Swedish construction company Skanska on Thursday reported a 22% fall in fourth-quarter net profit on the back of lower sales and tougher conditions on the Danish market.
The Stockholm-based company said net profit fell to 845 million kronor (92 million euros; $121 million) from 1.08 billion kronor in the year-ago period, falling short of analysts forecasts of 954 million kronor (104 million euros; $137 million). For the full year 2006, it came to 3.66 billion kronor (400 million euros; $524 million) from 3.89 billion kronor in 2005.
Sales for the three-months ending Dec. 31 slipped to 34.76 billion kronor (3.8 billion euos; $5 billion) from 36.07 billion kronor in the same quarter last year.
In Denmark, the result was hurt by 285 million kronor (31 million euros; $41 million) in restructuring costs and project impairment losses.
Skanska Chief Executive Stuart Graham said that, despite the disappointing losses in Denmark, construction margins rose.
"The construction units in Sweden, Norway, U.K., Poland and Latin America all surpassed their targets." He said the U.S. business also was improving a trend he expected to continue in 2007.
"The order backlog is satisfactory and the outlook for 2007 remains healthy," he said, but warned that overheated market conditions as well as costs would present a "significant challenge" for Skanska this year.
Skanska shares fell 0.7% to 151 kronor (16.51 euros; $21.63) in Stockholm.