Dive Temporary:

• Swedish developer and builder Skanska reported 1.3 billion Swedish Krona ($128 million) in working revenue for Q2 2023, a 44% lower from the identical interval a 12 months in the past, largely as a consequence of sluggishness within the residential and business property growth sectors.
• Regardless of the revenue drop, the corporate reported a report excessive order backlog, CEO Anders Danielsson mentioned throughout an earnings name Friday. With 250.3 billion SEK so as backlog and 63.2 billion SEK in new order bookings for the quarter, “We proceed to have a powerful monetary place,” Danielsson advised stockholders. 
• Continued power in building, largely because of U.S. and Norway civil building work, continues to buoy confidence for the contractor, CFO Magnus Persson advised Development Dive throughout a post-earnings interview.

Dive Perception:

Persson stays bullish on the U.S. infrastructure market, largely because of the $1.2 trillion Infrastructure Funding and Jobs Act. 

“It is a very sturdy civil market within the U.S. in the meanwhile, and now we have a fairly good occasion horizon into the longer term in that market as a result of we are able to see the bid pipeline, and we count on the market to proceed to be this sturdy at the least 12 months out forward,” Persson mentioned.

Civil U.S. initiatives gained final quarter embody the $1.24 billion design-build contract to enhance roadways round JFK Airport in Queens, New York. Skanska gained the contract as a part of a three way partnership with New York-based Halmar Worldwide.

However Persson added he’s additionally proud of how the general building arm has carried out within the U.S. and past for the final two years, exterior of simply infrastructure.

“We now have the most important order backlog we have ever had within the historical past of Skanska,” Persson mentioned. “And so the longer term appears to be like very brilliant in that sense.”

Leasing enterprise

Skanska reported a 15 million SEK loss in working revenue from business property growth in Q2, a large drop from the 834 million SEK it reported from the identical interval the earlier 12 months.

Workplace staff’ presence within the U.S., particularly the West Coast, has remained restricted because the COVID-19 pandemic, Persson mentioned. However the lack of staff in-office is a uniquely American difficulty, because the pendulum has swung again in Europe.

“In Central Europe, within the U.Okay. and within the Nordics, the pendulum has shifted again,” he mentioned. “So persons are perhaps not one hundred percent again, however near it, in lots of instances.” 

Nonetheless, there was a technique shift within the workplace atmosphere — as with the rest actual property, location, location, location is vital to leasing success, Persson mentioned. However Skanska additionally pursues building design to suit finish use; aiming for greener buildings that value much less to function. 

However even within the face of a weaker property growth market, Persson voiced confidence.

“I simply need to emphasize the power now we have right here on our steadiness sheet, which is vital to form of seeing this by way of to up till the market improves a bit,” Persson mentioned. “We now have loads of endurance in our steadiness sheet.”