Skanska’s strategy of focusing on margins rather than chasing turnover appears to be delivering the intended results.
First-half revenue of SEK 80.9bn (£6.85bn) represents a 3% fall when adjusted for currency effects but operating profit was up 61% SEK 3.2bn (£270m) and pre-tax profit up similarly to SEK 3.1bn.
Skanska president and CEO Anders Danielsson said: “In Construction, we are progressing in line with our strategic plan to gradually improve profitability. We are completing projects with low profitability, mainly in Poland and the USA, and focusing our operations in an overall simplified structure. We are also reducing the risk in our backlog of future work by being very selective in our bidding process.”
He added: “In Residential Development, the profitability is above our targeted level despite a slow Swedish market. The number of sold homes is in line with last year but we are starting up fewer homes to adapt to a slower sales pace and keep our market risk on a suitable level.”
Construction contributed SEK 76.2bn of total group revenue in the first half, with SEK 4.8bn coning from Residential and SEK 6.9bn from Commercial Property Development.