated that Sweden’s GDP will grow by 4.1 per cent this year and 3.3 per cent and 2.9 per cent in 2007 and 2008, respectively. The factors underlying this positive trend are the high capacity utilization ratio in industry, solid earnings, the positive incomes trend enjoyed by households and the low interest rates. Growth is on a broad footing. In 2006, exports will increase by 8.8 per cent due to international demand and the effect of the relatively weak Swedish kronor. Fixed investments will increase by 8.3 per cent this year, but will slacken to 5.0 per cent the next. Fixed investments by industry will increase by 5.4 per cent during the present year, and next year by 4.5 per cent. Investments by the service sector are higher and growing faster than those of industry, rising by 8.7 per cent this year and 4.9 per cent the next. KI states that growth in housing investments will continue at a rate of 11.1 per cent this year and by 7.5 per cent the next. According to the business cycle barometer KI released in September, the order backlogs of construction companies have increased, and these companies expect to see further production growth. Sixty per cent of construction companies report that the shortage of skilled labour slows down growth, while 53 per cent of construction companies state that tender prices are rising. In October, the Swedish Construction Federation BI predicted that the construction of 33,000 new residential units will be started up this year and 35,000 the next. Production of other types of buildings will see growth of 5 per cent this year and 2 per cent the next.

Norway

Norway’s boom has gained momentum. According to the forecast released by Statistics Norway in October, GDP will grow by 2.1 per cent this year and further by 2.9 and 2.8 per cent in 2007-2008.
Growth in household consumption will continue at a rate of over 3 per cent during the whole forecast period. The vigorous growth in fixed investments that got under way in 2004 will still continue at 7.7 per cent this year, but the completion of large oil and gas investments will depress investments into a decline of 0.1 per cent in 2007. In a year, Norges Bank’s key interest rate (“sight deposit rate”) has risen by 1.25 percentage points. Statistics Norway expects the key interest rate to rise further this year, by 0.5 percentage point to 3.75 per cent. The slowdown in international economic growth will weaken the trend in the exports of continental Norway during the next two years. Residential start- ups numbered 31,600 last year. The construction of 19,870 residential units got under way from January to August this year, 4.2 per cent more than in the corresponding period of the previous year. Start-ups of other types of buildings during this period outnumbered the corresponding year-ago figure by 6.3 per cent.
Demand for business and industrial buildings is expected to grow slightly in 2006-2009. Euroconstruct estimated in June that the construction of new buildings will grow by 6.8 per cent this year and further by 2.1 per cent in 2007. Construction of non- residential buildings will increase by 9 per cent this year, remaining at a high level during the next two years. Renovation will grow at an annual rate of about 3 per cent during 2006-2008.

Denmark

The outlook for the Danish economy is still good. In September, Nordea anticipated that GDP growth will amount to 2.5 per cent this year. Export growth gathered steam last year, and will continue at a rate of 8.9 per cent this year and 6.2 per cent the next. Growth in private consumption is estimated to slacken to 2.5 per cent this year. Investments will increase by 8.6 per cent this year. Housing prices rose by 16.4 per cent last year and will continue to increase at a rate of about 22 per cent this year, slowing towards the end of the year. Growth in housing investments will slacken to 5.4 and 2.0 per cent this year and the next, respectively. In June, Euroconstruct estimated that the number of new residential start-ups will be 26,000 this year and 27,000 in both 2007 and 2008. Housing renovation will not see growth in these years. The construction of other types of new buildings will increase by 3.7 per cent this year, and by 3.8 and 4.5 per cent in 2007 and 2008. The value of the production of industrial buildings will rise at a rate of about 10 per cent and that of office buildings by 5 per cent annually in 2006-2008. Annual growth in repairs of business buildings is about one per cent.

Baltic countries

GDP and investments grow at a significantly faster rate in Latvia, Lithuania and Estonia than in the Nordic countries. According to VTT’s estimate, the value of construction was EUR 5.7 billion last year and the number of completed residences rose by 7 per cent. In its forecast in September, Nordea estimated that the GDP of these countries will continue to grow by 6.3-10.4 per cent over the next few years. The growth of these economies is supported by the high educational level in the area and the EU membership of Estonia, Latvia and Lithuania. Growth in investments this year will be 14.6 per cent in Estonia and 12 per cent in Lithuania. During the next two years, investments will grow at a rate of over 10 per cent in both countries. This year, investments in Latvia will grow at a rate of about 20 per cent. Inflation in Estonia and Lithuania is slightly faster than the EMU average, while it is over twice as fast in Latvia. Rapid inflation will delay the EMU entry of these countries. The interest rate spread with the euro will narrow as the countries seek EMU membership. Affordable borrowing, economic growth and the greater affluence of the population have increased demand for new residences and renovation. VTT estimates that about 15,000 residential units will be completed in the Baltic countries this year. Building permits have been granted for over twice as many residences as have been completed.

Russia

The high price of oil supports Russian economic growth. In September, Nordea estimated that Russia’s GDP will grow by 6.2 per cent this year and by 6.0 and 5.5 per cent over the next two years. The Central Bank of the Russian Federation forecast in August that growth in GDP will amount to 6 per cent in 2007 provided that the average price per barrel of Ural blend oil is USD 61. If the per-barrel price were to be USD 45, growth would remain at 5 per cent, while in the case of a higher per-barrel price of USD 75, the growth rate would rise to 6.4 per cent. Last year, inflation was 12.6 per cent; according to Nordea’s estimate, it will slow down to 9.8 per cent this year. The rate of growth in investments will remain in the double digits, with the exception of next year, and will remain significantly faster than the EU and Nordic average over the next few years. Thanks to the good incomes trend, household consumption has become the primary engine of growth. Private consumption will rise by 12.5 per cent this year, comprising half of GDP. The greater affluence of the middle class has strengthened demand for market-financed residences in large cities such as Moscow and St Petersburg.

EARNINGS TRENDS OF THE BUSINESS SEGMENTS

BUILDING SYSTEMS

In the January-September period, Building Systems’ revenue amounted to EUR 1,009.2 million (Jan-Sep/2005: EUR 994.7 million).
The share of the business segment’s revenue accounted for by the maintenance and servicing business rose to 65 per cent (60%).

At the beginning of 2006, industrial electricity, automation and HEPAC operations in Finland were transferred to the Industrial and Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of EUR 58.9 million in Jan-Dec/2005.

The business segment continued to improve its profitability.
Operating profit increased by 47 per cent to EUR 52.6 million (EUR 35.8 million). The operating profit margin in January-September was 5.2 per cent (3.6%). In the third quarter of 2006, the operating profit margin improved to 6.3 per cent (4.1%).

The order backlog at the end of the period amounted to EUR 582.7 million (EUR 575.7 million).

The business segment had 11,456 employees (11,941) at the end of the period.

In 2006, business functions have been rounded out in Sweden and Norway with numerous small acquisitions, in line with the strategy. As a result of the transactions, a total of 48 people transferred into YIT’s employ in Sweden and 30 in Norway.

Revenue of the Building Systems business segment by country

                       Jan-          (Jan-   Share of the                   Sep/2006,     Sep/2005),       business                        MEUR           MEUR      segment’s                                                  revenue,                                               Jan-Sep/2006 Sweden                383.3        (381.2)            38% Finland           237.8 **)     (307.9) *)            23% Norway                249.9        (217.6)            25% Denmark               101.7         (88.2)            10% Estonia,                                                  Latvia,                 Lithuania and Russia   36.5         (-) *)             4% Total               1,009.2        (994.7)           100%

*) An independent country group was set up from Building Systems’ business functions in the Baltic countries and Russia as from the beginning of 2006. These business functions were previously part of the same corporate entity as Finnish functions. The revenue of the Russian and Baltic business functions was EUR 38.7 million in 2005.

**) At the beginning of 2006, industrial electricity, automation and HEPAC operations in Finland were transferred to the Industrial and Network Services business segment from YIT Kiinteistötekniikka Oy. The business functions that were transferred had revenue of EUR 58.9 million in Jan-Dec/2005.

Good market situation in Sweden

The trend in the Swedish economy has been good in 2006. The market situation in building system works remained good in industry and construction alike during the report period. Maintenance and servicing works saw growth compared with the previous year.

During the report period, an outsourcing agreement was made with Wasabröd AB for the management and development of maintenance works. This long-term servicing plan seeks to reduce the incidence of acute maintenance works and to boost productivity. The agreement extends until the end of 2010. Ten employees will transfer from Wasabröd to YIT.

The Öresundsbro servicing agreement that has been in force since 2002 was extended by two years. YIT is responsible for the maintenance and servicing of the electrical, ventilation, piping and cooling equipment of a 16-kilometre bridge between Malmö and Copenhagen.

An order came in from Skanska for electrical works and the installation of alarm and surveillance equipment in Bothnia Line’s railway and maintenance tunnels. The project will begin in autumn 2006 and continue until September 2007.

Technical building systems continue to grow in Finland

In 2006, growth in the market for technical building systems in Finland has outpaced construction in both commercial and residential construction. Demand has increased especially in solutions for property automation, energy efficiency and security.

During the report period, an agreement was made for the delivery of HEPACE, telecom, security and automation systems for VVO’s office building, which will be built in Ruskeasuo, Helsinki. In Turku, YIT will provide HEPACE works and building automation for the Kakolanmäki wastewater treatment plant. YIT Construction Services is responsible for building construction and earthworks in VVO’s office building project, and for the delivery of supplementary machinery for the Kakolanmäki wastewater treatment plant.

Demand in the market for the maintenance and servicing of building systems remained brisk. Maintenance and servicing agreements were signed with Fortek Oy for Stora Enso’s Veitsiluoto mill and with Berner Oy for the company’s properties in Herttoniemi, Helsinki.
The maintenance partnership agreement made with VIP-Juicemaker Oy in Kuopio was expanded and extended by three years.

In October, YIT and Finnair signed a letter of intent whereby Finnair’s real-estate and facilities management services will be handled by YIT for the next five years. Under the agreement, about 50 people will transfer into YIT’s employ on January 1, 2007.

Demand for property management services rose due to the interest shown in the Finnish real-estate market by international investors. During the report period, property management agreements with the Pohjola Group and Sato were updated. New service agreements for energy management were forged with Strömforss, Muuratpuu Pohjonen, Mikkelin Puhelin (the telephone company of Mikkeli) and the Soini Group.

Construction remains brisk in Norway

Activity in both commercial and residential construction in Norway has been brisker than in the previous year. The market for renovation works has remained good. The rise in the price of energy increases investments in energy conservation technology.

YIT received contracts for total technical solutions for Skattens Hus, to be built by Block Berge Bygg AS outside Stavanger, and for a police station and cells to be built by Hus og Hyttebygg AS in Skien.

Both deliveries include electrical and ventilation systems that employ the ClimaCeil solution. In addition, access control, piping and heat exchange systems will be provided for Skattens Hus, an office building in the shared use of different tax authorities. IT and audio-visual solutions will be implemented at the police station in Skien. The works will be completed towards the end of 2007.

In Oslo, YIT received a contract for audio-visual systems for the conference rooms of the Ministry of Defence’s new offices, along with security solutions.

Demand for building systems grows in Denmark

Thanks to the stable development of the Danish economy, construction is now in full swing. Demand for building system installation works grew during the report period in the case of industry as well as public and commercial premises. Growth was seen in the demand for technical maintenance and the outsourcing of services. The shipyard and marine industry markets grew steadily. In the network services market, telecom operators continued to shift to 3G technology.

Technical building system deliveries were implemented during the report period for the University of Aarhus’ renovation project and, in cooperation with Davidsen Partnere A/S, for a Toyota car dealership in Kolding. An agreement for new ventilation system deliveries was made with Scion DTU, which is part of the Technical University of Denmark.

In the shipyard industry, YIT carried out ship section installation works for A.P. Moller on a tight schedule. A fire destroyed one section containing bridge, accommodations and power control of the world’s largest cargo ship, which was under construction at the Odense shipyard. While the yard was stripping out this 12-storey section, YIT was responsible for preparing and installing all electrical equipment in the complete new section.

An order came in from SEAS Distribution A.M.B.A. for the reconditioning of a high-voltage power line in Sealand.

Building systems on the rise in Estonia, Latvia, Lithuania and Russia

In 2006, the market for building system services saw steady development in the Baltic countries. Demand for building systems has surged in both St Petersburg and Moscow in Russia.

In YIT’s territories, investments are being started up that will generate further demand for Design&Build projects of technical building systems. The market for technical servicing and property management services is also on the rise.

An agreement was made with AB Vilniaus Akropolis for the delivery of a total technical solution for a Maxima Market in Panevezys. In Russia, a total technical solution for the Kemerovo ice arena – including HEPACE and automation systems, water-freezing equipment and the design and installation of hall illumination – will be supplied to Artaksent, a local contractor.

Major technical building system deliveries were ongoing for the Kaunas Akropolis shopping centre in Lithuania and the Cherepovets ice arena in Russia. Housing projects in St Petersburg continued in cooperation with YIT Construction Services, as did electrical works at the Tornimäe Hotel in Estonia.

CONSTRUCTION SERVICES

In the January-September period, the revenue of Construction Services grew by 14 per cent on the previous year and amounted to EUR 1,055.9 million (EUR 925.3 million). The share of revenue accounted for by the maintenance business was 7 per cent (3%). Of the revenue, 75 per cent came from Finland, 14 per cent from Russia, 11 per cent from Estonia, Latvia and Lithuania and less than one per cent from other countries.

Operating profit grew by 12 per cent to EUR 120.8 million (EUR 107.7 million). The operating profit margin remained excellent, 11.4 per cent (11.6%).

The order backlog grew by 28 per cent to EUR 1,524.4 million  (EUR 1,193.8 million).

The business segment had 5,511 employees (4,937) at the end of the period.

Demand for housing remains good

Demand for market-financed residences has remained good in 2006 in all of YIT’s territories – Finland, the Moscow Oblast, St Petersburg and the capital cities of the Baltic countries.

YIT is proceeding according to plan in the construction of leisure-time residences in Finland. During the third quarter, agreements were signed for the implementation of leisure-time residences in the Pyhätunturi and Sappee skiing centres. Contracts for leisure-time residence projects have been made at a total of ten sites.

The prices of residences in Finland saw moderate growth during the review period. Housing prices have increased significantly in the Baltic countries and especially in Russia. 

The average selling price of the market-financed residences built by YIT has in July-September period risen in Russia to 40 per cent of the average selling price of residences sold in Finland, and in the Baltic countries to 60 per cent.

YIT will start up more residences than last year

YIT estimates that this year it will start up the construction of about 3,000 market-financed residential units in Finland (start- ups in 2005: 2,993), about 3,100 residential units in Russia (2,263) and about 1,100 in the Baltic countries (1,111).

The market outlook for the developer contracting of housing is estimated to remain solid in all of YIT’s market areas. The population shift, the improvement in the employment situation, the positive outlook of consumers on the development of their own finances as well as the moderate trend in interest rates maintain demand for housing in Finland. In Russia and the Baltic countries, strong economic growth, the need to improve housing quality and the good trend in household earnings increase the demand for residences. At the end of September, YIT had 174 unsold completed residences in Finland (Sep/2005: 182). There were no unsold completed residences in Russia and the Baltic countries.

YIT is stepping up residential construction in Russia by increasing start-ups in its present territories and by expanding to cities in their vicinity. Over the next few years, YIT also aims to expand its operations into other Russian cities with populations in excess of a million.
YIT currently builds housing in St Petersburg, Moscow and the Moscow Oblast. In 2007, residential construction will also be started in Kazan and Yaroslavl.

Residential construction in Jan-Sep/2006 (Jan-Sep/2005), number of residences                        Finland                Russia       Estonia,                                                             Latvia,                                                           Lithuania               Marker-    State-      Total    Total           Total              financed  financed                                                  rental                                        housing                                        and                                          tender-                           based  Sold            1,916     -          1,916     1,633         502                 (2,387)   (-)        (2,387)   (1,005)       (678) Start-ups       2,425   158          2,583       974         500                 (2,497)  (80)        (2,577)     (464)       (791) Under            construc-     tion at period’s end   3,453    158          3,611     6,218       1,790               (2,937)  (132)        (3,069)   (3,551)     (1,177) Completed      2,389    153          2,542      -            238                (2,396)  (106)        (2,502)     (466)       (201) Completed                                                             and unsold       174      -            174         -         -  at period’s end (182)    (-)          (182)       (4)       (-)

Residential construction also includes leisure-time residences.

Bolstering plot reserves in Russia

In 2006, YIT has expanded its operations in Russia to two new cities by acquiring plots. In May, YIT gained investment rights to its first plot in Kazan and in October in Yaroslavl. Kazan is located in the Tatarstan region at the confluence of the rivers Volga and Kazanka. Around 1.1 million people live in the city.
Yaroslavl has about 600,000 inhabitants and is located 250 km northeast of Moscow.

In St Petersburg, YIT won the investment rights to two plots at auctions in September. After the end of the review period, YIT gained investment rights to a plot in the southern part of the City of Moscow.

Over 1,000 residential units can be built on the plot acquired in Kazan, about 160 on the plot in Yaroslavl, around 2,200 on the plots now acquired in St Petersburg and 150 on the plot in the City of Moscow. The plots will be built up in stages. Construction works on all these plots are slated to begin in 2007.

In land management in Finland, outlays were made on good plot reserves and their rapid turnover as well as long-term regional development projects in cooperation with landowners and municipalities.

YIT won residential plots in the Ratina area in a plot assignment competition held by the City of Tampere. Building rights on these plots amount to 15,200 m2 of floor area. A letter of intent was made with the City of Vaasa for a plot reservation in the Vaskiluoto area.

Plot reserves, September 30, 2006 (September 30, 2005) Building rights and zoning potential, 1,000 m2 of floor area

                       Finland       Russia          Estonia,                                                       Latvia,                                                     Lithuania Housing plots         1,793 (1,552)    784 (484)    308 (204) Business premise plots  969   (788)    444 ( 16)     33   (-) Total                 2,762 (2,340)  1,228 (500)    341 (204)                         Capital tied into                                              plot reserves,          EUR million          297.5 (262.5)   58.4 (29.0)  43.3 (24.9)

 Plot reserves include plots that have been zoned and an estimate of the potential building rights on areas that are under zoning.
Building rights provided by regional development agreements made with landowners are not included in YIT’s balance sheet until the zoned sections are each in turn slated for construction.

Demand recovers in office, commercial and logistics construction

The market for retail and logistics premises remained good during the period. Demand for new office buildings also improved in spite of the slight rise in the vacancy rate. New construction increased during the review period. In addition, numerous property owners are converting office properties for other purposes, such as for use as housing and hotels.

Construction investments by industry remained slight. In the case of tender-based contracts, the market remained tight in both new construction and renovation.

In office construction, an agreement was made with the VVO Group for the implementation of its new head office in Helsinki. In this project, YIT will be responsible not only for construction, but also earthworks and building system works.

In shopping centre development projects, YIT gained possession of plots by the Länsiväylä highway in Espoo for the construction of the Martinsilta Retail Village. It is estimated that construction will begin in autumn 2007. Construction works got under way at the Elektron shopping centre in Riihimäki.

Following up on long-term cooperation, an agreement was made for an extension for Ford’s car factory in Vsevolozk in the Leningrad Oblast. An agreement was signed in Estonia for the construction of an Opel and Chevrolet car dealership and service centre. The project will be completed in summer 2007.

Good market situation continues in civil engineering

The market situation remained good in civil engineering. Orders came in from the City of Espoo for the construction of the Linnuntie, Linnunlauluntie and Otamäentie roads. An agreement was made with the City of Mikkeli for the construction of a harbour bridge for the city’s transit centre. YIT’s market share in the maintenance of the Finnish government’s public roads rose to 20 per cent.

An agreement was signed with the City of Turku for the delivery of supplementary machinery for the Kakolanmäki wastewater treatment plant, which is currently under construction.YIT will also provide HEPACE works and building automation for the project.

 INDUSTRIAL AND NETWORK SERVICES

The revenue of Industrial and Network Services grew by 21 per cent to EUR 352.9 million (EUR 291.3 million) in the January-September period. The share of revenue accounted for by the maintenance business was 60 per cent (76%). Of the revenue, 94 per cent was generated in Finland and 6 per cent in other countries.

At the beginning of 2006, industrial electricity, automation and HEPAC operations in Finland were transferred to the Industrial and Network Services business segment from YIT Kiinteistötekniikka Oy.
The business functions that were transferred had revenue of  EUR 58.9 million in Jan-Dec/2005.

Operating profit declined by 54 per cent to EUR 12.8 million  (EUR 27.9 million). The operating profit margin was 3.6 per cent (9.6%).

The business segment’s operating profit weakened due to the limp market for network services as well as the costs of the personnel cuts that were made in Network Services after codetermination negotiations.

The bulk of the cost effects of the personnel cuts – EUR 5.1 million – was recognized in the Industrial and Network Services business segment’s third-quarter result of 2006. The final cost effects depend on the success of the employment measures initiated after the conclusion of the codetermination negotiations.
Additional costs will amount to about EUR 3 million at most and will be recognized in the result for the first half of 2007.

The order backlog at the end of the period amounted to EUR 180.3 million (EUR 158.3 million). The order backlog in Network Services is based on forecasts from customers.

At the end of the period, the business segment had 4,895 employees (4,275).

New partnership agreements in industrial maintenance

Demand for industrial maintenance services remained brisk. New maintenance outsourcing agreements were made during the review period. In addition, major maintenance shutdown works were carried out at sites such as Fortum’s nuclear power plant in Loviisa and Botnia’s pulp mill in Kemi.

A letter of intent was signed with Metsä-Botnia for the outsourcing of the maintenance of Botnia’s pulp mills in Rauma and Äänekoski. This agreement means that YIT and Metsä-Botnia’s joint venture Botnia Mill Service will be responsible for the end-to-end maintenance of all of Metsä-Botnia’s mills in Finland as from the beginning of 2007. Under the agreement, about 100 people will transfer into Botnia Mill Service’s employ.

Good demand continues in industrial projects

The market situation for capital investment projects for industry remained favourable. Works on the Diesel project continued at Neste Oil’s Porvoo refinery until the end of the report period.
Major piping and equipment installation works were implemented for Neste Oil’s oil refinery in Naantali. In addition, installation works were carried out as part of the replacement of an automation system, as was the replacement of switchgears and distribution boards to improve electrical network usability.

A large-scale delivery of high-pressure piping prefabs for a soda recovery boiler was made for Kvaerner Power; these prefabs are for Suzano Papel e Celulose’s pulp mill that is under construction in Mucuri, Brazil. Piping projects related to modernization works and maintenance shutdowns were carried out in Sweden for the Ringhals 3, Forsmark 2 and Oskarshamn 2 nuclear power plants in association with YIT Sverige AB.

An order came in from Alstom Finland Oy for a flue gas scrubber system for Ekokem’s waste incineration plant in Riihimäki.

A weak market for network services

During the report period, the Network Services business unit carried out codetermination negotiations to boost operational efficiency and reduce personnel. In the negotiations, the need for personnel cutbacks was confirmed to amount to 308 persons. Of the reductions, 92 will be made through pension arrangements, layoffs, transfers to new positions and other solutions. 216 persons will be made redundant due to reasons of economy and production. YIT will continue to carry out active employment measures, also for those made redundant. When the codetermination negotiations began, about 1,200 people were employed in the Network Services business unit.

Personnel cuts were necessary because the market situation of the business unit has weakened significantly and permanently during 2006. Investments by teleoperators, maintenance works and repairs have decreased and the peak in broadband connection deliveries has levelled off.

After the downsizing measures, YIT’s resources will match the changed business environment and lower demand. In future, growth in Network Services will be sought from technical helpdesk services and new installation services offered to consumers.

The major delivery ongoing during the report period was related to the events held during Finland’s Presidency of the EU. YIT is providing telecom connection construction and installation services to TeliaSonera Finland for events around Finland.

EVENTS AFTER THE END OF THE REVIEW PERIOD

OMX’s stock exchanges in Copenhagen, Stockholm and Helsinki launched the Nordic Exchange, a common presentation for Finnish, Swedish and Danish companies, on October 2, 2006. YIT is included in the Large Cap market capitalization group under the Industrials sector.

OUTLOOK FOR 2006

We estimate that revenue and pre-tax profit in 2006 will increase compared to the previous year.

Helsinki, October 26, 2006

The Board of Directors

YIT CORPORATION’S INTERIM REPORT, JAN 1 - SEP 30, 2006: TABLES

 1. Consolidated financial statements, Jan 1 - Sep 30, 2006

Consolidated income statement Consolidated balance sheet Consolidated statement of changes in equity Consolidated cash flow statement Commitments and contingent liabilities and assets Acquired and divested businesses Revenue, operating profit and order backlog by segment

2. Other YIT Group’s key figures

Key figures Quarterly figures Revenue, operating profit and order backlog by segment by quarter



1. CONSOLIDATED FINANCIAL STATEMENTS, JAN 1 - SEP 30, 2006

IFRS standards

YIT Corporation’s Interim Report for January 1 – September 30, 2006 has been drafted in line with IAS 34: Interim Financial Reporting.  YIT has applied the same accounting policy in the drafting of the Interim Report as in its annual financial statements for 2005.
The information presented in the Interim Report has not been audited.

Business segment structure

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

At the beginning of 2006, industrial electricity, automation and HEPAC operations were transferred to the business segment from YIT Kiinteistötekniikka Oy. The business functions that will be transferred had revenue of EUR 58.9 million in Jan-Dec/2005.

CONSOLIDATED INCOME STATEMENT (EUR million)

                                 IFRS      IFRS  Change, %      IFRS                              Jan-Sep/  Jan-Sep/             Jan-Dec/                                  2006      2005                 2005 Revenue                       2,376.3   2,163.8         10   3,023.8 - of which activities            outside Finland             1,047.7     921.0         14   1,326.6 Operating income and          expenses                     -2,187.1  -1,985.1         10  -2,772.9 Share of results of affiliates    0.8       0.5         60       0.7 Depreciation and write-downs    -17.6     -16.7          5     -23.9 Operating profit                172.4     162.5          6     227.7 % of revenue                      7.3       7.5          -       7.5 Financial income                  2.3       1.3         77       1.9 Exchange rate differences        -1.8       2.6         *)       2.0 Financial expenses              -14.8     -12.8         16     -16.8 Profit before taxes             158.1     153.6          3     214.8 % of revenue                      6.7       7.1          -       7.1 Income taxes                    -43.6     -40.2          8     -57.9 Profit for the report period 1) 114.6     113.4          1     156.9 % of revenue                      4.8       5.2          -       5.2                                                              Attributable to                                              Equity holders of the            parent company                  110.7     112.7         -2     155.5 Minority interests                3.9       0.7         *)       1.4                                                             Earnings per share                                          attributable to the equity holders of the parent company Earnings per share, EUR **)      0.88      0.91         -3      1.26 Diluted earnings per share,       EUR **)                          0.87      0.89         -2      1.23

*) Change over 100%

**) The per-share key figures presented in the tables have been adjusted for comparability such that they account for the halving of the nominal value of the share, which came into effect on March 24, 2006 (split). The percentage changes have been calculated from the pre-split values.

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

CONSOLIDATED INCOME STATEMENT FROM LAST QUARTER (EUR million)

                                 IFRS      IFRS  Change, %                              Jul-Sep/  Jul-Sep/                                  2006      2005 Revenue                         789.5     754.8          5 - of which activities              outside Finland               354.7     326.3          9 Operating income and           expenses                       -725.1    -682.7          6 Share of results of affiliates    0.4       0.2         *) Depreciation and write-downs     -6.2      -5.6         11 Operating profit                 58.6      66.7        -12 % of revenue                      7.4       8.8          - Financial income                  0.6       0.6          - Exchange rate differences        -0.6       0.5         *) Financial expenses               -5.9      -4.2         40 Profit before taxes              52.7      63.6        -17 % of revenue                      6.7       8.4          - Income taxes                    -16.1     -17.0         -5 Profit for the report period 1)  36.7      46.6        -21 % of revenue                      4.6       6.2          -                                                   Attributable to                                   Equity holders of the            parent company                   35.1      45.7        -23 Minority interests                1.6       0.9         78                                                            Earnings per share                                         attributable to the equity holders of the parent company Earnings per share, EUR **)      0.28      0.36        -22 Diluted earnings per share,       EUR **)                          0.27      0.36        -25

*) Change over 100%

**) The per-share key figures presented in the tables have been adjusted for comparability such that they account for the halving of the nominal value of the share, which came into effect on March 24, 2006 (split).

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

CONSOLIDATED BALANCE SHEET (EUR million)

                                 IFRS      IFRS  Change, %      IFRS                               Sep 30,   Sep 30,              Dec 31,                                  2006      2005                 2005 ASSETS                                                                                                                                    Non-current assets                                                   Property, plant and equipment    85.0      76.1         12      77.1 Goodwill                        248.8     248.8          -     248.8 Other intangible assets          14.4      15.0         -4      13.4 Shares in associated companies    2.6       1.7         53       1.8 Investments                       2.8       2.6          8       3.0 Receivables                      10.0       8.8         14       9.4 Deferred tax assets              21.5      20.0          8      23.6                                                              Current assets                                               Inventories                     839.8     672.5         25     685.2 Trade and other receivables     666.4     522.7         27     545.2 Cash and cash equivalents        34.3      53.2        -36      80.6                                                              Total assets                  1,925.5   1,621.4         19   1,688.1                                                                      EQUITY AND LIABILITIES                                                                                                                    Equity attributable to                                               equity holders of the parent company Share capital                    62.8      62.1          1      62.4 Other equity                    543.8     452.6         20     497.4                                                              Minority interests                5.2       4.8          8       3.7                                                              Total equity                    611.8     519.5         18     563.5                                                             Non-current liabilities                                     Deferred tax liabilities         45.0      27.7         62      36.5 Pension liabilities              10.9      10.6          3      11.6 Provisions                       30.9      30.4          2      30.1 Interest-bearing liabilities    264.6     175.3         51     172.4 Other liabilities                 5.7       3.3         73       4.4                                                             Current liabilities                                         Trade and other payables        748.6     691.1          8     691.2 Provisions                       21.5      13.8         56      15.8 Interest-bearing current         liabilities                     186.5     149.7         25     162.6                                                              Total equity and liabilities  1,925.5   1,621.4         19   1,688.1

 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (EUR million)

           Share  Share  Legal  Other  Cumu-  Fair  Retai- Mino-  Total            capi-  pre-   re-    re-    lative value ned    rity   equity              tal  mium   serve  serve  trans- re-   ear-   inte-                      re-                  lation serve nings  rest                   serve                diffe-                                        rences Equity on    Jan 1,2006  62.4   77.2   0.7   2.5    -3.0   -0.1  420.0    3.7  563.5 Shares       subscribed with options 0.4    2.4     -     -       -      -      -      -      - Change in the     fair value of interest derivatives    -      -     -     -       -    0.3      -      -      - Change in     translation differences    -      -     -     -     0.4      -      -      -      - Employee share       option scheme  -      -     -  12.1       -      -  -10.5      -      - Net profit      for the period -      -     -     -       -      -  110.7      -      - Dividend paid  -      -     -     -       -      -  -68.6      -      - Other change   -      -   0.1     -       -      -   -0.4      -      - Equity on    Sep 30,2006 62.8   79.6   0.8  14.6    -2.6    0.2  451.2    5.2  611.8

           Share  Share  Legal Other  Cumu-   Fair  Retai- Mino-  Total            capi-  pre-   re-   re-    lative  value ned    rity   equity             tal   mium   serve serve  trans-  re-   ear-   inte-                       re-                 lation  serve nings  rest                   serve               diffe-                                       rences Equity on   Dec 31,2004 61.3   71.5   0.7   1.6    -1.4      -  307.4    4.1  445.4 Transition      effect of IAS 32 and 39      -      -     -     -       -   -0.4   -0.3      -   -0.7 Equity on    Jan 1,2005  61.3   71.5   0.7   1.6    -1.4   -0.4  307.2    4.1  444.7 Shares        subscribed with options 0.8    4.3     -     -       -      -      -      -      - Change in the     fair value of interest derivatives    -      -     -     -       -   -0.1      -       -     - Change in      translation differences    -      -     -     -    -1.6      -      -       -     -  Employee       share option scheme         -      -     -   0.9       -      -   -0.1       -     - Net profit     for the period         -      -     -     -       -     -   112.7       -     - Dividend paid  -      -     -     -       -     -   -42.9       -     - Other change   -      -     -     -       -     -     0.2       -     - Equity on    Sep 30,2005 62.1   75.8   0.7   2.5    -3.0  -0.5   377.1     4.8 519.5

            Share  Share  Legal Other  Cumu-  Fair   Retai- Mino-  Total            capi-  pre-   re-   re-    lative value  ned    rity   equity             tal   mium   serve serve  trans- re-    earn-  inte-                      re-                 lation serve  nings  rest                   serve               diffe-                                       rences Equity on    Dec 31,2004 61.3   71.5   0.7   1.6    -1.4     -   307.4     4.1 445.4 Transition      effect of IAS 32 and 39     -       -     -     -       -  -0.4    -0.3       -  -0.7 Equity on   Jan 1,2005  61.3   71.5   0.7   1.6    -1.4  -0.4   307.2     4.1 444.7 Shares        subscribed with options 1.1    5.7     -     -       -     -       -       -     - Change in the      fair value of interest derivatives    -      -     -     -       -   0.3       -       -     - Change in      translation differences    -      -     -     -    -1.6     -       -       -     - Employee        share option scheme         -      -     -   0.9       -     -     0.1       -     - Net profit     for the financial year -      -     -     -       -     -   155.5       -     - Dividend paid  -      -     -     -       -     -   -42.9       -     - Other change    -      -     -     -       -     -     0.1       -     - Equity on    Dec 31,2005  62.4  77.2   0.7   2.5    -3.0  -0.1   420.0     3.7 563.5



CONSOLIDATED CASH FLOW STATEMENT (EUR million)

                                 IFRS      IFRS  Change, %      IFRS                              Jan-Sep/  Jan-Sep/             Jan-Dec/                                  2006      2005                 2005 Cash flows from operating                                            activities Net profit for the period       113.3     113.4          -     156.9 Reversal of accrual-based items  75.7      65.6         15      94.4 Change in working capital      -213.9      -5.0         *)     -26.8 Interest paid                   -13.3     -13.6         -2     -20.8 Interest received                 2.1       0.5         *)       1.3 Taxes paid                      -34.0     -27.0         26     -37.0 Net cash generated from          operating activities            -70.1     133.9          -     168.0                                                                      Cash flows from investing                                            activities Acquisition of                    subsidiaries, net of cash        -8.2      -4.7         74      -4.7 Acquisition of shares in         associated companies             -0.2      -0.2          -         - Purchase of property,           plant and equipment             -21.7     -16.2         34     -23.1 Purchase of intangible assets    -1.9      -0.8         *)      -1.8 Increases in other investments   -0.1      -0.3         67      -0.5           Disposals of subsidiaries          and businesses                    2.5         -          -         - Proceeds from sale of property,              plant and equipment               2.6       4.8        -46       5.1 Proceeds from sale of               intangible assets                   -       0.1          -       0.1 Proceeds from sale of            other investments                 0.4       0.3         33       0.4 Net cash used in investing       activities                      -26.6     -17.0         56     -24.5                                                                      Cash flow from financing                                             activities Proceeds from share issues        2.8       5.1        -45       6.7 Decrease in loan receivables      0.1       0.3        -67         - Change in current liabilities    33.8     -35.1          -     -21.5 Proceeds from borrowings        118.7       1.2         *)         - Repayments of borrowings        -34.5     -23.6         46     -36.4 Payments of financial             leasing debts                    -1.8      -4.4        -59      -5.1 Dividends paid                  -68.9     -42.9         61     -42.9 Net cash used in financing       activities                       50.2     -99.4          -     -99.2                                                                      Net change in cash and           cash equivalents                -46.5      17.6          -      44.3 Cash and cash equivalents        at the beginning of the period   80.6      36.1         *)      36.1 Change in the fair value          of the cash equivalents           0.2      -0.5          -       0.2 Cash and cash equivalents         at the end of the period         34.3      53.2        -36      80.6

*) Change over 100%

COMMITMENTS AND CONTINGENT LIABILITIES (EUR million)

                                 IFRS      IFRS Change, %       IFRS                              Sep/2006  Sep/2005             Dec/2005 Collateral given for own                                             commitments - Corporate mortgages            29.3      29.3         -       29.3 - Pledged shares                  2.0         -         -        1.6 Other commitments                                                    - Repurchase commitments        313.6     235.2        33      266.8 - Operating leases              192.1     181.5         6      189.2 - Rental guarantees for clients   3.8       5.7       -33        3.8 - Other contingent liabilities    2.3       1.4        64        0.4 Liability under derivative                                           contracts **) Value of underlying instruments                                                 -- Interest rate options,            purchased                     28.4      28.4         -       28.4 -- Interest rate swaps           95.0      70.0        36       60.0 -- Foreign currency                 forward contracts            116.2      28.9        *)       70.5 Market value                                                         -- Interest rate options,             purchased                      0.7       0.5        40        0.6 -- Interest rate swaps            0.3      -0.7         -       -0.2 -- Foreign currency                  forward contracts             -1.9       0.8         -       -0.8 Contingent assets                                                    - Legal processes                11.1         -         -          -

*) Change over 100%

**) YIT has changed over to the presentation of the fair values of derivative contracts in net terms. The figures for the comparison periods have been adjusted accordingly.

ACQUIRED BUSINESSES

In 2006, the business functions of Building Systems have been rounded out in Sweden and Norway in line with the strategy. In Sweden, YIT acquired Fläkt Teknik i Umeå AB, a company specializing in ventilation technology in Umeå, the piping company AB Smedby Värme & Sanitet in Kalmari and the electrical company El Persson in Uppsala. YIT acquired two ventilation companies in Norway, URD Klima Mo AS in Mo i Rana and Rune Nilsen Ventilasjon AS in Arendal.

On August 15, 2006, YIT Construction Ltd signed an agreement whereby YIT increased its holding in the Moscow-region housing developer ZAO YIT Moskovia to 82 per cent. YIT’s previous stake in the company was 51 per cent.

As from beginning of 2006, the sum total of the transaction prices was about EUR 12.0 million. The purchase prices were allocated to intangible assets. The acquisitions did not generate unallocated goodwill.

DIVESTED BUSINESSES

During the third quarter of 2006, YIT did not divest businesses.

As from beginning of 2006, the sum total of the transaction prices amounted to about EUR 2.7 million. The value of the net assets sold was about EUR 1.6 million, and thus the pre-tax capital gains on the sales amounted to EUR 1.2 million in the report period.

REVENUE BY BUSINESS SEGMENT (EUR million)

                                 IFRS      IFRS  Change, %      IFRS                              Jan-Sep/  Jan-Sep/             Jan-Dec/                                  2006      2005                 2005 Building Systems *)           1,009.2     994.7          1   1,398.4 Construction Services         1,055.9     925.3         14   1,298.3 Industrial and Network           Services *)                     352.9     291.3         21     398.8 Other items                     -41.7     -47.5        -12     -71.7 YIT Group, total              2,376.3   2,163.8         10   3,023.8

*) At the beginning of 2006, industrial electricity, automation and HEPAC operations were transferred to the business segment from YIT Kiinteistötekniikka Oy. The business functions that will be transferred had revenue of EUR 58.9 million in Jan-Dec/2005.

OPERATING PROFIT BY BUSINESS SEGMENT (EUR million)

                                 IFRS      IFRS  Change, %      IFRS                              Jan-Sep/  Jan-Sep/             Jan-Dec/                                  2006      2005                 2005 Building Systems                 52.6      35.8         47      56.8 Construction Services           120.8     107.7         12     143.1 Industrial and Network         Services                      12.8 *)      27.9        -54      39.1 Other items                     -13.8      -8.9         55     -11.3 YIT Group, total                172.4     162.5          6     227.7

*) The operating profit of the Industrial and Network Services business segment in the third quarter of 2006 includes  EUR 5.1 million in costs for the downsizing of Network Services.

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

                                 IFRS      IFRS  Change, %      IFRS                              Jan-Sep/  Jan-Sep/             Jan-Dec/                                  2006      2005                 2005 Building Systems                582.7     575.7          1     492.0 Construction Services         1,524.4   1,193.8         28   1,242.6 Industrial and Network           Services                        180.3     158.3         14     173.3 Other items                     -41.2     -46.4        -11     -29.1 YIT Group, total              2,246.2   1,881.4         19   1,878.8

 2. OTHER YIT GROUP’S KEY FIGURES

KEY FIGURES

                                 IFRS      IFRS  Change, %      IFRS                              Sep/2006  Sep/2005             Dec/2005 Earnings per share, EUR **)      0.88      0.91         -3      1.26 Diluted earnings per share,     EUR **)                          0.87      0.89         -2      1.23 Equity per share, EUR **)        4.83      4.14         17      4.49 Average share price during       the period, EUR **)             19.11     13.05         46     13.99 Share price at end of            period, EUR **)                 18.27     17.65          4     18.07 Market capitalization at       end of period, MEUR           2,294.4   2,193.2          5   2,254.4 Weighted average share-       issue adjusted number of shares outstanding, thousands **)                 125,154   123,256          2   123,544 Weighted average share-        issue adjusted number of shares outstanding, thousands, diluted **)        126,735   126,346          -   126,522 Share-issue adjusted number   of shares outstanding at end of period, thousands **)  125,581   124,260          1   124,794 Net interest-bearing debt        at end of period, MEUR          416.8     271.8         53     254.4 Return on investment, from        the last 12 months, % 2)         25.2      23.7          -      26.4 Equity ratio, %                  34.6      34.6          -      36.3 Gearing ratio, %                 68.1      52.3          -      45.1 Gross capital expenditures, MEUR 29.9      22.3         34      30.1 -% of revenue                     1.3       1.0          -       1.0 Order backlog at end of        period, MEUR 3)               2,246.2   1,881.4         19   1,878.8 - of which order backlog           outside Finland               908.5     722.6         26     752.4 Average number of personnel    21,704    21,330          2    21,194

**) The per-share key figures presented in the tables have been adjusted for comparability such that they account for the halving of the nominal value of the share, which came into effect on March 24, 2006 (split). The percentage changes have been calculated from the pre-split values.

2) Calculated for the period from October 1, 2005 - September 30, 2006, using the balance sheet figures at September 30, 2005 and September 30, 2006.

3) Portion of binding orders not recognized as income.

QUARTERLY FIGURES, Q1/2005-Q3/2006

                          IFRS  IFRS   IFRS  IFRS  IFRS   IFRS  IFRS                             I/   II/   III/   IV/    I/    II/  III/                           2005  2005   2005  2005  2006   2006  2006                                                   Revenue, MEUR            663.9 745.1  754.8 860.0 768.8  818.0 789.5 Operating profit, MEUR    40.1  55.7   66.7  65.2  53.7   60.1  58.6 - % of revenue             6.0   7.4    8.8   7.6   7.0    7.3   7.4 Financial income, MEUR     0.3   0.4    0.6   0.6   1.3    0.4   0.6 Exchange rate              differences, MEUR          1.5   0.6    0.5  -0.6  -0.6   -0.6  -0.6 Financial expenses, MEUR  -4.5  -4.1   -4.2  -4.0  -4.3   -4.6  -5.9 Profit before taxes, MEUR 37.4  52.6   63.6  61.2  50.1   55.3  52.7 - % of revenue             5.6   7.1    8.4   7.1   6.5    6.8   6.7                                                                 Balance sheet total,     1,508.2    1,621.4     1,722.0      1,925.5 MEUR                         1,612.2      1,688.1      1,847.2                                                                 Earnings per share, EUR**)0.23  0.32   0.36  0.35  0.29   0.31  0.28 Equity per share, EUR **) 3.48  3.77   4.14  4.49  4.23   4.54  4.83 Share price at end of     period, EUR **)          10.92 13.80  17.65 18.07 22.38  19.17 18.27 Market capitalization 1,338.6      2,193.2     2,792.9      2,294.4 at end of period, MEUR      1,711.2      2,254.4      2,406.7                                                                 Return on investment,from     the last 12 months, %    19.7  21.8   23.7  26.4  28.1   28.2  25.2 Equity ratio, %          30.1  31.8   34.6  36.3  33.5   34.5  34.6 Net interest-bearing debt     at end of period, MEUR  368.1 313.6  271.8 254.4 334.2  342.5 416.8 Gearing ratio, %         85.6  66.6   52.3  45.1  62.7   59.5  68.1                                                                   Gross capital               expenditures, MEUR        7.0  14.1   22.3  30.1   9.1   18.7  29.9 Order backlog at end  1,909.4      1,881.4     2,007.2      2,246.2 of period, MEUR             1,999.2      1,878.8      2,151.3 Personnel at end of   period              21,096 21,297 21,468 21,289 21,140  21,873 22,188                 

**) The per-share key figures presented in the tables have been adjusted for comparability such that they account for the halving of the nominal value of the share, which came into effect on March 24, 2006 (split).

REVENUE BY BUSINESS SEGMENT (EUR million)

                          IFRS  IFRS   IFRS  IFRS  IFRS   IFRS  IFRS                             I/   II/   III/   IV/    I/    II/  III/                           2005  2005   2005  2005  2006   2006  2006 Building Systems         319.5 348.0  327.2 403.7 325.6  348.4 335.2 Construction Services    272.0 313.8  339.5 373.0 350.8  368.1 337.0 Industrial and Network     Services                  85.6 100.7  105.0 107.5 107.7  116.9 128.3 Other items              -13.2 -17.4  -16.9 -24.2 -15.3  -15.4 -11.0 YIT Group, total         663.9 745.1  754.8 860.0 768.8  818.0 789.5

OPERATING PROFIT BY BUSINESS SEGMENT (EUR million)

                          IFRS  IFRS   IFRS  IFRS  IFRS   IFRS  IFRS                             I/   II/   III/   IV/    I/    II/  III/                           2005  2005   2005  2005  2006   2006  2006 Building Systems           8.2  14.3   13.3  21.0  11.7   19.8  21.1 Construction Services     29.4  34.2   44.1  35.4  40.7   40.5  39.6 Industrial and Network      Services                   6.3   9.3   12.3  11.2   5.3    5.0   2.5 Other items               -3.8  -2.1   -3.0  -2.4  -4.0   -5.2  -4.6 YIT Group, total          40.1  55.7   66.7  65.2  53.7   60.1  58.6

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

                          IFRS  IFRS   IFRS  IFRS  IFRS   IFRS  IFRS                             I/   II/   III/   IV/    I/    II/  III/                           2005  2005   2005  2005  2006   2006  2006 Building Systems         574.0 602.6  575.7 492.0 517.6  584.1 582.7 Construction Services  1,131.0      1,193.8     1,296.5      1,524.4                              1,263.3      1,242.6      1,391.8 Industrial and Network    Services                 234.4 187.3  158.3 173.3 219.5  208.4 180.3 Other items              -30.0 -54.0  -46.4 -29.1 -26.4  -33.0 -41.2 YIT Group, total       1,909.4      1,881.4     2,007.2      2,246.2                              1,999.2      1,878.8      2,151.3