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Swedish builder Skanska’s profits tumble, but less than expected

2024.02.09 04:39


© Reuters. Skanska logos are seen printed on metal beams undergirding the Sixth Street Viaduct alternative mission in Downtown Los Angeles, California, U.S., August 11, 2021. REUTERS/Bing Guan

STOCKHOLM (Reuters) -Skanska, the Nordic area’s greatest builder, on Friday reported a 73% fall in fourth-quarter working revenue as a result of property worth writedowns in weak actual property markets.

The drop was nevertheless smaller than feared and the Swedish group’s shares had been up 6% in morning commerce.

Skanska had already warned in January it could guide 2 billion crowns ($191 million) value of impairments within the quarter in addition to worth modifications throughout its property improvement operations as a result of weak markets, particularly in U.S. business actual property improvement.

“The fourth quarter brought a strong finish to a solid year for Construction, while Residential and Commercial Property Development remained impacted by weak property markets,” CEO Anders Danielsson stated.

“In Project Development, the growth strategy is on hold and our focus is on sales and leasing activities…preparing for returned market activity,” he stated in a press release.

Operating revenue on the group, which can be one of many greatest builders within the United States, was 957 million crowns ($91.4 million) towards a year-earlier 3.53 billion.

Analysts at Jefferies stated outcomes had been “solid”, with wider-than-expected revenue margins on the development division, and housing gross sales ticking up.

“Skanska is in a tough market, but with valuation near lifetime lows … and macro headwinds turning to tailwinds, we see a positive risk reward and re-iterate our ‘buy’ rating,” they stated.

Skanska stated coverage rate of interest cuts may stimulate Nordic residential markets within the coming 12 months, but it nonetheless expected demand to maintain falling.

It additionally predicted additional slowdowns in its business improvement markets.

Order consumption on the development division, which books most of group gross sales, fell to 44.1 billion crowns within the quarter, from 51.6 billion.

The group proposed a dividend for 2023 of 5.50 crowns per share, towards 7.50 crowns for 2022.

($1 = 10.4701 Swedish crowns)

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