STOCKHOLM (Reuters) - Swedish builder Skanska (SKAb.ST) beat forecasts with a jump in first-quarter profit on Tuesday but lowered its market outlook as it braces for the impact of the new coronavirus.
Operating profit rose to 2.90 billion crowns ($290 million) from 488 million and beat the 1.46 billion expected by five analysts, Refinitiv Eikon data showed.
Order intake at Construction, which books the bulk of group sales, grew to 41.3 billion crowns from 27.3 billion.
Skanska’s shares rose 4% in early trade.
Large divestments in its property development operations and continued recovery in its restructured Construction division lifted profits.
The largest builder in the Nordics and a leader in the U.S. market, Skanska lowered its outlook for the next 12 months in nearly all business segments and markets.
“To make sure that we maintain that position long-term we are taking actions that will allow us to adjust to a future that will look different after the COVID-19 pandemic,” it said.
It said the shutdown of some projects, mainly in the United States and Britain due to government decisions, and the fact some others had slowed down, would squeeze volumes and earnings for some time.
“The top priority is to get these projects back in full production as soon as possible and avoid additional shut downs or reductions in execution,” CEO Anders Danielsson said.
He said uncertainty and risk aversion in financial markets was likely to slow divestments in its commercial property development division for some time.
Skanska predicted the division’s leasing activities would also slow. So far, occupancy rates were satisfactory in high-quality green developments in attractive locations, it said.
The housing market is likely to weaken as consumer confidence falls due to weaker economies and higher unemployment, it said.
“Already now we can see that home sales in the beginning of the second quarter are off to a slow start,” Danielsson said, adding that adjusting Skanska’s residential development division to the new situation was also a priority.
(This story corrects name in last paragraph)
Reporting by Anna Ringstrom; editing by Niklas Pollard and Jason Neely