Skanska (SKA) Q2 2024 earnings summary

Executive summary

• Solid Q2 2024 performance with construction operating margin at 3.5%, strong order intake, and record-high order backlog, led by US operations.

• Residential Development saw increased sales volumes from low levels, with 515 units sold in Q2, but continued low profitability due to BoKlok losses.

• Commercial Property Development recorded five divestments, generating SEK 1.2 billion in gains and a divestment margin of 20%, with improved investor sentiment in Nordics and Central Europe.

• First acquisition in Investment Properties segment in Gothenburg (Citygate), portfolio value SEK 7.7 billion, economic occupancy 87%.

• Robust financial position maintained, with strong liquidity and capital allocation.

Financial highlights

• Revenue rose to SEK 47.4 billion (39.9), up 18% adjusted for currency effects, year-over-year.

• Group operating income SEK 2.6 billion (1.3), margin 3.5%; earnings per share SEK 5.03 (2.96); tax rate 24%.

• Operating cash flow from business operations SEK 0.3 billion (-1.8 billion); adjusted interest-bearing net receivables SEK 1.8 billion.

• Equity/assets ratio 36.1% (36.4%); return on equity 7.3% (11.1%).

• Cash, cash equivalents, and unutilized credit facilities at SEK 21.0 billion.

Outlook and guidance

• US construction market remains strongest, supported by federal infrastructure funding; stable civil markets in Nordics and Europe, but weaker building segments.

• Residential market activity increasing but recovery expected to be gradual, dependent on interest rates and cost-of-living pressures.

• Commercial property and investment property markets remain polarized but show early positive signals in select segments.