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Skanska profits up as gloomy outlook remains

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07:36 CEST+02:00
Swedish construction firm Skanska reported significantly improved results on Thursday, exceeding consensus expectations for second quarter net profits.

Following the news, the share price of the Swedish construction and civil engineering conglomerate surged.

The company, however, remained gloomy about the outlook despite an increase in orders.

Net profits in the second quarter rose to 1.18 billion kronor ($155 million) from 1.08 billion kronor 12 months ago. Analysts had predicted an average of 983 million kronor in quarterly net profits, according to Reuters.

Orders totalled 37.6 billion kronor up from 34.2 billion the same period last year. Chief executive Johan Karlström said the performance in the quarter had been solid in terms of margins and orders, and the operating profit in the construction sector had risen by about 50 percent.

Operating profit rose to 1.33 billion kroner from 923 million kroner. Civil engineering orders in the United States had fallen because projects had been delayed by developers hoping for federal help.

Karlström expected a satisfactory recovery in North America during the second half of this year.

But "because of the economic crisis, we expect our sales to fall in some markets during 2009, particularly in the Nordic countries and in the Czech Republic," he said.

Sales for the quarter fell to 35.73 billion kronor from 37.05 billion kronor 12 months earlier.

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