Skanska's operating profit held up better than expected in the fourth quarter and the Swedish builder said the backlog of orders in its key construction arm remained at historically high levels.
The Nordic region's largest builder, and one of the biggest in the United States, reported on Friday operating earnings of 3.53 billion Swedish crowns ($339.8 million) in the quarter, down from 3.63 billion a year earlier. Refinitiv estimates, while based on only four analysts' forecasts, had predicted a far sharper slide in profit to 2.18 billion crowns. Skanska has seen a sharp slide in activity in residential and commercial property development in recent quarters as soaring inflation and interest rate hikes have begun weighing heavily on households and businesses. Its construction business, which accounts for the bulk of group revenues, has performed far better than its property development arms and order bookings in the quarter rose to 51.6 billion crowns from 42.3 billion a year earlier. "The order backlog is at a historic high," Chief Executive Anders Danielsson said in a statement. "Profitability has been strong and the full-year construction margin came in well above target." House prices have tumbled roughly 15% in Sweden over the past year, with a further decline seen by many economists, unnerving households and dampening residential property sales. Skanska said it was "slightly more cautious" in its outlook for the building market, with private residential and commercial development being the weakest segments, but added that supply chain strains and some building material costs were easing. "We expect home buyers in our markets to remain negatively impacted by the current economic situation, inflation and increased interest rates," it said. ($1 = 10.3894 Swedish crowns) (Reporting by Niklas Pollard Editing by Anna Ringstrom and Mark Potter)
