Release Date: July 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- YIT Oyj (YITYY, Financial) achieved its transformation program's cost savings target of EUR40 million ahead of schedule.
- The Infrastructure segment significantly increased its profitability, achieving an adjusted operating profit of over 6% for the quarter.
- Apartment sales in Finland have been growing for the fifth consecutive quarter, with a 13% reduction in unsold apartments.
- The company successfully completed a comprehensive multistep financing process, improving the maturity profile of its debt portfolio.
- YIT Oyj (YITYY) released approximately EUR140 million of capital over the last four quarters through its capital release program.
Negative Points
- Quarterly revenue declined to EUR434 million, primarily due to onetime events in the Housing segment.
- The adjusted operating profit decreased to EUR7 million for the quarter, impacted by onetime costs.
- The Housing Finland segment reported a negative result of EUR6 million, with a significant decline in revenue and profitability.
- Onetime costs amounted to EUR49 million, including EUR28 million related to transformation cost savings and EUR19 million from historical project closures in Sweden.
- The Finnish housing market remains weak, with no new start-ups observed and a low supply expected in 2025.
Q & A Highlights
Q: What makes you confident about achieving a positive cash flow after investments this year?
A: The major source of operating cash flow is our businesses, with three out of four segments providing cash flow. The Infrastructure business, for example, is operating with positive cash flow and negative capital employed. We will also support cash flow development by continuing the execution of the capital release program. - Tuomas Maekipeska, CFO
Q: Can you provide details on the closure of the Infra business in Sweden and any associated costs?
A: We have started closing down the Swedish operations, with onetime costs related to historical project closures. The volume of the Swedish Infra business is decreasing, with few projects continuing beyond this year. We are using Finnish teams to ensure commitments are met, and no major impacts have been observed. - Heikki Vuorenmaa, CEO
Q: How does the unchanged EBIT guidance of EUR20 million to EUR60 million align with the downgraded Q4 outlook for Housing Finland?
A: Three of the four business segments are performing well, providing cash flow and profits. The guidance considers the weak Finnish housing market, and the performance of other segments like Baltics and CEE, Infra, and Business Premises is expected to support the overall outlook. - Tuomas Maekipeska, CFO
Q: Can you elaborate on the EUR20 million impact from subleasing headquarters?
A: As part of our transformation program, we assessed the need for our premises and decided to sublease part of our headquarters to improve efficiency. This operational change was part of the transformation program, and we have written down part of the right-of-use asset as a result. - Heikki Vuorenmaa, CEO and Tuomas Maekipeska, CFO
Q: How do joint ventures in CEE impact profitability?
A: Joint ventures, mainly with RSJ Investments, allow us to increase volumes and profits while tying up less capital. This approach optimizes the return on capital employed in CEE countries and on a group level. Profits from joint ventures are reflected in our P&L. - Tuomas Maekipeska, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
