Construction Firm Skanska Sees Improving U.S.

Stockholm, Sweden, Nov. 5, 2009--Swedish construction company Skanska AB Thursday posted stronger-than-expected net profit for the third quarter on the back of healthy margins, and said economic conditions seem to be improving even though sales in some of its key markets will continue falling in 2010.

"Although there are various indications that the economic cycle has passed its low point, the fact remains that the construction and real estate sector is late in the economic cycle and that total construction investments in Skanska's markets are continuing to decrease," said CEO Johan Karlstrom.

"This means that we anticipate continued revenue declines in construction during 2010, primarily in the Nordic countries and the Czech Republic," he added.

Still, Skanska said demand in the third quarter was good in some market segments in the U.S., including health care, education and public administration.

"We expect that the large government stimulus packages will have a positive impact on civil construction markets, especially in the U.S.," it said.

Revenue from public sector and government contracts has so far helped keep the Stockholm-based company fairly resilient during the economic downturn.

Skanska reported net profit for the three months to Sept. 30 of 1.13 billion Swedish kronor ($160 million), down from SEK1.20 billion the previous year but ahead of analysts' expectations for SEK801 million.