Construction company YIT has reported strong results across all its contracting segments and in Housing Baltic and Central and Eastern Europe (CEE) countries in the third quarter (Q3) of 2024.
During the Q3 2024 period from July to September, adjusted operating profit increased from €17m in the previous year quarter to €26m ($28.24m) and an enhanced margin of 5.6%.
Operating profit was €13m and adjusting items were €12m, partly due to transformation programme costs and increased net finance costs, which rose to €20m from €13m, driven by a higher interest rate environment.
Revenue decreased to €453m ($490.9m) in the quarter, down from €553m in the same period last year.
The decrease was particularly noted in Finland’s Housing segment, although there was an increase in the Baltic and Central Eastern Europe (CEE) countries. Business Premises revenue also declined, influenced by the previous year's sale of the Maistraatinportti office property.
On the other hand, Infrastructure revenue saw an uptick, bolstered by industrial construction activities.
YIT president and CEO Heikki Vuorenmaa added: “Markets are active in both Infrastructure and Business Premises, and multiple large projects are in the tendering phase, for example, in the industrial sector. We are particularly focused on complex projects that require high-level engineering skills.”
The company's operating cash flow after investments stood at €2m.
The order book at the end of the period was valued at €2.7bn, a slight decrease from €2.9bn, as of 30 June 2024. However, the percentage of the order book sold increased marginally to 77%.
In the Housing segment, adjusted operating profit increased to €13m, with consumer apartment starts predominantly in the Baltic and CEE countries. The number of unsold completed apartments declined, with a notable reduction in Finland.
Business Premises adjusted operating profit rose to €6m, and Infrastructure adjusted operating profit increased to €5m, supported by steady project performance in Finland.
However, the result for the period was a loss of €6m, contrasting with a €1m profit in the previous year.
Vuorenmaa added: “Profitability improved in all our segments in the third quarter, reflecting the results of our transformation programme. The actions we have taken to focus on our core businesses, to upskill our people in supply chain and project management capabilities, and to enhance commercial excellence are paying off. Both contracting segments improved their performance in the third quarter.”
YIT's revenue decreased to about €1.3bn, and adjusted operating profit declined to €18m for the January to September 2024 period. Despite this, the company's transformation programme exceeded expectations, delivering cost savings ahead of schedule.
Looking ahead, YIT expects its adjusted operating profit for continuing operations to be between €20m and €60m in 2024, with a positive operating cash flow after investments.
The company anticipates a continued recovery in the housing market in the Baltic countries and CEE, while no significant improvement is expected in Finland.
Business Premises and Infrastructure segments are projected to see improved operational performance.
