{"id":16623,"date":"2023-05-06T04:32:54","date_gmt":"2023-05-06T11:32:54","guid":{"rendered":"https:\/\/essential.construction\/news\/skanska-profits-tank-on-weak-residential-performance\/"},"modified":"2023-05-06T04:32:55","modified_gmt":"2023-05-06T11:32:55","slug":"skanska-profits-tank-on-weak-residential-performance","status":"publish","type":"post","link":"https:\/\/essential.construction\/news\/skanska-profits-tank-on-weak-residential-performance\/","title":{"rendered":"Skanska profits tank on weak residential performance"},"content":{"rendered":"<p> [ad_1]<br \/>\n<\/p>\n<div>\n<h3 class=\"standard-heading\"><span><span><span><span><span><span>Dive Brief:<\/span><\/span><\/span><\/span><\/span><\/span><\/h3>\n<ul>\n<li><span><span><span><span><span><span>Swedish <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/group.skanska.com\/498fec\/siteassets\/investors\/reports-publications\/interim-reports\/2023\/q1-2023\/skanska-q1-2023-en.pdf\" target=\"_blank\"><span><span><span><span><span><span><span><span>builder and developer Skanska reported<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> 434 million Swedish Krona ($42.4 million) in profit for the first quarter of 2023, an 86% decrease from the <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/skanska-profits-drop-us-backlog-and-optimism-remain-high\/642047\/#:~:text=For%20the%20full%20year%2C%20construction,optimism%20for%20CEO%20Anders%20Danielsson.\" target=\"_blank\"><span><span><span><span><span><span><span><span>previous three-month period<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and a 71% decrease from the same period in 2022.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Construction revenue was a better metric for Skanska. It reported 37.5 billion SEK in revenue for its construction arm, which CFO Magnus Persson said makes up roughly 80% of its business. That revenue was up 12% from a year ago, but down 12% from Q4 2022.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<li><span><span><span><span><span><span>Persson pegged the company\u2019s performance to a weak residential development market in the Nordics \u2014 Denmark, Sweden, Finland, Iceland and Norway \u2014\u00a0while reiterating confidence in its commercial and civil construction sectors, especially in the U.S.<\/span><\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<h3 class=\"standard-heading\"><span><span><span><span><span><span>Dive Insight:\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/h3>\n<p><span><span><span><span><span><span>According to Persson, an economic downturn in the Nordic region has made it a challenge for many would-be home buyers to secure mortgages, especially for low-income individuals, a key part of Skanska\u2019s clientele.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>&#8220;The market of this specific segment of the residential market has more or less disappeared almost during the quarter,\u201d Persson said. \u201cBecause of that, when we don&#8217;t have the income, we eat the fixed costs, essentially.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Despite the drop in profits, Persson said he isn\u2019t concerned about the long-term effects of the downturn and said the contractor can weather the storm.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cWe are not in a position where we will have to put assets to the market in order to preempt a liquidity situation or anything like that,\u201d he said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<h3 class=\"standard-heading\">Civil outlook<\/h3>\n<p><span><span><span><span><span><span>Skanska\u2019s construction portfolio remains stocked: Order backlog for Q1 was 217.9 billion SEK, down about 12 billion SEK from the previous quarter. That amounts to roughly 16 months of work, the contractor reported.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>The company\u2019s confidence in U.S. work continues to be high, largely spurred by infrastructure projects.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>\u201cI think you have an economy that&#8217;s been surprisingly resilient to interest rate increases, to inflation, et cetera,\u201d Persson told Construction Dive. The Infrastructure Investment and Jobs Act has buoyed that confidence, Persson said.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n<p><span><span><span><span><span><span>Skanska has recently announced wins in the infrastructure sector, including two highway interchange projects in California worth <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/skanska-wins-267m-california-state-route-57-60-rebuild\/648951\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>$267 million<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a><span><span><span><span><span><span> and <\/span><\/span><\/span><\/span><\/span><\/span><a rel=\"nofollow noopener\" href=\"https:\/\/www.constructiondive.com\/news\/skanska-wins-million-california-highway-construction-interchange\/646741\/\" target=\"_blank\"><span><span><span><span><span><span><span><span>$120 million<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/a>.<\/p>\n<\/p><\/div>\n<p>[ad_2]<br \/>\n<br \/><a href=\"https:\/\/www.constructiondive.com\/news\/skanska-profits-tank-weak-residential-performance\/649497\/\" rel=\"nofollow noopener\" target=\"_blank\">This article was originally posted at Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>[ad_1] Dive Brief: Swedish builder and developer Skanska reported 434 million Swedish Krona ($42.4 million) in profit for the first &#8230; <a title=\"Skanska profits tank on weak residential performance\" class=\"read-more\" href=\"https:\/\/essential.construction\/news\/skanska-profits-tank-on-weak-residential-performance\/\" aria-label=\"Read more about Skanska profits tank on weak residential performance\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[457],"tags":[],"class_list":["post-16623","post","type-post","status-publish","format-standard","hentry","category-construction-dive","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/16623","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/comments?post=16623"}],"version-history":[{"count":0,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/posts\/16623\/revisions"}],"wp:attachment":[{"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/media?parent=16623"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/categories?post=16623"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/essential.construction\/news\/wp-json\/wp\/v2\/tags?post=16623"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}