Builder Skanska’s Q4 profits tumble amid property value writedowns By Reuters

© Reuters. Skanska logos are seen printed on steel beams undergirding the Sixth Street Viaduct replacement project in Downtown Los Angeles, California, U.S., August 11, 2021. REUTERS/Bing Guan

STOCKHOLM (Reuters) -Skanska on Friday reported a 73% fall in fourth-quarter operating profit as property value writedowns weighed on the building group’s performance.

The Nordic region’s biggest builder had already warned in January it would book 2 billion Swedish crowns ($191.02 million)worth of impairments in the fourth quarter as well as value changes across its property development operations due to weak markets, in particularly in U.S. commercial real estate development.

“The fourth quarter brought a strong finish to a solid year for Construction, while Residential and Commercial Property Development remained impacted by weak property markets,” CEO Anders Danielsson said.

“In Project Development, the growth strategy is on hold and our focus is on sales and leasing activities…preparing for returned market activity,” he said in a statement.

Operating profit was 957 million crowns ($91.4 million) against a year-earlier 3.53 billion, despite a 4% sales increase.

Skanska predicted slowing commercial development markets in the coming year. For residential development, it sees a decline in the Nordics.

Order intake at the construction division, which books the bulk of group sales, fell to 44.1 billion crowns from 51.6 billion.

The group proposed a dividend for 2023 of 5.50 crowns per share, down from 7.50 crowns for the year before.

($1 = 10.4701 Swedish crowns)

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