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Skanska posts profits fall

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09:23 CEST+02:00
Swedish construction firm Skanska has reported a pre-tax profit of 451 million kronor for the first quarter of 2011, less than half the 936 million kronor posted in the corresponding period of 2010. 

Analysts had on average expected a profit of 678 million kronor, according to a Reuters poll. 

Turnover was 24.8 billion kronor, compared with 25.8 million kronor a year earlier. New orders within construction came in at 21.6 billion kronor, compared to 25.6 billion kronor in the first quarter of 2010. 

Analysts had expected sales of 25.1 billion kronor and an order intake of 27.2 billion kronor, according to the Reuters poll.

 

"Orders in the first quarter were affected by that Sweden has an unusually long order backlog and high utilization rates and therefore we have been restrictive in the new projects that we bid for," said Skanska CEO Johan Karlström in the interim report. 

The firm reported a decline within public construction investments in the UK, the Czech Republic and parts of the US housing construction market will contribute negatively, according to Karlström. 

"We have a backlog equal to 15 months of construction and look well placed to win new projects during the remainder of 2011," he said.

Construction activity is heading in the right direction but the recovery is relatively slow, Karlström said. 

Developments in the housing sector is described as stable. Especially in Finland and the Czech Republic, sales have progressed well, Skanska's CEO said.

"During the fourth quarter of 2010, we launched many new housing projects, which reduced the short-term opportunities to start new projects during the first quarter of this year," said Karlström.

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