Lehto Group Plc: Lehto withdraws its guidance on 2020 financial outlook
Lehto Group Plc
Insider information
7 April 2020 at 4.10 p.m. (EET)
Corona virus pandemic has created uncertainty in Lehto’s business environment and the visibility has weakened. So far Lehto’s projects have progressed nearly without interruptions but starts of some new projects are delaying because of decisions made by the customers. The company sees risks related to sales, project execution and availability of materials, subcontracting resources and labour resources. Realization of the risks would have effects on Lehto’s year 2020 net sales, profitability and financial position.
Due to the uncertain business environment, Lehto temporarily withdraws the guidance on 2020 financial outlook given on 20 February 2020. Lehto estimates that the new guidance could be given later this year.
Lehto is prepared for the uncertainty and has completed co-operation negotiations on layoffs on all personnel. As a result of the negotiations, company will lay off its personnel according to the separate plans to be made in the service areas. According to the preliminary estimates, layoffs will last until the end of the year. In addition to personnel related measures, Lehto is planning and executing other cost-saving measures.
Previous outlook published in financial statement bulletin on 20 February 2020 was:
Lehto estimates that the Group’s net sales in 2020 will be approximately 10% lower than in 2019 and that operating result is positive.
The net sales outlook is based on estimation of decelerating housing market and declining volume in Lehto’s school and care home business. Volumes in business premises are estimated to remain at the level of previous year.
The operating profit outlook is influenced by ending of loss-making complete renovation projects and other single loss-making projects as well as estimated positive effects of restructuring activities that were started in 2019 and are still being executed.
The main risks related to the development of net sales and operating profit are declining demand for apartments and delays in start of new business premises projects under negotiation.
Further information:
Veli-Pekka Paloranta, CFO, Lehto Group Plc, tel. +358 400 944 074
Lehto Group PLC:
Lehto is an innovator in the construction sector. We build housing, business premises, care homes and schools. In addition, we carry out pipeline renovations in apartment buildings. Our goal is to transform our industry – to build faster, at a more affordable price and with higher quality. Lehto’s approach to construction is in line with the megatrends in the sector: industrial prefabrication, digitalisation and ecology.