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Swedish construction and development company Skanska reported third-quarter earnings that fell below analyst expectations, with operating income of SEK 1.4 billion (around USD 149 million) compared with the anticipated SEK 1.99 billion. The company recorded impairments of SEK 658 million on certain U.S. commercial properties, accounting for 3.4% of its U.S. portfolio. Residential demand in Sweden remains weak, while the Nordic and European construction markets are stable. Shares dropped 4.5% after the results, reflecting investor concerns over property write-downs and declining order intake in its largest construction division.
Swedish construction and property developer Skanska reported third-quarter earnings that fell short of market expectations, causing its shares to drop 4.5% in early trading. Operating income rose to SEK 1.4 billion (around USD 149 million), slightly higher than last year's SEK 1.3 billion but below the SEK 1.99 billion forecast by analysts. The share decline reflects concerns over U.S. property impairments and softer order intake in the construction division. Advertisement
CEO Anders Danielsson noted that the group's capital turnover was affected by low activity in real estate transactions. He added that the company has, over the past few years, taken steps to adjust the business size and remain selective with project starts to ensure long-term stability.
The company emphasized that while the construction market outlook is generally stable, conditions vary between regions. Residential development in Sweden continues to face weak sales and profitability, while other Nordic countries show relatively steadier activity.
Skanska wrote down SEK 658 million (around USD 70 million) on select U.S. commercial properties, representing roughly 3.4% of its American commercial property development portfolio. The impairment resulted in a loss for the U.S. property segment in the quarter. Analysts at Jefferies said that although the write-downs affected results, strong construction margins of 4.2%, improving Nordic and European commercial property trends, and net profits in line with expectations provided some offset.
Danielsson commented that the impact of the U.S. impairments was not significant and that the company remains focused on maintaining balanced project portfolios. He said the situation does not create any major concern for Skanska's overall operations.
Order intake in the company's largest construction division fell to SEK 39.9 billion from SEK 50.8 billion last year, reflecting continued challenges in the construction market in certain regions. Despite this, the company continues to prioritize selective project launches and maintaining operational efficiency across markets.
Source Reuters
5th Jun, 2025
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