YIT Corporation Stock Exchange Release
YIT's Interim Report January-March 2024
Cash flow and financial position improved, profitability impacted by the Finnish housing market and rising yields
First quarter 2024 in brief
Order book was
EUR 3,091 million (31 Dec 2023 : 3,157). Order book remained stable in Housing and Business Premises and decreased slightly in Infrastructure. At the end of the quarter, 74% of the order book was sold (31 Dec 2023 : 74%).
Revenue decreased to
EUR 412 million (455). In Housing, revenue decreased mainly due to lower number of completions in the Baltic and CEE countries. Revenue increased in Business Premises and decreased in Infrastructure, mainly due to revenue decrease in businesses to be closed down.
The underlying operating performance was on the previous year's level, but the adjusted operating profit decreased to
EUR -14 million (-3). The decrease was mainly due to a decrease in the fair value ofTripla Mall caused by a yield increase, impacting the adjusted operating profit byEUR -12 million . The adjusted operating profit margin was -3.4% (-0.7).
Operating cash flow after investments increased significantly to
EUR 1 million (-216). Cash and cash equivalents at the end of the period amounted toEUR 268 million (31 Dec 2023 : 128), supported by the successful financing arrangement.
Net interest-bearing debt decreased to
EUR 768 million (837), and gearing improved to 89% (101). Both net interest-bearing debt and gearing also decreased compared to the previous quarter.
In Housing, adjusted operating profit decreased to
EUR -4 million (4), impacted by low consumer sales inFinland and a lower number of completions in the Baltic and CEE countries. Consumer apartment start-ups increased to 478 (29), All the start-ups in the first quarter were in the Baltic and CEE countries. The number of unsold completed apartments increased to 1,359 (31 Dec 2023 : 1,267).
In Business Premises, adjusted operating profit decreased to
EUR -11 million (-7). The underlying performance for the segment improved and was positive. Based on market data, the yield for theTripla Mall was increased during the quarter. The increase in the yield impacted the adjusted operating profit of the segment byEUR -12 million .
In Infrastructure, adjusted operating profit amounted to
EUR 1 million (1).
On
9 January 2024 , YIT announced that it had agreed on the sale of the entire share capital of service equipment businessYIT Kalusto Oy toRenta Oy . The transaction was completed on29 February 2024.
Result for the period was
EUR -16 million (-14).
On
12 March 2024 YIT announced that it had executed a substantial financing arrangement including equity and enhancements to existing loan terms, leading to an improvement in liquidity in excess ofEUR 100 million . The financing arrangement comprised a directed share issue ofEUR 33.5 million at market price, an issue ofEUR 36 million convertible notes due inMarch 2029 with a coupon of 8% p.a. and a strike price ofEUR 2.25 per share. Furthermore, lenders agreed to make amendments to the existing revolving credit facility (EUR 300 million ) and the term loan (EUR 140 million ) including maturity extensions and other positive amendments to key loan terms and postponements of amortisations. Combined, the amendments to loan terms increase available liquidity by overEUR 30 million . Above mentioned agreed amendments to existing loan facilities have entered into force inApril 2024.
Key figures
EUR million | 1-3/24 | 1-3/23 | 1-12/23 |
---|---|---|---|
Revenue | 412 | 455 | 2,163 |
Operating profit | -8 | -7 | 51 |
Operating profit, % | -2.0 | -1.6 | 2.4 |
Adjusted operating profit | -14 | -3 | 41 |
Adjusted operating profit margin, % | -3.4 | -0.7 | 1.9 |
Result before taxes | -22 | -19 | -5 |
Result for the period | -16 | -14 | 3 |
Earnings per share, EUR | -0.08 | -0.07 | -0.01 |
Operating cash flow after investments | 1 | -216 | -137 |
Net interest-bearing debt | 768 | 837 | 795 |
Gearing ratio, % | 89 | 101 | 94 |
Equity ratio, % | 33 | 33 | 33 |
Return on capital employed, % (ROCE, rolling 12 months) | 1.8 | 6.0 | 2.5 |
Order book | 3,091 | 3,542 | 3,157 |
Combined lost time injury frequency (cLTIF, rolling 12 months) | 11.4 | 13.5 | 12.1 |
Customer satisfaction rate (NPS) | 53 | 47 | 54 |
Unless otherwise noted, the figures in brackets in this report refer to the corresponding period in the previous year.
Comments from the President and CEO, Heikki Vuorenmaa
"Year 2024 started on a positive note, with continued strong housing sales in
We improved our Group operating cash flow after investments by over
The Housing segment's profitability continued to be muted due to prevailing market conditions in
In Business Premises, revenue increased and the underlying performance improved. Burden from the fixed price contracts starts to be behind and segment can focus on increasing margins. While the segment's underlying performance improved and was positive, the reported adjusted operating profit decreased mainly due to a decrease in fair values driven by the increase of the market yield for
In Infrastructure, the operations continued to be solid in the quarter. As a result of the decision to close down the Swedish operations and the successful divestment of the equipment services business, we focus on businesses in which we have a competitive advantage. The Finnish infrastructure market is active and there are several tenders ongoing, that fit our expertise well. As an example of the recent successes, we signed an agreement on the implementation of the excavation contract for Espoo City Rail in March.
Given the market uncertainty in
Results
January-March
YIT's order book decreased slightly from the previous quarter to
YIT's revenue decreased from the comparison period to
The underlying operating performance was on the previous year's level, but the adjusted operating profit decreased to
YIT's operating profit was
Guidance and outlook for 2024
YIT expects its Group adjusted operating profit for continuing operations to be
The housing market recovery in the Baltic countries and
YIT's performance will be supported by the increased efficiencies from the transformation program launched on
Changes in the macroeconomic environment, especially in interest rates, may impact the housing market demand and the fair value of investments. Delayed apartment completions could lead to the postponement of revenue and profit from one quarter or year to another. Actions to release capital may have an impact on the company's profit.
Webcast for investors and the media
A webcast and an international telephone conference will be arranged on
The webcast can be followed at https://yit.videosync.fi/q1-2024/ and at the company's web site at www.yitgroup.com/investors. A recording of the webcast will be available at the same address later that day.
The teleconference can be accessed by registering at: https://palvelu.flik.fi/teleconference/?id=50048710. After the registration, participants will be provided with phone numbers and a conference ID to access the conference. To ask a question, please dial *5 on your telephone keypad to enter the queue.
The event is targeted for investors, analysts and the media. Welcome!
For further information:
YIT Corporation
Tuomas Mäkipeska
CFO
Distribution: Nasdaq
YIT is a leading construction and development company. Building on over 110 years of experience, we develop and build sustainable living environments: functional homes, future-proof public and commercial buildings, and infrastructure to support the green transition. We employ approximately 4,300 professionals in eight countries. Our revenue in 2023 was
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