Skanska CFO: ‘We probably have the best balance sheet in the industry’

Dive Brief:

  • Swedish contractor Skanska reported Thursday that second quarter profit decreased roughly 1.3% year over year to about $186 million (1.9 billion Swedish Krona), or less than one cent per share.
  • Meanwhile the contractor’s revenue reached roughly $4.4 billion for the April through June 2022 period. That’s up from around $3.5 billion a year ago, representing an increase of 18% when adjusting for currency effects like inflation, the contractor said.
  • “I think we stand extremely strong at the moment,” Magnus Persson, CFO, told Construction Dive. “We’ve done that for a long time, but if you look on our balance sheet, we probably have the best balance sheet in the industry.” 

Dive Insight:

CEO Anders Danielsson in an investor call described U.S. construction order bookings “very healthy.” Skanska reported about $1.28 billion in Q2 bookings — down from about $2.28 billion year over year — with a 96% book-to-build ratio and 19 months of production for its backlog.

Danielsson said Skanska has continued to be selective about bidding on projects in Central Europe since the war in the Ukraine began earlier this year. In the builder’s Q1 report, Danielsson said the conflict had created uncertainty in the region, which slightly hindered Skanska’s operations in Europe.

While the war has impacted the supply chain, inflation continues to skyrocket and a global recession looms, it’s the climate crisis that most has Persson’s attention. He described reducing carbon emissions as one of his top two concerns.

The other? He said he’d like to see office leasing pick up — which he does anticipate, but with the uncertainty of the pandemic, employers continue to rent one year at a time, due to the lack of visibility into the future. Skanska develops commercial properties, in addition to being a construction firm.

Nevertheless, the CFO said that Skanska will continue to manage predictability. Persson noted each year comes with its own set of challenges, even though recent years seem to bring more than their fair share.

An anticipated bump in infrastructure work in the U.S. will help to keep the firm’s pipeline strong, Persson said. The CFO noted that rising interest rates raises concerns for many when it comes to upcoming work.

“On the other hand, we have tremendous government support, and also the federal level with the support packages that are coming out that we think we will counteract this to quite some extent,” Persson said.

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