Friday, 31 October 2008

Interim Reports Round-up: YIT, SRV ...

It's always worth to read what the construction company have to say in their interim report.

I would like to highlight that the sharp deterioration occurred sometime in October with all its consequences might not be fully reflected in those reports. So it shows a bad deterioration of the residential and commercial market, no surprise. In fact, this will get only worse in the quarter to come.

You have to understand that the housing market situation in the U.S., U.K., Ireland, Spain etc.. are worse than the one they experienced in 1990, in fact we have to go back in the late 70's to see similar phenomenon.

That is to say, that we will see a slump that will be well worse of the 2002 correction and could go as near as the 1990 slump maybe not as bad, let's say half as bad...but this can change depending on data we will get in the months to come. As some say : "for the best or the worse"

I let you read...


"In Finland the outlook has been weakened by a sharp decline in demand for housing as well as the cancellation of some already agreed commercial property deals due to financial difficulties experienced by the buyers.

In infrastructure construction full-year earnings will be depressed by increased input costs and the poor market situation in the Baltic States


"In Finland, residential sales faced a downturn after the summer. In the Baltic countries construction has decreased considerably.

In Russia, tightening loan terms for companies made actors accelerate their residential sales; this stopped the increase in prices that had continued steadily for a long time. In the last few weeks, the residential sales in Russia have weakened considerably

We have taken measures to adjust our operations to the market outlook. We have decreased residential start-ups in Finland.

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.

In addition to strengthening operational cash flow, the Group's financial position is secured with pension insurance company loans, among other things. The objective is to ensure the Group's operational resources if the weak market situation becomes prolonged


"Finland's economy will decelerate, with growth expected to settle at around 2 per cent during the present year. The business cycles of the real estate market and construction have weakened significantly.
The housing market has taken a sharp turn for the worse due to high interest rates and slower economic growth. The number of unsold residences has grown.

The number of residential start-ups has decreased. In 2009, the construction of commercial premises and offices is expected to decline


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