Skanska (SKA) Q3 2024 earnings summary

Executive summary

• Strong group performance in Q3, led by robust order intake and margin delivery in Construction, with record backlog at SEK 267 billion, especially in the US market.

• Residential Development saw improved sales and starts across the Nordics, but profitability was negatively impacted by BoKlok losses and restructuring.

• Commercial Property Development reported improved leasing activity, particularly in the US, but results were affected by impairment charges.

• Investment Properties delivered solid results with high occupancy (89%) and stable operational performance.

• Maintained a robust financial position and continued progress on carbon reduction, down 57% since 2015.

Financial highlights

• Construction revenue increased by 2% to SEK 41.8 billion, with operating income up 11% to SEK 1,517 million and a margin of 3.6% for the quarter.

• Residential Development revenue rose to SEK 1.7 billion, with a negative operating income of SEK 154 million due to BoKlok losses and write-downs; underlying margin excluding these effects is 7.9%.

• Commercial Property Development posted a negative operating income of SEK 113 million, with impairment charges of SEK 121 million and gains mainly from provision reversals.

• Group operating income reached SEK 1.3 billion, up from SEK 625 million last year, and earnings per share increased to SEK 2.28 from SEK 1.41.

• Operating cash flow was strong at SEK 6.2 billion, driven by working capital improvements and net divestments; available funds totaled SEK 24.9 billion.

Outlook and guidance

• US construction market remains strong, supported by federal funding and robust infrastructure investment; Europe is stable in civil but slow in building.

• Residential development is gradually improving in the Nordics, but a full recovery will take time; low-price segment remains weak.

• Commercial property investor sentiment is slowly improving, with US leasing activity picking up and stable demand for high-quality assets.

• The company plans to start more residential projects as market conditions allow.