Construction drives profitability for Skanska

Higher profitability in construction and residential development operations drove operating income up for Skanska for the first half of 2013.

Operating income for the Swedish-based contractor achieved SEK2 billion (€230 million) for the period January 1 to June 31, 2013, up on SEK1.4 billion (€160 million) in 2012. Revenue also rose, up 4% to SEK62.7 billion (€7.3 billion).

Skanska’s president and CEO, Johan Karlström, said, “The result in the construction operation increased during the first six months of the year, mainly as a result of a strong growth in the US operations and the improved profitability in the Norwegian and Finnish construction operations.”

He added, “Profitability in the residential development operation continued to develop positively, due both to the effects of the restructuring and cost saving measures implemented, as well as a favourable market, particularly in Sweden."

He said he expected, however, lower sales volumes in the second half of the year as a result of fewer available projects to start.

Order bookings in construction operations totalled SEK 60.3 billion (€7 billion), while the company’s order backlog stood at SEK148.7 billion (€17.2 billion) – down from SEK161.1 billion (€18.7 billion) at the same time in 2012.

The signing of two major bridge projects and a very large research and development facility in the US, as well as a significant rail contract in Norway, boosted order bookings.