Skanska profits despite challenging economy

Swedish construction concern Skanska reported a better-than-expected third quarter profit, with the company's CEO adding that it has fared well despite challenging economic circumstances.

Skanska profits despite challenging economy

Income after financial items rose to 1.66 billion kronor ($251.39 million) in the third quarter from 1.49 billion kronor in 2009. The result topped the Reuters analyst poll, which had expected 1.52 billion kronor.

“In the third quarter, we showed a continued improvement in earnings, with good divestment gains from our commercial development businesses and strong margins in several of our construction business units,” CEO Johan Karlström said in a statement on Thursday.

However, revenue dipped to 32.65 billion kronor from 35.57 billion kronor last year.

“Revenue remains at lower levels than last year, both in Swedish kronor and in local currencies. We estimate that revenue in local currencies during 2010 will be about 10 percent lower than in 2009. Order bookings were, however, higher than revenue during the latest 12 months,” he added.

Karlström painted a mixed picture for the coming quarter, in which some portions of its operations, such as the Swedish construction and residential development units, will demonstrate clear expansion, while other areas, such as the UK construction market, will show a certain downturn.

“There is uncertainty regarding future developments in the US market, but Skanska’s order backlog there is strong,” said Karlström.

Adjusted for currency rate effects, order bookings for construction grew by 12 percent from January to September. The order backlog amounted to 147.9 billion kronor at the end of the third quarter compared with 131.8 billion kronor last year, currently equivalent to 17 months of production, compared with 12 months in 2009.

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Swedish firm wins huge New York airport bid

A consortium led by Swedish construction company Skanska has been picked for a $3.6 billion (30.5 billion kronor) project to modernize New York's LaGuardia Airport, regional transport officials have announced.

Swedish firm wins huge New York airport bid
Travellers at New York's LaGuardia Airport in January 2015. Photo: TT

The contract is the largest in Skanska's history and follows the group also winning the contract to build the Metlife Stadium, where the American football teams New York Jets and New York Giants play.

The Skanska team, called LaGuardia Gateway Partners, was tapped by the Port Authority of New York and New Jersey to demolish the existing central LaGuardia terminal and build and maintain a replacement.

They beat out a competing bid by a team that included major rivals Aeroports de Paris, Goldman Sachs and the architecture firm Kohn Pedersen Fox.

Other members of the consortium are Walsh Construction, Vantage Airport Group, which manages nine airports around the world, Meridiam, Parsons Brinckerhoff, and HOK, the global architecture group.

Located in the borough of Queens, LaGuardia is one of three major airports serving the New York City region. Port Authority officials described the upgrade as necessary for New York to compete effectively with Tokyo and other global centers.

They said partners in the Skanska consortium have worked on more than 350 aviation and transport projects, including the John F. Kennedy Airport in New York and at international airports in Boston and Los Angeles.

Transport officials said the upgraded airport would replace a facility that currently suffers from overcrowding. Construction is scheduled to begin in the first quarter of 2016.

Several airlines fly between Sweden and New York, with budget carrier Norwegian launching a no-frills service in 2013.