Skanska AB said European markets are expected to remain weak with intense competition in the coming year as the Nordic region’s biggest builder posted third-quarter profit that missed analysts estimates.
Net income fell to 1.04 billion kronor ($161 million) from 1.14 billion kronor a year earlier, the Stockholm, Sweden-based company said in a statement today. Analysts predicted profit of 1.17 billion kronor, according to the average of seven estimates. Revenue increased 4.4 percent to 34.8 billion kronor, according to segment reporting, topping the average estimate of 34.7 billion in a Bloomberg survey.
“The extended market recession in the Czech Republic and Slovakia has led to a substantial reduction in our business volume,” Chief Executive Officer Johan Karlstrom said in the statement. “The political situation surrounding the U.S. economy is resulting in a more cautious attitude among some private clients in the U.S. energy sector, which may delay the start of new projects.”
Skanska has been targeting higher growth in the U.S. commercial property market as Europe suffered from lackluster growth. The company will invest about 2.3 billion kronor in two new projects in the country, while it sold developments in Finland and Poland. The U.S. contributed about 30 percent of revenue in 2012, compared with more than 60 percent from Europe, including the Nordic countries.
Skanska’s shares fell as much as 2.7 percent in Stockholm and were down 2 percent at 123.9 kronor as of 9:22 a.m. local time. That paired their advance to 17 percent this year for a market value of 52.2 billion kronor.
Skanska said its Czech unit has been restructured and the value of assets and projects were written down by 220 million kronor in the third quarter.