October 19, 2018 / 8:33 AM / a month ago

UPDATE 1-Skanska books more writedowns in U.S., sending profit, shares lower

(Adds CEO, shares, detail, background)

By Anna Ringstrom and Johannes Hellstrom

STOCKHOLM, Oct 19 (Reuters) - Shares in Swedish builder Skanska fell sharply on Friday after the company revealed a new writedown in its troubled U.S. operations which hit third-quarter earnings.

Skanska, whose single-biggest market is the United States where it is one of the major players, has made several writedowns in the past few years in the U.S. and in Poland, most recently in the second quarter.

The latest, announced late on Thursday, is a 900 million crown ($100 mln) writedown related to the construction phase of two public private partnership projects in the United States.

The writedowns reflect additional cost overruns due to low production rates and delays, Skanska said in a statement.

“One (project) has been problematic for quite some time. The other one has been under extensive review as a part of our strategic review of all major projects that we announced earlier this year,” CEO Anders Danielsson told analysts and media.

Skanska’s shares were down 7.5 pct at 0829 GMT, taking their fall year to date to 12.1 pct

Danielsson, a Skanska veteran who became CEO in January, said the review was now essentially completed.

“Our review and the actions we have taken earlier this year to restore profitability within the construction stream has mainly been addressing the Polish operation and the U.S. operation,” he said. “For both of them the reviews are completed and action plans are in place that we are executing on.”

Skanska also announced a 400 million crown goodwill impairment charge related to its exit from the U.S. power industry which was flagged earlier.

The company said it had decided to sell its operations in the power sector and to stop bidding for large design-build PPP projects.

Danielsson has shaken up management and started a restructuring programme since he took over as CEO. On Friday, Skanska said it had replaced the head of its U.S. civil infrastructure business with another group veteran, Don Fusco.

Skanska also reported a drop in third-quarter operating profit to 597 million crowns from 1.47 billion a year-ago even though sales growth was 9 percent.

The company, whose past projects include the Oresund bridge between Sweden and Denmark to the Metlife Stadium in the United States, is due to publish its full quarterly earnings report on Nov. 8.

$1 = 9.0210 Swedish crowns Reporting by Anna Ringstrom and Johannes Hellstrom. Editing by Jane Merriman

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