Skanska sales up, profits remain elusive

Swedish construction and civil engineering giant Skanska on Thursday posted an increase in sales in the fourth quarter 2011, the first rise since the outbreak of the financial crisis, but full-year profits remained firmly in the red.

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For the October to December period, Skanska saw its sales inch up one percent to 34.54 billion kronor ($5.33 billion), as its net profit swelled 47 percent to 1.26 billion kronor, it said in its earnings report.

The result beat the expectations of analysts polled by Dow Jones Newswires, who had predicted a net profit for the quarter of 883 million kronor.

"This was the first time since the recession we had a positive revenue trend in local currencies compared to the corresponding quarter of the preceding year," Skanska chief executive Johan Karlström said in a statement.

"The market for building construction is gradually improving, where the Nordic markets in particular, especially Sweden, are showing a stable trend," the company said, adding however that the British and Czech markets were hard-hit by austerity measures.

Margins were meanwhile "tight" in the United States, while competition in the Polish market was "fierce," the Swedish group said.

For all of 2010, Skanska's results were weakened by the overall economic situation and a stronger Swedish krona.

It saw its sales drop 12 percent (or nine percent not counting the impact of the exchange rate) to 122.2 billion kronor, while its net profit for the year was down five percent at 4.02 billion.

On the bright side, orders grew during 2010 by two percent (or six percent not counting the exchange rate effect) to 131.4 billion.

Skanska said that in addition to an annual dividend of 5.75 kronor per share, it planned to pay out an additional dividend of 6.25 kronor when it manages to complete the sale announced late last year of its 50-percent stake in Autopista Central in Chile, expected to bring in around five billion kronor, corresponding to 12 kronor per share.

Following the news, Skanska saw its stock price fall 2.44 percent to 128 in late morning trading on a Stockholm stock exchange down 0.93 percent.