Skanska: 1Q profit rose 46 percent

STOCKHOLM, Sweden—Swedish construction company Skanska AB on Wednesday posted a 46 percent rise in its first-quarter net profit, boosted mainly by stronger sales and a gain from a stake sale in a project.

The Stockholm-based company warned, however, that, though the outlook for the construction of buildings looks good in most of its markets, particularly the Nordics and Central Europe, the growth rate is expected to decline.

Net profit for the three months that ended March 31 rose to 873 million kronor (euro93 million; US$145 million) from 600 million kronor in the same period a year earlier. Helping to lift its profit was the sale of its 50 percent stake in the Ponte de Pedra hydropower project, of which it received a capital gain of around 643 million kronor (euro69 million; US$107 million).

Sales in the quarter rose to 31.5 billion kronor (euro3.4 billion; US$5.2 billion), up from 28.5 billion kronor in the same three months in 2007.

Skanska shares fell 1 percent to 102 kronor (euro10.91; US$16.95) in Stockholm.

Johan Karlstrom, Skanska's new chief executive, said most of its operations reported "very good earnings" in the quarter, but that the results were "overshadowed" by project write-downs of 335 million kronor (euro36 million; US$56 million) in Britain "as well as by a slowing residential market in the Nordic countries."

Karlstrom also noted that the global financial turmoil "has continued, but our construction business stream has not yet been noticeably affected."

Karlstrom said Skanska has "the advantage of broad geographic dispersion, a good mix of operations and a strong order backlog."

Fredrik Skoglund, an analyst at Carnegie in Stockholm, called the results "a good mix."

"The U.S. is going strong, which is positive since most people were worried about that," he said, adding that Sweden had "very strong" margins, and that the company's future guidance looked positive.