YIT published a Q1 report on Tuesday morning that was slightly weaker than our expectations, as adjusted operating profit fell short of our forecasts, still primarily due to the softer profitability of the Housing Finland segment. Revenue slightly exceeded our estimates, driven by contracting. Order backlogs for the contracting segments grew from year-end levels in line with our expectations. As expected, the company reiterated its guidance for the current year. Despite the Q1 earnings miss and the soft outlook for the Housing Finland segment, the strengthened contracting order backlog and EUR 7 million in cost savings support the results for the rest of the year.
Here is the company’s release on the results:
First quarter of 2026 in brief
Revenue rose to EUR 399 million (391).
Adjusted operating profit decreased to EUR 12 million (14). The adjusted operating profit margin decreased to 2.9% (3.5).
Operating profit decreased to EUR -18 million (12). Operating profit was weakened by fair value changes related to non-strategic items, of which EUR -16 million related to Tripla Mall Ky and EUR -9 million to OP Vuokrakoti Ky, as well as the EUR -4 million cost impact of change negotiations.
Cash flow from operating activities after investments rose to EUR 19 million (-10).
Housing Finland segment’s adjusted operating profit decreased to EUR -3 million (-1). Consumer sales rose to 131 apartments (108), supported by a bulk sale of 79 apartments. New apartment starts for consumers fell to 64 apartments (83). The number of completed unsold apartments decreased to 415 apartments (31 Dec 2025: 524).
Housing CEE segment’s adjusted operating profit rose to EUR 13 million (11). During the quarter, 429 (580) apartments were sold and 290 (669) apartments were started. The number of completed unsold apartments increased to 258 apartments (31 Dec 2025: 236).
Construction segment’s order backlog rose to EUR 1,016 million (31 Dec 2025: 978). Adjusted operating profit rose to EUR 3 million (1).
Infrastructure segment’s order backlog rose to EUR 922 million (31 Dec 2025: 875). Adjusted operating profit decreased to EUR 2 million (3).
Result for the quarter was EUR -34 million (-4).
Net interest-bearing debt at the end of the period was EUR 588 million (689) and the gearing ratio was 83% (91). YIT redeemed the outstanding EUR 46 million hybrid bond issued in 2021 on 31 March 2026.
YIT’s combined accident frequency was 8.5 (10.0) in the first quarter of 2026.
YIT announced on 8 January 2026 that Mari Puoskari has been appointed as Head of the Housing Finland segment and a member of YIT’s Group Management Team. She will start in her position by 8 July 2026 at the latest.
YIT announced on 17 March 2026 that Erkka Repo has been appointed as CFO and a member of YIT’s Group Management Team. He will start in his position by September 2026 at the latest.
And here is the company report from Atte following Q1
YIT’s Q1 result fell slightly short of our forecast regarding adjusted operating profit. However, in our view, the strengthened order backlog of the contracting segments, the improved sales rate of apartments under construction in Housing CEE, and strong volume support this year’s revenue and result. In addition to the current year, we forecast earnings growth for YIT for the coming years as well. The turnaround in Housing Finland will start to show in our forecasts from next year onwards, as volume recovers gradually and efficiency measures take full effect. Following moderate forecast changes, we lower our target price to EUR 2.8 (prev. EUR 3.0) but upgrade our recommendation to Accumulate (prev. Reduce).
Excerpt from the report:
Looking ahead in valuation
We have bracketed YIT’s acceptable valuation at a level of 10–12x EV/EBIT and 10–13x P/E. The valuation levels we accept for YIT are in line with the sector’s historical forward-looking valuation levels. YIT’s valuation is high based on 2025 realized earnings and our current year forecasts, but in our view, the current earnings performance does not reflect the company’s potential, as e.g., the Housing Finland segment’s result is still clearly negative. We are therefore looking ahead in valuation, as the earnings level normalizes in our forecasts in the coming years. In addition, we evaluate the company’s value through the sum-of-the-parts method, which takes into account the differing natures of the company’s operating segments as well as items not belonging to the company’s current strategy.
YIT and the Lappeenranta Student Housing Foundation (LOAS) have agreed on the construction of student housing with long-term interest subsidies as a turnkey contract (KVR) in Kesämäki, Lappeenranta. The project includes the construction of three five-story apartment buildings and courtyard areas. The value of the contract for YIT is approximately EUR 20 million.
Construction is estimated to begin in June 2026, once the project has received a building permit, and the project is expected to be completed in July 2027.
The Lumo Kodit Oy property damaged in yesterday’s Kalasatama fire was most likely a project contracted by Lemminkäinen, so it will likely provide work for YIT for at least the coming months, and potentially even longer.
^Is it clear that YIT specifically will be the one to repair those damages, considering this likely isn’t a matter of warranty repairs? Shouldn’t that restoration project be put out to tender regardless? Or is there a suspected construction defect that caused the fire to start?
At this stage, it is entirely premature to assess whether the rapid spread of the fire was due to a construction defect under YIT’s responsibility. In any case, investigations will be conducted, and YIT will certainly participate closely in these inquiries.
In the first instance, Lumo Kodit Oy’s insurance company will likely cover the costs arising from the repairs. Based on the completed investigations, the insurance company will then decide in due course whether to seek recourse for the compensation paid from a third party, such as the project’s contractor.
The fire in the Kalasatama apartment building spread from one fire compartment to another because there were gaps between the compartments or the compartments were poorly sealed. Smoke spread for the same reason.
YIT is involved in the implementation of the Helsinki Infrastructure Program Länsiratikat (Western Trams) project, where construction began at the end of May. The project is divided into three different segments, of which the currently ordered portion is valued at approximately EUR 12 million for YIT. The order will be recorded in YIT’s second-quarter order backlog. The remaining segments will be ordered during 2026 and 2027. The total value of the project for YIT is approximately EUR 62 million.
The order covers design and implementation. Of the total, the design portion accounts for approximately 10 percent and construction for approximately 90 percent. The construction portion is shared between YIT and NRC Group.
