Skanska takes write-down in Latin America

Swedish-based Skanska is taking a SEK500 million (€58.4 million) charge on its construction operations in Latin America in the fourth quarter of 2012.

The contractor announced the charge in mid-December, citing write-downs on one ongoing project and write-downs of claims in two completed projects with fixed price contracts. The company had also taken write-downs earlier this year on the same three projects.

According to the company, unexpected ground conditions and utility issues have led to substantially higher costs in the ongoing infrastructure project, which is now expected to be completed in the third quarter 2013.

With regard to the now completed projects with fixed price contracts, Skanska said that the project scope changed during the production period, which led to substantial increases in the cost to complete the projects on schedule.

After the charge, Skanska forecasts that its operating income for the total construction stream for the 2012 full year will range between SEK3.2 billion (€373.8 million) and SEK3.4 billion (€397.1 million).

The company will announce its completed fourth quarter 2012 and year-end financial report on 7 February.