Skanska reports stable quarterly profit, according to recovery in construction activity
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The logo of Swedish builder Skanska is seen at the Slussen construction site, with the Old Town in the background, in central Stockholm, Sweden on July 15, 2021. REUTERS / Anna Ringstrom
STOCKHOLM, October 28 (Reuters) – Sweden’s Skanska (SKAb.ST) reported stable operating profit for the third quarter, but said construction market activity gradually picked up as economies rebounded from the pandemic-induced recessions.
Skanska, the largest automaker in the Nordic region and one of the largest in the United States, said operating profit for the July-September quarter was 1.5 billion crowns (179 million kroner dollars), virtually unchanged from the previous year. He noted that while sales had slowed, profit margins had improved.
“The negative impact of the pandemic is still present in our markets but activity is picking up as uncertainty begins to diminish,” he said in his 12-month outlook.
CEO Anders Danielsson told Reuters that Skanska’s projects had been little delayed by bottlenecks in the global supply chain and that margins had not been too affected by rising steel prices. , wood products and other building materials.
To deal with land transport capacity shortages and in the case of Britain’s longer administrative processes due to Brexit, Skanska made purchases earlier and secured its own storage facilities to ensure that vital materials are close at hand, Danielsson said.
“We had to work harder to get the materials to construction sites on time. “
To minimize the blow of higher material prices, Skanska tries to bid on those costs before bidding on a project, he added.
Skanska derives about half of its profits from real estate development. While investor demand to purchase Skanska’s commercial properties held up, the leasing market stagnated due to declining office use.
Danielsson said the number of office visits to potential tenants increased significantly after the summer.
“Offices are calling their employees back to offices – this is very clear in the US and Britain. I have personal confidence that offices will continue to play an important role,†he said.
Skanska shares were down 1% by mid-morning.
($ 1 = 8.5867 Swedish kronor)
Reporting by Anna Ringstrom; Editing by Helena Soderpalm and Edwina Gibbs
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