YIT feels Russian residential dip

YIT has cut back on its residential construction work in Russia following a sharp and sudden weakening in the market. The Finnish company said that the tightening of mortgage conditions earlier in the year meant sales were pushed through quickly and prices rose. However, October has seen a significant slowdown.

"In Russia we made a decision after the review period to stop the construction of several residential projects whose sales have not yet begun. Plot acquisitions and other investments have been stopped, and cost structure is resolutely being modified," said president and CEO Hannu Leinonen.

Despite this, the company saw its sales for the first nine months of the year increase +8% to € 2,89 billion, although operating profits compared to the same period last year were down -7% to € 212 million.

YIT is forecasting a rise in revenues but a fall in profits for the full year, compared to 2007. However, it says the fall in the residential market in Russia, along with drops in Finland and other parts of the Baltic region make the last quarter of the year difficult to forecast.