Salem Radio Network News Tuesday, September 28, 2021

Business

Builder Skanska posts profit jump but flags supply chain pressures

STOCKHOLM (Reuters) – Sweden’s Skanska on Friday reported a jump in second-quarter profit as building activity rebounds but flagged rising pressure on its supply chain.

The Nordic region’s largest builder and one of the biggest in the United States posted an operating profit of 2.34 billion crowns ($269.5 million) versus 845 million a year earlier when the pandemic halted much of the industry.

The result lagged pre-pandemic 2019, when Skanska posted a second-quarter profit of 2.74 billion crowns.

“Overall, market uncertainty is starting to decrease, and activity is picking up in our markets,” the company said in a statement.

“With higher activity levels, we are noticing bottlenecks and shortages of certain materials in the supply chain, causing price increases and increased price volatility.”

Skanska said is saw improved profitability in its construction division, while its residential property development business maintained high activity and profitability levels.

Its commercial property development business had a relatively muted quarter in terms of divestments despite continued strong investor interest. Uncertainty still hampered the leasing market but activity is picking up, it said.

Orders at its Construction division, which books the bulk of group revenue, jumped 35% to 49.8 billion crowns while its operating margin widened to 4.7% from 2.2%.

Swedish forestry group SCA said on Friday demand for solid wood products continued to strengthen supported by the building materials and construction sectors.

($1 = 8.6829 Swedish crowns)

(Reporting by Anna Ringstrom; editing by Niklas Pollard and Jason Neely)

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