Swedish construction firm Skanska (OMX: SKA B) is down marginally after releasing its six-month interim report for 2011. The multinational posted revenue of 53.9 billion Euro, out of which 51.4 billion came from construction. The numbers were down a notch on 2010 but up when taking into account the strengthening Swedish krona.
Operating income includes 4.5 billion krona gain from divestment of the Autopista Central in Chile. Without this item, that the company calls its best investment ever, the group earned 1.6 billion, 1.42 out of which came from construction. Operating margin was down to 2.8 percent. Order intake was down 27% although 14.5 billion SEK booking for Nya Karolinska Solna in the comparison period explains slightly more than half of the decline. The company still has a 15 month order backlog. The company feels that there is a good chance to grow orders in the second half of 2011.
Building Construction market trend is still good in Nordic markets but remains weak in the UK. In the US the picture is more mixed and demand in some segments such as healthcare and data centres is good. There is growing uncertainty in Residential Development market in Sweden but overall the picture is rather similar than in Construction segment. Modern and efficient green properties are in high demand in Commercial Property Development, which also means high margins for these projects. Fiscal tightening is affecting Infrastructure Development projects.
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