YIT OYJ Q1/2024
Interim Report January - March 2024
Heikki Vuorenmaa, President and CEO Tuomas Mäkipeska, CFO
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2
Cash flow and financial position improved, profitability impacted by the Finnish housing market and rising yields
Underlying operating performance was solid, profitability was affected by EUR 12 million negative impact from the yield increase
in Tripla Mall
Group operating cash flow after investments was positive and improved by over EUR 200 million
Consumer apartment sales increased by 59% y-o-y, fifth consecutive quarter of sales growth in the Baltic and CEE countries
3 | Aromapark, Warsaw, Poland |
Adjusted operating profit affected by a decrease in fair values
Revenue
EUR million
455
412
-9%
Q1 2023 | Q1 2024 |
Adjusted operating profit | Adjusted operating profit | |||||
EUR million | margin, % | |||||
Q1 2023 | Q1 2024 | Q1 2023 | Q1 2024 | |||
-3
-0.7
-14
-3.4
Includes a EUR 12 million negative impact from the yield increase in Tripla Mall.
4 | Prysmian Group Tower, |
Kirkkonummi, Finland |
Uncertainty in the Finnish housing market remains, operational performance improving in other businesses
YIT Group, EUR million
Adj. operating profit | Net sales | Adj. OP, % |
-14(-3) | 412 (455) | -3.4 (-0.7) |
(previous year comparable period in parenthesis)
EUR million
- Housing market in Finland remained weak impacting both net sales and profitability
- Strong performance in Housing operations in Baltic and CEE countries, lower number of completions reflected in the Q1 results
- Profitability remained stable in Infrastructure
- Improved underlying performance in Business Premises, adjusted operating profit affected by the yield increase in Tripla Mall
Housing Finland | Housing Baltic and CEE | Infrastructure | Business Premises | Includes | ||||||||||||||||||||
a EUR 12 | ||||||||||||||||||||||||
million | ||||||||||||||||||||||||
1 | 2 | 3 | 4 | |||||||||||||||||||||
Adj. operating profit | negative | |||||||||||||||||||||||
Adj. operating profit | Adj. operating profit | Adj. operating profit | impact from | |||||||||||||||||||||
-7(-5) | 2(9) | 1(1) | - 11(-7) | the yield | ||||||||||||||||||||
increase in | ||||||||||||||||||||||||
Tripla Mall | ||||||||||||||||||||||||
Net sales | Adj. OP, % | Net sales | Adj. OP, % | Net sales | Adj. OP, % | Net sales | Adj. OP, % | |||||||||||||||||
113 | -5.9 | 57 | (74) | 3.8 | (12.1) | 85(109) | 0.7 | (0.6) | 169 | -6.5 | ||||||||||||||
(120) | (-4.3) | (161) | (-4.3) | |||||||||||||||||||||
5
Housing Finland:
Consumer sales continued low
Capital employed, EUR million | Order book, EUR million | |||||||||||||||||||||||||||
705 | 1096 | |||||||||||||||||||||||||||
691 | 689 | |||||||||||||||||||||||||||
910 | ||||||||||||||||||||||||||||
648 | 648 | 1,000 | 779 | 720 | 681 | |||||||||||||||||||||||
729 | ||||||||||||||||||||||||||||
890 | 644 | |||||||||||||||||||||||||||
743 | 620 | 562 | 528 | |||||||||||||||||||||||||
582 | 623 | 367 | ||||||||||||||||||||||||||
266 | ||||||||||||||||||||||||||||
159 | 158 | 154 | ||||||||||||||||||||||||||
Q1/23 | Q2/23 | Q3/23 | Q4/23 | Q1/24 | Q1/23 | Q2/23 | Q3/23 | Q4/23 | Q1/24 | |||||||||||||||||||
Unsold completed apartments, housing units | Order book, sold | Order book, unsold | ||||||||||||||||||||||||||
The stock of unsold completed | Orderbook declined as a result of low | |||||||||||||||||||||||||||
apartments burdens the capital | number of start-ups. | |||||||||||||||||||||||||||
employed. | ||||||||||||||||||||||||||||
6
Quarterly adj. operating profit,
EUR million
8 | Target |
>10% |
2
-5
-7
-15
Q1/23 Q2/23 Q3/23 Q4/23 Q1/24
Adj. OPM (%), rolling 12 months
Adjusted operating profit remained negative, affected by the weak market conditions.
The increase in apartment sales supported by successful campaigns
Interest rate cap campaign | Rent-to-buy campaign |
YIT pays a 2% interest rate cap for five years on the reference mortgage rate for mortgage loan of YIT Home buyer, when the customer takes out a loan from a YIT partner bank and completes a purchase of a ready-for-occupancy YIT Home.
The process of buying a home starts with renting it. First, a preliminary contract is signed, subject to a deposit. Within two years of signing the preliminary contract, the buyer can become the homeowner. The deposit and rents paid will be deducted from the price when the sale is completed.
"In a challenging market, it was nice to take advantage of a great benefit where costs are known in advance. At the same time, the family got just the right apartment at a moderate cost compared to renting, now the mortgage taken on the apartment is effectively paid off in the background."
"The interest rate cap brings stability to everyday life and even though the existing home was unsold, the interest rate cap made it possible to buy a new home, protecting overall household expenditure."
"Everything was handled smoothly and professionally. The interest rate cap was the main trigger for buying a new home for us."
"The Rent-to-buy deal enabled a smooth move from another area to a new home."
"Our son will later redeem our current apartment as his own, so we were able to move to a new home near the city center."
"We lived in the same area in a housing cooperative and want to stay in the area. We have previously bought an investment apartment in this building. The cost of living in the housing cooperative was slightly higher than the rent of this new home."
7
Finnish housing market completions outlook Q1 2024 - Q4 2025
Self-developed housing unit completions in the Finnish housing market
• 4,600 unsold completed apartments in |
Finland at the end of March 2024, out of |
1,257
642
615
981
394
587
Year 2024
total: 3,802
1,089
640 | ||||
550 | ||||
475 | ||||
404 | ||||
299 | ||||
449 | ||||
176 | ||||
146 | ||||
Sold completions
Unsold completion
Year 2025 total: 835
200
85 146
72
13 54
which 1,000 (~20%) YIT's |
• 2024 start-ups are expected to remain on |
low level, availability of housing may |
become bottleneck for cities growth |
• With current outlook, completions during |
2025 will be historically low. |
Q1 2024 | Q2 2024 | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | Q4 2025 |
Source: Project list from STH Group 1/2024, company websites
8
Source: Federation of Real Estate Agency
Well-balanced portfolio of unsold completed apartments in Finland is an asset for the company
Unsold completed apartments in Finland by region
609 • Total of 1,000 unsold completed apartments in Finland distributed across 58 projects
- Average sales rate in completed projects over 63%
94 | ||||
99 | 157 | |||
41 | ||||
Helsinki | Tampere | Turku | Northern | Eastern |
Metropolitan | Finland | Finland | ||
Area |
Size distribution of the unsold completed apartments in Finland
>100m² | 3% | |
60-100m² | ||
41% | ||
40-60m² | 25% | |
<40m² | 31% | |
Source: https://www.yit.fi/en/homes/apartments-for-sale, 31 March 2024
9
Housing Baltic and CEE countries: Strong performance continued
Capital employed, EUR million | Order book, EUR million |
416 | 408 | 400 | 466 | ||||||
419 | 425 | 436 | |||||||
364 | 362 | 385 | |||||||
377 | 359 | 188 | 251 | 214 | 240 | ||||
223 | |||||||||
165 | 205 | 231 | 215 | 211 | 162 | 197 | |||
107 | |||||||||
Q1/23 | Q2/23 | Q3/23 | Q4/23 | Q1/24 | Q1/23 | Q2/23 | Q3/23 | Q4/23 | Q1/24 |
Unsold completed apartments, housing units | Order book, sold | Order book, unsold | ||
Quarterly adjusted operating profit,
EUR million
30 | ||||
9 | Target | |||
>10% | ||||
0 | 3 | 2 | ||
Q1/23 | Q2/23 | Q3/23 | Q4/23 | Q1/24 |
Adj. OPM (%), rolling 12 months
Capital released by over EUR 50 million during the last 12 months.
Strong order book supported by a healthy number of start-ups.
Adjusted operating profit margin for the last 12 months above the target level.
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YIT Oyj published this content on 30 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2024 06:09:04 UTC.
