Peab warns of profit write-downs
By Helen Wright11 July 2012
Scandinavian contractor Peab said it expected to record charges of SEK425 million (€50 million) during the second quarter relating to write downs on three major construction projects.
At SEK300 million (€35 million), the largest write-down relates to the Stockholmsarenan Tele2 Arena project, a new stadium Peab is constructing in Stockholm which the company said had proven to be more complex than expected.
President and CEO of Peab Jan Johansson said, "Stockholmsarenan is a challenging, very complex project. We have one more year of production and we maintain a continuous dialogue with our customer and subcontractors on how the project is developing. All focus is on completing the project in time with a high level of quality."
In addition, Peab said that two commercial projects in central Oslo, Norway, which are nearing completion, would not be as profitable as previously expected. It said the write-down on both projects would total SEK125 million (€15 million).
The announcement of the write-downs came ahead of the company's half-year results, which will be published in August.