Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Construction Unit Lifts YIT's Profits

HELSINKI -- Finnish builder YIT's April to June profits rose more than expected, boosted by strong housing demand and increasing business in Russia, sending its shares sharply higher.

YIT's operating profit in April to June rose to 78.5 million euros ($108 million) from 60 million euros in the same period a year ago, and compared with the average of 76 million euros expected by analysts in a poll.

"The outlook for 2007 is still favorable. Great need for housing in the large cities of Russia enables us to expand our residential production over the long term too," YIT chief executive Hannu Leinonen said in a statement.

April to June operating profit at YIT's construction unit, which generated 44 percent of group turnover in the quarter, rose to 51.5 million euros, beating all analysts' expectations in the poll, which ranged from 42 million euros to 49 million euros.

"The market outlook for the developer contracting of housing is estimated to remain solid on the whole in YIT's market areas," it said.

YIT, which is the largest foreign builder in fast-growing Russian markets, expects to start building 4,500 apartments there this year. It is aiming to start building 2,700 apartments in its home country Finland.

Operations in Russia generate still less than 10 percent of group's turnover.

"The outlook for revenue growth is supported by the strong order backlog, the continuing [economic] boom and YIT's major investments in the Russian market," the company said.

YIT's sales in the quarter rose to 939 million euros, beating the average estimate of 909 million euros in the poll, but they were within the range of estimates.

"YIT's net sales and EBIT were slightly better than anticipated. We shall maintain our [accumulate] recommendation and will raise our forecasts by a couple of percent," FIM Securities said in a research note.

YIT repeated that it sees 2007 sales and earnings before interest and taxes rising from last year.