Lehto Group Plc
Inside information
30 January 2023 at 2.30 p.m. (EET)
Lehto’s 2022 operating result will be lower than expected earlier. There are four main factors behind the change:
- Lehto has improved the liquidity and cash flow by selling certain apartments and apartment projects with significant discounts. This causes losses on Profit & Loss Statement but they improve the cash flow. These apartment sales significantly reduce the number of unsold apartments.
- Certain asset sales planned for year 2022 have delayed for year 2023.
- Sales credit losses and other one-off items have been more than expected earlier.
- Costs on certain business premises and wooden apartment house projects have increased.
According to the preliminary unaudited accounts Lehto’s 2022 net sales from continuing operations were approximately EUR 345 million (EUR 404 million in 2021) and the operating result from continuing operations was EUR -42 million (EUR -28 million in 2021).
The main factors behind the weakened net sales are the decline in business premises volumes and small number of new apartment project starts in 2022. The loss-making business premises and wooden apartment projects, year-end apartment price discounts, one-off costs arising from exiting the project contracts, and credit losses weakened the operating result. Margins on concrete apartment projects remained on moderate level.
The ongoing apartment projects at the end of year 2022 are done for institutional investors that generate constant cash flow without the sales risk. The becoming cash flows are also improved by the assets sales and payment posts placed at the final phase of the projects.
The previous outlook for 2022 was:
Lehto estimates that net sales in 2022 will be over 10% lower than in the previous year (EUR 404.1 million in 2021) and that the operating result will be over EUR 27 million negative.
The main factors behind the declined outlook were delays in the sale of the balance sheet assets and their lower sales prices, and the general weakening of the market.
Furher information:
Juuso Hietanen, CEO, tel. +358 50 343 4023
Veli-Pekka Paloranta, CFO, tel. +358 400 944 074