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UPDATE 1-Skanska warns Q2 profit to be hit by project writedowns
July 14, 2017 / 7:00 AM / 2 months ago

UPDATE 1-Skanska warns Q2 profit to be hit by project writedowns

* Books SEK 420 mln writedown in U.S. civil ops

* Makes SEK 360 mln writedown in Britain

* Sees Q2 op profit of SEK 1.5 bln vs year-ago 1.7 bln (Adds detail, background)

STOCKHOLM, July 14 (Reuters) - Skanska is writing down the value of projects in the United States and Britain, the Swedish construction group said on Friday, resulting in a fall in second-quarter operating earnings.

Skanska said it was booking writedowns of 420 million Swedish crowns ($50.3 million) in its U.S. civil operations business and a writedown of 360 million on British projects.

After the writedowns, operating income was expected to fall to about 1.5 billion crowns from 1.7 billion a year earlier.

The mean analyst forecast for second quarter operating profit at Skanska was 1.9 billion crowns, according to Thomson Reuters I/B/E/S. Skanska is due to publish its earnings on July 20.

“In the U.S. civil operations the project writedowns are mainly due to not achieving estimated production rates and projects being delayed,” the company said in a statement.

“To reduce organisational costs and restore profitability the U.S. civil operations will focus on its core geographies and product lines going forward.”

Skanska said the writedowns in Britain also stemmed from slower-than-expected production rates and delays, with estimated penalties and multiple changes driven by clients causing cost overruns.

$1 = 8.3564 Swedish crowns Reporting by Niklas Pollard; editing by Jason Neely

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