Lemminkäinen withdraws from the Ilmatar residential construction project in Russia and records an approximately EUR 13 million write-down
LEMMINKÄINEN CORPORATION STOCK EXCHANGE RELEASE 15 SEPTEMBER 2015 AT 8.30 A.M.
LEMMINKÄINEN WITHDRAWS FROM THE ILMATAR RESIDENTIAL CONSTRUCTION PROJECT IN RUSSIA AND RECORDS AN APPROXIMATELY EUR 13 MILLION WRITE-DOWN
On 31 March 2015, Lemminkäinen announced that it will withdraw from its role as developer in the planned Ilmatar residential project with Lipsanen & Co. Group located on Vasily Island in St Petersburg city centre. The parties’ negotiations regarding alternative ways to carry out the project have been completed. The parties have agreed that Lemminkäinen withdraws entirely from the project and transfers all its project related rights to Setl Group, with whom Lipsanen & Co. has signed a project contract. After the agreement, Lemminkäinen has no obligations or risks related to the project.
As a consequence of the withdrawal, Lemminkäinen will record an approximately EUR 13 million write-down to its third quarter result in 2015. The write-down comprises of realised planning and other costs.
Lemminkäinen’s decision is impacted by the uncertainties in the operating environment and weakened economic situation in Russia as well as the risk level of the project for Lemminkäinen.
Lemminkäinen’s profit guidance for 2015 remains intact. Lemminkäinen estimates that its net sales in 2015 will not increase as compared to 2014 (EUR 2,044.5 million). Operating profit (IFRS) in 2015 is expected to improve as compared to 2014 (EUR 36.3 million).
Lemminkäinen has released stock exchange releases regarding the Ilmatar project on 10 February 2011 and 31 March 2015.
Casimir Lindholm, President and CEO
Tel. +358 2071 53304
Ilkka Salonen, CFO
Tel. +358 2071 53304
NASDAQ OMX Helsinki
Together with our customers we create conditions that make living, working and travelling functional, safe and healthy. We operate in Northern Europe and employ about 5,600 professionals. In 2014, our net sales were about EUR 2.0 billion. Lemminkäinen Corporation's share is quoted on NASDAQ OMX Nordic Exchange Helsinki. www.lemminkainen.com