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Skanska blames profit drop on eurozone

Published: 08 Nov 2012 11:25 GMT+01:00
Updated: 08 Nov 2012 11:25 GMT+01:00

Swedish builder Skanska posted on Thursday a 23-percent fall in third-quarter net profit as economic uncertainty in Europe weighed on results, but said demand in the US market was picking up.

In the July-September period, Skanska reported a net profit of 1.0 billion kronor ($149 million), compared with 1.28 billion kronor in the corresponding period last year. Analysts polled by Dow Jones Newswires had expected a net profit of 1.1 billion.

Revenue rose 4 percent to 33.3 billion kronor, slightly above expectations of 33.2 billion.

Activity in the first nine months of the year and the long-term order situation were "stable", chief executive Johan Karlström said. However, third-quarter orders had been weak, especially in Europe, he said.

"A growing number of signs indicate that also the Nordic economies are being increasingly impacted by the fall-off in global demand, mainly due to the situation in the eurozone," he said in a statement.

By contrast, an improvement in the US market was becoming increasingly clear, with many projects available for tender, he added.

In the Nordic region, the housing market had been affected by the economic situation in Europe, but Karlström said he saw "favourable" demand for residential property in the long term.

Shares in Skanska were down by 0.78 percent on the Stockholm stock exchange at at 9:51 on Thursday morning, in a market that was 0.47 percent higher.

AFP/The Local/og

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