GDANSK: Swedish builder Skanska reported a rise in fourth-quarter profit on Friday and beat analysts’ expectations, citing a gradual recovery in residential and commercial property development and a record order backlog in construction.
That boosted its shares by over 6% and they were on track for their best day since October 2022.
The Nordic region’s biggest builder said its operating profit grew 189% on a currency adjusted basis to 2.75 billion Swedish crowns ($252.2 million) in the October-December quarter.
Analysts polled by LSEG had expected an operating profit of 2.44 billion crowns.
The builder did not book any impairments in the quarter, it said. It recorded 2 billion crowns worth of impairments and fair market value changes in its development and investment operations a year earlier.
“It is promising to see that market recovery is underway for our project development businesses,” CEO Anders Danielsson said.
Following a period of market weakness after the pandemic, the housing market has begun to turn with easing inflation, with central banks, including those in Sweden and the U.S. – two of Skanska’s key markets – kicking off rate cuts last year.
In the construction segment, Skanska expects it will be a while until rate cuts begin to stimulate the European building markets, while the U.S. market will remain strong, supported by economic growth and federal funding programmes.
“We have multiple repeat clients in the data center sector, and we don’t see any slow down, the pipeline is good. We believe the market will be strong for at least a year ahead,” Danielsson told Reuters.
Skanska’s order intake at its construction division – its biggest – jumped to 49.6 billion crowns in the third quarter from 44.1 billion a year ago. It was up 11% from the previous quarter on a currency-adjusted basis.
Skanska has proposed a dividend of 8 crowns per share for 2024.
Source Homevior.in
