[ad_1]
Swedish automaker Skanska on Friday announced an unexpected drop in operating profit in the first quarter, as profit from its commercial development activities fell, leading to a decline in equities.
The operating profit of the largest builder in the Nordic region was 488 million kronor ($ 51.2 million), compared with an average forecast of 1.01 billion badysts.
A year earlier, Skanska – which is also one of the largest builders in the United States – posted a profit of 652 million crowns.
The operating profit of the commercial real estate development division fell from 860 million euros to 84 million euros, against a forecast of 484 million badysts.
CEO Anders Danielsson, however, told Reuters that the unit had worked as expected and that the divestments made during the quarter had generated good margins. The interest of tenants and investors in all markets remained strong, he said in an interview.
Skanska's commercial and residential real estate development operations have grown rapidly in recent years and account for more than three-quarters of profits.
Real estate development carries a higher risk for the builder, but offers higher profits than construction work ordered by a client.
"The commercial real estate division is the one that is clearly worse (than expected) but it is very volatile and I expect it will pick up in 2019," said Albin Sandberg, an badyst at Kepler Cheuvreux.
"The building margins are not big but no disaster either," he said.
Source link
