Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Profitability increased in all segments during the quarter, resulting in a positive cash flow.
- The company upgraded its view on the Baltics residential market, indicating a return to normal market conditions.
- YIT Oyj (FRA:YIT, Financial) sold a total of 550 homes to consumers during the quarter, showing strong sales performance.
- The Infra segment showed consistent performance with a strong order book and solid profitability.
- The transformation program achieved its cost savings target of EUR40 million ahead of schedule, contributing to improved profitability.
Negative Points
- Revenue declined to EUR450 million, partly due to the absence of one-off transactions from the previous year.
- The order backlog decreased by 19% year-on-year, which could impact future revenues.
- Housing Finland's turnover and profitability decreased year-on-year, despite a positive EUR6 million item.
- The company did not launch any new self-developed projects in Finland during the first 9 months, limiting future growth potential.
- Net debt remained high at EUR790 million, with only minor amortizations planned for the near future.
Q & A Highlights
Q: Could you elaborate on the order backlog situation and its impact on revenues?
A: The order backlog is down due to low start-ups in Finland. In the Baltics and CEE, completions exceeded start-ups, causing a small decline. However, growth is expected in these areas. The Infra segment has a strong order book for 24 months, and Business Premises is focusing on maintaining healthy margins.
Q: Can you explain the EUR6 million reversal cost in Housing and the increased net financing costs?
A: The EUR6 million is a correction related to a 10-year liability period for residential projects in Finland, reflecting a decrease in the number of apartments within that period. The increased net financing costs are due to higher market interest rates, not changes in capitalized interest rates.
Q: How does the potential sale of Kamppi affect the valuation of your stake in Tripla?
A: The Kamppi transaction is not a full sale, and the same third party advising on Kamppi's yield is also advising on Tripla. We haven't seen changes in Tripla's yield, and a sizable transaction like Kamppi could indicate market recovery in Finland.
Q: What is your strategy regarding discounts in Finland and the Baltics and CEE?
A: In Finland, discounts are offered through campaigns and individual negotiations, depending on location and project type. In the Baltics and CEE, there is no major need for discounts as the market is healthy.
Q: What are your criteria for starting new housing projects, and how do they affect net debt?
A: Criteria for starting projects vary by location and market conditions. Typically, pre-reservation rates above 50% are required. Starting new projects will reduce inventory and turn plots into cash, supporting net debt management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
