YIT profit fall suggests weak market debut for Caverion
HELSINKI (Reuters) - Surprisingly weak quarterly results from Finnish construction company YIT (YTY1V.HE) raised worries that its building services business will have a weak start on the Helsinki bourse when it lists in July.
YIT on Friday posted a 27 percent year-on-year fall in first-quarter operating profit including earnings from work in progress. Analysts in a Reuters poll had forecast a 9.6 percent increase to 57 million euros ($74 million).
Much of the first-quarter weakness was from the building services operations in northern and central Europe, which produced operating profit of only 5.6 million euros, against the 20 million euros expected by analysts.
The business has struggled as recession-hit customers cut back on maintenance spending, and the company announced in February that it would be spun off and renamed Caverion.
YIT shares fell 9 percent to 14.89 euros by 1240 GMT and analysts said Friday's figures were the last to be published before Caverion's listing, indicating a weak debut.
"Momentum is gone for this stock," said Pohjola Markets analyst Matias Rautionmaa.
The group, however, repeated its earlier guidance for the full year, expecting a rise in annual profit on the back of strong residential sales in Russia. The company is one of the biggest foreign constructors in Russia.
YIT investors are to receive one Caverion share for each YIT share owned, though the plan still requires backing from two thirds of shareholders at a meeting in June. ($1 = 0.7689 euros)
(Editing by Ritsuko Ando and David Goodman)