Swedish contractor Skanska has announced an operating profit of $96m for its global operations in the second quarter of the 2020, 69% less than the $313m it posted for the same period last year.
The company said the fall was caused by the effects of the coronavirus on construction orders in the UK, the US and Europe, which account for 78% of its business, although the impact was lessened by its win on the UK’s HS2 high-speed rail project.
Activity at its property development businesses was also hit by the virus, with its commercial sector showing a slight loss.
The company, the largest construction group in Scandinavia, has still succeeded in making a $407m return over the first six months of the year, and has maintained its total revenue at $8.7bn, compared with $9.2bn in 2019.
The company described its performance as "solid" despite the uncertain market outlook, and added that it was adapting to the "new normal" of operating during a pandemic.
Anders Danielsson, the company’s chief executive, commented in an interview with Bloomberg that the company saw a "definite improvement" towards the end of the second quarter, and that the Nordic region had been less affected than the rest of Europe and the US.
He added that the underlying profitability in construction improved, and the company’s aims remained the improvement of margins in construction and the growth of its commercial development workstream.
He said the HS2 order "helped a lot", but that orders were slow in Europe, apart from the Nordic region, and the US during the second quarter.
Skanska’s joint venture with Costain and Strabag won a contract for the design and construction of Phase 1 HS2 in April, which the company said was worth £1.1bn to it.
Image: Work under way on HS2’s Euston terminus (HS2)
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are the the 3p projects the main cause of Skanska’s losses ?