YIT reorganises operations in Russia and recognises EUR 10.4 million of non-recurring costs
STOCK EXCHANGE RELEASE OCTOBER 16, 2015 AT 08:30 A.M.
YIT reorganises operations in Russia and recognises EUR 10.4 million of non-recurring costs
In line with the strategy, YIT is reducing its risk level in Russia by decreasing the production volume to match current demand. YIT will continue to operate in all current locations, but to increase flexibility and to ensure cost-efficiency and competitiveness, the operations are reorganised.
The division structure of YIT’s Russian operations will be revised. As of January 1, 2016, the divisions will be St. Petersburg, Moscow (City and region) and Russian regions (Kazan, Rostov-on-Don, Tyumen and Yekaterinburg). Part of the support functions will be centralised to serve all divisions. In addition, a separate YIT Service Russia business unit will be established to better exploit the opportunities in serving the over 20,000 customers. The business unit is responsible for the maintenance of the delivered YIT projects in all operating cities. All projects under construction will continue as planned, and the financial reporting will continue as is on the Housing Russia segment level.
In connection to the reorganisation, YIT targets to reduce fixed costs related to the Russian operations to match the decrease in sales and the production volume. The number of employees is estimated to decrease by a further approximately 200. The targeted annual cost savings from the measures announced now and in January 2015 are estimated to total around EUR 10 million. A EUR 2.7 million non-recurring cost will be recorded in the 2015 third quarter results related to the restructuring of the Russian operations.
In addition to the restructuring measures, YIT recognises a EUR 7.7 million impairment charge in the 2015 third quarter results related to development costs of projects in the Moscow region that YIT has decided not to implement.
As for new plot investments and apartment start-ups, the plan is to maintain a production volume that will enable profitable business and positive cash flow in all current operating cities. At the same time, the target is to maintain readiness to increase the production when the operating environment allows it.
YIT will publish financial information on the development of the Russian operations in its Interim Report on October 29, 2015.
For additional information, please contact:
Sanna Kaje, Vice President, Investor Relations and M&A, YIT Corporation, tel. +358 50 390 6750, sanna.kaje@yit.fi
Timo Lehtinen, CFO, YIT Corporation, tel. +358 45 670 0626, timo.lehtinen@yit.fi
YIT CORPORATION
Sanna Kaje
Vice President, Investor Relations and M&A
Distribution: NASDAQ OMX, principal media, www.yitgroup.com
YIT is a construction industry leader. We create better living environments in Finland, Russia, the Baltic countries, the Czech Republic, Slovakia and Poland. Over 100 years of experience have secured us a strong market position: we are the largest housing developer and one of the largest business premises and infrastructure developers in Finland, and the most significant foreign housing and area developer in Russia. Our vision is to stay one step ahead – while taking care of our customers, partners and personnel. We have nearly 6,000 employees in eight countries. In 2014, our revenue amounted to around EUR 1.8 billion. Our share is listed on NASDAQ OMX Helsinki. www.yitgroup.com