YIT Corporation Half-Year Report July 25, 2025, at 8:30 a.m.
YIT's Half-Year Report January-June 2025
Adjusted operating profit improved in Q2, production accelerated in Residential
CEE to meet the market demand
Second quarter of 2025 in brief
· Order book amounted to EUR 2,961 million (31 Mar 2025: 3,026). At the end of
the period, 77% of the order book was sold (31 Mar 2025: 77%).
· Revenue decreased to EUR 412 million (434), primarily impacted by zero
apartment completions in the residential segments in the second quarter.
· Adjusted operating profit increased to EUR 10 million (7). Adjusted
operating profit margin increased to 2.4% (1.6).
· Operating profit for the period increased to EUR 7 million (-42). Comparison
period's operating profit was impacted by the transformation program costs and
operations to be closed down.
· Operating cash flow after investments decreased to EUR -29 million (-6).
· Net interest-bearing debt decreased to EUR 670 million (788), and gearing
decreased to 84% (97) at the end of the period.
· In Residential Finland, adjusted operating profit increased to EUR 2 million
(-6). Consumer apartment sales decreased to 133 (154) apartments. Consumer
apartment starts in the quarter increased to 51 (0). The number of unsold
completed apartments decreased to 587 (31 Mar 2025: 682).
· In Residential CEE, adjusted operating profit decreased to EUR -2 million
(2). Consumer apartment sales increased to 279 (198) apartments. Consumer
apartment starts increased to 648 (186). The number of unsold completed
apartments decreased to 195 (31 Mar 2025: 273).
· In Building Construction, adjusted operating profit increased to EUR 6
million (5).
· In Infrastructure, adjusted operating profit decreased to EUR 5 million (6).
· Result for the period was EUR -8 million (-51). Comparison period's result
was impacted by the transformation program costs and operations to be closed
down.
· YIT announced in May 2025 the successful issuance of new EUR 100 million
hybrid bond and tendering of EUR 53,940,000 of its old EUR 100 million hybrid
bond issued in 2021.
· YIT announced in May 2025, that Justyna Filipczak has been appointed as
Executive Vice President, Residential CEE segment and member of the YIT
Leadership Team starting August 4, 2025.
· YIT narrows the range for the adjusted operating profit guidance for year
2025 as a result of solid financial performance of the businesses during the
first half of the year. YIT now expects its Group adjusted operating profit for
continuing operations to be EUR 30-60 million in 2025. Previously, YIT expected
its Group adjusted operating profit for continuing operations to be EUR 20-60
million in 2025.
January-June 2025 in brief
· Revenue decreased to EUR 798 million (846).
· Adjusted operating profit increased to EUR 17 million (-7). The adjusted
operating profit margin was 2.2% (-0.9). The comparison period included an EUR
-11 million change in the fair value of equity investments in the first quarter
of 2024.
· Operating profit for the period increased to EUR 13 million (-51).
Comparison period's operating profit was impacted by the transformation program
costs and operations to be closed down.
· Operating cash flow after investments decreased to EUR -45 million (-6).
· In Residential Finland, adjusted operating profit amounted to EUR 0 million
(-13). Consumer apartment sales decreased to 241 (289) apartments. Consumer
apartment starts increased to 134 (0).
· In Residential CEE, adjusted operating profit decreased to EUR 3 million
(4). Consumer apartment sales increased to 614 (435) apartments. Consumer
apartment starts increased to 1,194 (664).
· In Building Construction, adjusted operating profit increased to EUR 8
million (-6). The comparison period included a EUR -10 million change in the
fair value of segment's equity investments in the first quarter of 2024.
· In Infrastructure, adjusted operating profit increased to EUR 8 million (6).
· Result for the period was EUR -18 million (-67). Comparison period's result
was impacted by the transformation program costs and operations to be closed
down.
Unless otherwise noted, the figures in brackets in this report refer to the
corresponding period in the previous year.
Key figures
+-----------------------------+------+------+------+------+-------+
|EUR million |4-6/25|4-6/24|1-6/25|1-6/24|1-12/24|
+-----------------------------+------+------+------+------+-------+
|Revenue |412 |434 |798 |846 |1,820 |
+-----------------------------+------+------+------+------+-------+
|Operating profit |7 |-42 |13 |-51 |-55 |
+-----------------------------+------+------+------+------+-------+
|Operating profit, % |1.6 |-9.8 |1.6 |-6.0 |-3.0 |
+-----------------------------+------+------+------+------+-------+
|Adjusted operating profit |10 |7 |17 |-7 |32 |
+-----------------------------+------+------+------+------+-------+
|Adjusted operating profit |2.4 |1.6 |2.2 |-0.9 |1.7 |
|margin, % | | | | | |
+-----------------------------+------+------+------+------+-------+
|Result before taxes |-7 |-57 |-15 |-79 |-118 |
+-----------------------------+------+------+------+------+-------+
|Result for the period |-8 |-51 |-18 |-67 |-112 |
+-----------------------------+------+------+------+------+-------+
|Earnings per share, EUR |-0.05 |-0.23 |-0.09 |-0.31 |-0.51 |
+-----------------------------+------+------+------+------+-------+
|Operating cash flow after |-29 |-6 |-45 |-6 |110 |
|investments | | | | | |
+-----------------------------+------+------+------+------+-------+
|Net interest-bearing debt |670 |788 |670 |788 |680 |
+-----------------------------+------+------+------+------+-------+
|Gearing ratio, % |84 |97 |84 |97 |88 |
+-----------------------------+------+------+------+------+-------+
|Equity ratio, % |37 |33 |37 |33 |34 |
+-----------------------------+------+------+------+------+-------+
|Return on capital employed, %|3.9 |1.4 |3.9 |1.4 |2.1 |
|(ROCE, rolling 12 months) | | | | | |
+-----------------------------+------+------+------+------+-------+
|Order book |2,961 |2,980 |2,961 |2,980 |2,941 |
+-----------------------------+------+------+------+------+-------+
|Combined lost time injury |9.4 |10.0 |9.4 |10.0 |9.6 |
|frequency (cLTIF, rolling 12 | | | | | |
|months) | | | | | |
+-----------------------------+------+------+------+------+-------+
|Customer satisfaction rate |58 |55 |58 |55 |57 |
|(NPS) | | | | | |
+-----------------------------+------+------+------+------+-------+
Comments from the President and CEO, Heikki Vuorenmaa
“Our operational performance continued to improve in the second quarter of the
year. Execution of our strategy is progressing well, supporting the improvement
of the Group's financial performance. While our profitability improved, the
revenue continued to decline. The six-month gap in apartment completions across
both our residential segments is impacting revenue and profit generation. We can
therefore expect the revenue and profit generation in the third quarter to
reflect similar limitations. At the same time, we are launching new residential
projects with good reservation and sales rates. These project starts will
support our financial performance in 2026.
Demand continued to be favorable in the Residential CEE segment, with consumer
apartment sales increasing by over 40% from the previous year in the first half
of 2025. We have launched new projects valued at nearly EUR 400 million with
healthy margins, which are scheduled to be completed in 2026. Our strong
portfolio of plots with existing building rights supports the growth in Central
Eastern Europe, and we are prepared to start new projects. Demand and supply
have remained balanced, and the inventory is at a desired level. This year,
completions in the segment will be heavily concentrated into the fourth quarter
of the year. Recognizing profit at completion will thus make the profit
generation backend-loaded in the segment in 2025.
The recovery of the Finnish residential market has progressed gradually, in line
with our expectations. The secondary market is gaining momentum, and mortgage
drawdowns increased by 18% in January-May 2025 according to the Bank of Finland
statistics. We have also observed increased activity in the investor market,
with new capital flowing into the sector. We anticipate that primary apartment
market sales volumes will slightly increase during 2025. A decrease in interest
rates and increased consumers' purchasing power have a positive impact on
demand.
Operational efficiency in the Residential Finland segment has improved, and the
sales mix was favorable in the first half of the year. We have initiated new
self-developed projects in locations where the demand supports the starts and
plan to continue with project starts as the year progresses. Our stock of
completed apartments has reached normal levels outside the capital area. The
excess stock in the capital region is gradually decreasing.
Accelerating production in the Residential CEE segment has not required
significant amount of new capital. This is attributed to our strong existing
plot portfolio enabling the construction of over 13,000 new homes. On a Group
level, we identify potential to release approximately EUR 200 million of capital
from our current apartment inventory. In addition, we identify potential to
release up to EUR 300 million through divestments of non-core assets, in line
with our current strategy. The released capital will be reallocated to support
the growth of residential construction in European markets where we identify the
strongest demand and value creation potential.
The infrastructure market in Finland is active in both the public and private
sectors, driven by increased defense sector investments and positive
developments in industrial construction and the renewable energy market. Our
Infrastructure segment continued its solid performance, improving both revenue
and profit in the first half of the year. The segment is well positioned to
pursue growth and further enhance operational efficiencies.
The Building Construction segment has continued to improve its profitability.
Despite the highly competitive market, we have continued to win both public and
private sector projects, supported by our core competencies and expertise.
Activity in data centers and industrial projects is increasing, in line with our
strategic focus. Our ability to successfully execute these complex projects
gives us a competitive advantage in the market. The segment's performance is
developing positively, and our efforts continue.
The market outlook for our businesses looks favorable on many fronts. The
investment plans within our operating countries in the industrial construction,
energy and defense sectors are substantial and are likely to create
opportunities for both of our contracting segments. At the same time, global
turbulence and uncertainty is affecting consumer confidence and is also likely
to bring uncertainty into companies' decision-making in relation to investments.
We have been chosen as the number one employer for students and professionals in
the construction industry in Finland for several years, with the latest
recognition coming from Universum in June 2025. We offer trainee positions to
hundreds of young people each year. We are proud to provide our trainees with an
excellent training experience and to help them advance in their career by
offering continuous learning opportunities, guidance and feedback. Our success
is built on our versatile and skilled professionals. We have succeeded in
strategic recruitments that support growth, while maintaining our core
competencies through challenging years. This will strengthen our performance as
we steer the business onto a selective growth path and help us further improve
the customer experience.”
Results
April-June
YIT's order book amounted to EUR 2,961 million (31 Mar 2025: 3,026). At the end
of the quarter, 77% of the order book was sold (31 Mar 2025: 77%).
YIT's revenue decreased from the comparison period to EUR 412 million (434).
Revenue increased in Infrastructure and decreased in Residential Finland,
Residential CEE and Building Construction.
Adjusted operating profit for the quarter increased to EUR 10 million (7).
Adjusted operating profit margin increased to 2.4% (1.6). Adjusted operating
profit increased in Residential Finland and Building Construction and decreased
in Residential CEE and Infrastructure.
YIT's operating profit increased to EUR 7 million (-42). Adjusting items
amounted to EUR 3 million in the second quarter (49). Adjusting items in the
comparison period included costs of transformation program and operating profit
from operations to be closed down in Sweden. Net finance costs amounted to EUR
13 million (15). The result for the period was EUR -8 million (-51).
January-June
YIT's revenue decreased to EUR 798 million (846). Revenue increased in
Residential CEE and Infrastructure and decreased in Residential Finland and
Building Construction.
YIT's adjusted operating profit increased to EUR 17 million (-7) and the
adjusted operating profit margin increased to 2.2% (-0.9). Adjusted operating
profit increased in Residential Finland, Building Construction and
Infrastructure and decreased in Residential CEE. The comparison period included
an EUR -11 million change in the fair value of equity investments in the first
quarter of 2024.
YIT's operating profit increased to EUR 13 million (-51). Adjusting items
amounted to EUR 5 million (43). Adjusting items in the comparison period
included costs of transformation program and operating profit from operations to
be closed down. Net finance costs amounted to EUR 27 million (29). The result
for the period amounted to EUR -18 million (-67). Earnings per share was EUR
-0.09 (-0.31).
Guidance and outlook for 2025
YIT narrows the range for the adjusted operating profit guidance for year 2025
as a result of solid financial performance of the businesses during the first
half of the year.
New guidance for 2025
YIT expects its Group adjusted operating profit for continuing operations to be
EUR 30-60 million in 2025.
Previous guidance for 2025, issued on February 7, 2025
YIT expects its Group adjusted operating profit for continuing operations to be
EUR 20-60 million in 2025.
Outlook for 2025
The residential market in the Baltic countries and Central Eastern Europe is
expected to continue favorable, contributing positively to Residential CEE
segment's capability to generate profit. Timing of the residential project
completions may deviate from the original estimates leading to revenue and
profit recognition shifting from one quarter or a year to another.
In Finland, the primary apartment market sales volumes are expected to slightly
increase during 2025. In Residential Finland segment, low amount of completions
during 2025 will limit the segment's capability to generate profit.
In Building Construction, the operational performance is expected to improve.
Actions to release capital may have an impact on the segment's profit.
In Infrastructure, the operational performance is expected to remain stable.
Changes in the macroeconomic environment, especially in interest rates, may
impact the residential market demand and the fair value of investments. The
escalation of geopolitical risks reflected in general uncertainty and demand
could have a negative impact on the company's financial position.
Webcast for investors and the media
A webcast in English and an international telephone conference will be arranged
on July 25, 2025, at 10:00 a.m. EEST. The results will be presented by Heikki
Vuorenmaa, President and CEO of YIT Corporation, and CFO Tuomas Mäkipeska.
The webcast can be followed at https://yit.events.inderes.com/q2-2025/. A
recording of the webcast will be available at the company's website after the
event.
The teleconference can be accessed by registering at:
https://palvelu.flik.fi/teleconference/?id=50051806. 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:
Essi Nikitin, Vice President, Investor Relations, YIT Corporation, tel. +358 50
581 1455, essi.nikitin@yit.fi
YIT Corporation
Tuomas Mäkipeska
CFO
Distribution: Nasdaq Helsinki, major media, www.yitgroup.com
We build and develop sustainable living environments: functional and attractive
homes, future-proof public and commercial buildings, infrastructure to support
the green transition as well as industrial, production, and energy facilities to
support our customers' processes. YIT's vision is to be the expert partner in
developing sustainable homes, spaces, and cities - for a good life. There are
approximately 4,100 professionals in our team and our revenue in 2024 was EUR
1.8 billion. YIT Corporation's shares are listed on Nasdaq Helsinki.
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