YIT restructuring as profits rise

Finnish services company YIT has begun demerger preparations as it moves forward with plans to separate its Construction Services and Building Systems into separate business groups.

Henrik Ehrnrooth, chairman of the board of directors of YIT Corporation, said, “The growth strategies of the companies are different, and we believe that the separate companies offer more attractive investment opportunities than the current setup.”

The partial demerger of YIT Corporation signals the start of a new strategic phase for the Helsinki-headquartered firm.

Building Systems is to be renamed Caverion and trade as an independent company, listed on the Nasdaq OMX Helsinki. Shares of Caverion will be paid as demerger consideration to shareholders of YIT Corporation

Construction Services will continue to operate under YIT, with its business consisting of Construction Services Finland and International Construction Services.

Juhani Pitkäkoski, the current CEO of YIT, will oversee the transformation of Building Services into Caverion. YIT’s current deputy CEO Kari Kauniskangas will be responsible for the development of the independent Construction Services business.

The new strategic phase announcement coincided with YIT posting its fourth quarter and full year 2012 financial statement, which saw operating profit increase significantly in International Construction Services.

Operating profit for Construction Services for 2012 rose by 3% to achieve €248.8 million. This included a 14% increase from Construction Services Finland and a near doubling of operating profit from International Construction Services.

YIT also posted gains in order backlog, which increased 4% to total €3.9 billion.