Wednesday, 11 June 2008

Uponor, YIT: Symptom of the Coming Crash

"Building construction activity in Uponor's main markets, especially in Spain and the USA but also in the Nordic countries, has not reached expected levels, and the estimates of the full-year development of these markets have been significantly reduced, to a level that is clearly below what was the basis for Uponor's full-year guidance statement in April.

As a result, Uponor has intensified actions to adjust production capacities serving these markets to match current demand. These actions include reductions in personnel as well as temporary production shutdowns.

Due to the weaker market development, Uponor issues a new guidance for 2008 for its continuing operations, which exlude the net sales and operating profits of the UK/Irish infrastructure business: The company's continuing operations' net sales is not expected to quite reach last year's level and the operating profit
is estimated to fall short of the 2007 level.

UPONOR, UPoNOR (UpNorth?) should rename itself into DownoSo (DownSouth) or simply dinosaur, as the time for construction market is the most painful that one has witness since the disapearance of the last big pets : the Dinosaur.

Another big beast, is YIT which has been clearly rescued by the state and somehow by Bank of Finland (selling at a very competitive price some land, see previous article). The state, since it ramped up its spending on infrastructure , allocating big tax payer money to company such as YIT to maintain their balance sheet afloat. After all, its legitimate since lots of jobs are at stake as well as the economical stability.

So it's the end of the reign of the Crane...

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