Skanska : Write downs in U.S. and UK operations in second quarter 2017
July 20, 2017 at 01:38 am EDT
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7/14/2017 8:00 AM CET
Press release
The operating income in second quarter 2017 for Skanska Group is about SEK 1.5 billion (1.7) including write downs of SEK 780M in U.S. and UK in total.
Skanska makes project write downs of SEK 420M in the U.S. civil operations and of SEK 360M in the UK operations in the second quarter 2017.
After the write downs the operating income in the second quarter 2017 for the Skanska Group is expected to be about SEK 1.5 billion (1.7) and for the first six months 2017 about SEK 3.3 billion (3.6). Operating income per business stream is expected as follows:
Apr-Jun
Apr-Jun
Jan-Jun
Jan-Jun
SEK billion
2017
2016
2017
2016
Operating income
Construction
0,1
0,9
0,5
1,3
Residential Development
0,7
0,4
1,1
0,7
Commercial Property Development
1,0
0,5
1,3
1,8
Infrastructure Development
0,0
0,1
0,9
0,2
Central and eliminations
-0,3
-0,2
-0,5
-0,4
Total
1,5
1,7
3,3
3,6
In the U.S. civil operations the project write downs are mainly due to not achieving estimated production rates and projects being delayed.
The earlier communicated ongoing negotiations with clients regarding design changes in certain projects are progressing and have no financial impact in the second quarter.
To reduce organizational costs and restore profitability the U.S. civil operations will focus on its core geographies and product lines going forward.
In the UK operations the project write downs are mainly due to not achieving estimated production rates, projects being delayed with estimated penalties and multiple changes driven by clients causing cost overruns.
A telephone conference will be held at 9:00 am (CET), today Friday July 14. During the conference call, Skanska's President and CEO Johan Karlström and CFO Peter Wallin will describe the situation and respond to questions.
To participate in the telephone conference, with the possibility to ask questions, please dial +46 8 505 564 74, or +44 203 364 5374, or +1 855 753 2230.
Skanska's full and final Six Month Report will be presented on July 20, 2017.
Skanska AB published this content on 14 July 2017 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 20 July 2017 05:38:04 UTC.
Original documenthttp://group.skanska.com/media/207280/Write-downs-in-U.S.-and-UK-operations-in-second-quarter-2017
Public permalinkhttp://www.publicnow.com/view/BF55FC5DF11FC6A0B1DC1DC76E7227BBE9BE7606
Skanska AB is one of the world's leading building and public works group. Net sales break down by activity as follows:
- construction of buildings and infrastructures (94.3%): housing, schools, hospitals, offices, businesses, industrial sites, stadiums, jails, bridges, etc.;
- real estate development (5.6%): residential properties (57.3% of net sales) and commercial properties (42.7%; offices, shopping centers and logistics platforms);
- other (0.1%).
Net sales are distributed geographically as follows: Sweden (19%), the United States (48%), the United Kingdom (11.9%), Norway (11.6%) and other (9.5%).
SKANSKA AB 
