Yit Oyj Q3 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : It's Anssi from SEB. I have essentially 3 themes, and I will take them one by one. First of all, starting with the Housing business. When we look at the Q3 result, was it better than you expected, meaning that the completions that timed for Q3 were those higher than you originally assumed? And on underlying profitability, was the performance better? What should we think about the kind of relative strong figures on a seasonally very, very low quarter?

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : Okay. And when we look at the mix and when we look at the kind of the pricing assumptions going forward, should we expect a good performance also continue? Or is there something kind of one-off type of element in the Q3 result in, especially in Housing Finland and CEE?

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : Okay. Then on Infra, you highlighted there were project margin reductions. Could you elaborate a little bit more on how much it impacted Q3 result? Are we talking about a couple of millions or are we talking about EUR 10 million? Or kind of what's the roughly the magnitude of the impact?

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : Okay. Then on construction inflation, I appreciate that you kind of indicated there will not be any larger impacts in 2021. But what should we think about 2022? I understand that there is an expectation of perhaps the inflation level involved. But if we would assume that the inflation of prices, costs remain at the current level, kind of what is the magnitude of the impact for your result. Are we talking about single millions or are we talking about double-digit figures? Any thing -- any indication would be very, very helpful, I think, for all of us.

Question: Simen Mortensen - DNB Markets, Research Division - Analyst : I had 2 of the same questions actually, but I have a few other ones as well. When I look into Housing -- the Housing data in Finland, I see the plot reserves Q-on-Q have fallen 18% in terms of number of square meters in the plots reserves in terms of the lease, could you please elaborate a bit on that? Is that a -- it was a huge deviation Q-on-Q. I just wondered what it was.

Question: Simen Mortensen - DNB Markets, Research Division - Analyst : Okay. Just because -- another thing is building cost inflation. We have seen this in on timber, we have seen this in steel, in concrete in the rest of the Nordics. We have seen issues also there in Sweden, you have, I don't know, 0.5 million with cement, which is loss of operating license in Sweden. There's the risk of rationing cement in Norway, Norcem has stated price increases of 25% to 30% for cement from 2022. How are you seeing cement prices developing in the markets you're active in? Because what we see in the rest of the Nordics is that the price of cement is significantly escalating as well. Inflation of those haven't been that much yet in the markets, but what are you seeing? Is that also a risk? And how do you the risk and supply on cement going forward?

Question: Simen Mortensen - DNB Markets, Research Division - Analyst : Just in terms of the cost inflation we have seen so far, just to try to -- we talk about start to separate when you do construction for a third party and in terms of when you do your own developments, in housing, for instance. How much, for instance, do you expect price per square meter to go REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 29, 2021 / 7:00AM, YIT.HE - Q3 2021 Yit Oyj Earnings Call up based on the building inflation we have seen so far for producing housing units, for instance, in Finland? And how will that eventually impact profitability in future margins for development in Finland, as you can say? So please, first, the effect of the rising cost in price or cost per square meter of doing residential development? And how do you see that one impacting your margins eventually in housing, or potential?

Question: Simen Mortensen - DNB Markets, Research Division - Analyst : Yes. But you don't want to say how much, though this inflation we have seen so far will remain in terms of building costs.

Question: Simen Mortensen - DNB Markets, Research Division - Analyst : And in terms of the CMD, are you willing to give us a bit of a highlight what you're revising as the financial targets, geographies, segments? Or could you give us something to go on. Just wondering if you have any small ideas of what you give us a small of what you're planning to say?

Question: Olli Koponen - Inderes Oyj - Analyst : It's Olli Koponen from Inderes. I have a few questions left. First on the Housing Russia. There were 0 housing starts in the quarter. Is there any kind of specific reason for this? Or was this just kind of a normal fluctuations in the starts?

Question: Olli Koponen - Inderes Oyj - Analyst : Is there any kind of area where you see more risk than other area?

Question: Olli Koponen - Inderes Oyj - Analyst : Okay. Fair enough. And one more question, just to clarify on the Infra segment. In the start of this year, you informed about the sale of the wind park in LestijSrvi. You said that it would close -- the deal would close during 2022. Any new inflow on that when the deal is going to close?

Question: Svante Krokfors - Nordea Markets, Research Division - Analyst : Svante from Nordea. I have 1 question left regarding you explicitly mentioned in the Q4 market outlook slide that the real estate market, investor market is picking up in Finland. Should we have a positive read for your large co-ownership projects development on that comment? This -- is the investor interest increasing also from your perspective on future projects or are investors still on the sidelines?

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : It's Anssi once again. I have a follow-up on Olli's question on Russia and your answer. I mean, your comment was that you're aiming to take the risk a little bit down, but kind of starting 0 apartments, its more than a little. Is there something happening in the market that perhaps you see that there's a real potential risk of something happening. So kind of is there a real reason behind this move? Or kind of how should we read the situation?

Question: Anssi Kiviniemi - SEB, Research Division - Analyst : Okay. And has the Russian ruble move any way affected the decision? And a follow-up question on that. Has the Russian ruble move impacted the market in Russia in any way?