Reuters logo
UPDATE 1-U.S. project writedowns dent builder Skanska's Q3 profit
October 27, 2017 / 7:23 AM / a month ago

UPDATE 1-U.S. project writedowns dent builder Skanska's Q3 profit

(Adds detail)

STOCKHOLM, Oct 27 (Reuters) - Builder Skanska posted on Friday smaller quarterly profit growth than expected as writedowns in U.S. projects weighed again, while order intake shrank more than expected.

* Q3 EBIT up 16 pct yr/yr to 1.47 bln SEK ($175.6 mln) vs. Reuters poll mean forecast 1.55 bln

* Skanska said its U.S. Construction business booked two project writedowns totalling 220 mln SEK, hitting profitability

* Shares down 6.7 pct 0719 GMT

* CEO Johan Karlstrom told Reuters its USA Civil business accounts for one of the writedowns, and USA Building the other. One is in a project where Skanska has previously made writedowns

* The writedowns relate to higher costs, productivity issues and design issues, he said

* Operating margin at the Construction unit, which books the bulk of group sales, was 2.4 pct, down from a year-ago but up from Q2 when writedowns in its U.S. civil operations and on British projects weighed

* Skanska said that, in Britain, operations stabilised in Q3

* “All in all, we can clearly not be satisfied with the performance in Europe and the U.S. and our efforts to strengthen risk management and training continues,” Karlstrom said

* The Nordic region’s biggest builder, and one of the largest in the United States, is seeking to grow its share of profits from higher-margin commercial, residential and infrastructure development

* Karlstrom to Reuters: “Main focus going forward is to turn around the negative profitability in the U.S. and Polish operations, and to continue to grow the development businesses”

* Q3 order intake at the Construction unit shrank to 34.1 bln SEK from a year-ago 46.4 bln vs. consensus 37.0 bln amid Skanska’s focus on improving profitability

* Skanska said its 12-months overall construction market outlook remained positive, albeit lowering the outlook for non-residential building in Britain and for residential and civil building in the Czech Republic

* At Thursday’s market close, shares were down 14 pct YTD ($1 = 8.3730 Swedish crowns) (Reporting By Anna Ringstrom, editing by Terje Solsvik)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below