Skanska feels the cold with losses in US and Europe
Image: Skanska built the Hallandsås rail tunnel, Sweden’s longest, with Vinci, finishing in 2014 (Skanska)
Swedish international group Skanska has revealed a “disappointing” past year for its construction business, with substantial losses in the US and Europe.
It also expressed pessimism for the UK, saying “the uncertainty related to Brexit is limiting investments in the non-residential building market”.
In its 2018 year-end report, Skanska recorded a $70.8m (£55.1) loss for its US construction business, and a $45.4m (£35.3m) loss for its European construction business, which includes the UK.
“For Construction, 2018 was a disappointing year,” chief executive CEO Anders Danielsson wrote in the report’s preface.
“Weak performance on two projects in the USA and a major restructuring in Poland overshadowed good performance in other operations, specifically Sweden and Finland.”
But he said the group’s strategy to “improve performance and reduce risk” was working, with fourth quarter operating margin in construction reaching 2%.
A year ago Skanska announced plans to lay off 3,000 staff and restructure its business after a profit warning.
Results for Europe improved on 2017, when losses amounted to $112.2m (£87.3m). In Europe, Skanska is active mostly in the central and eastern regions.
Losses grew steeply in the US, however; in 2017 the company lost just $5.7m (£4.4m).
At home in the Nordic countries, which Skanska records separately from Europe, its performance remained strong, with a construction profit of just under $235m (£182.9m), down slightly on 2017.
Following on from the results Skanska’s board proposed a smaller than expected dividend per share, of 6 krona (£0.50).