4th year of steady profits for Skanska Construction Group (formerly Kvaerner Construction)

Press release 22/02/2001 00:00 CET

Skanska Construction Group has today (February 22) announced its fourth consecutive year of improving results with profits and margin on sales both continuing to grow against steady turnover.

The results for 2000 show turnover remained stable at £1,300 million while operating profit has increased by 43% to £24.0 million (1999: £16.8m). Profit before tax and goodwill climbed by 30% to £33.8 million (1999: £26.0m). The order book is slightly lower at £1,400 million (1999: £1,500 million) while the margin on sales figure has continued its year-on-year growth to 2.7% from 2.1% in 1999.

Skanska Construction Group’s chief executive, Keith Clarke, said: “These figures show that concentrating on improving operational performance, selective bidding and niche markets have proved successful in our bid for sustained profitability.

“Our emphasis remains on improving our supply chain management and project performance to ensure that our clients get value for their money. We remain committed to construction. We like it and we do it well.”

During 2000 the company continued to grow its niche markets. It bought Whessoe International, a design specialist for Liquid Natural Gas facilities and launched a new specialist business, Kontor, to target the growing London retail and commercial fit-out market where it boasts clients including Nike, Gap and Warner Bros.

In the UK the £340 million redevelopment of the MoD’s main building in Whitehall confirmed the group as a leader in design and build for PFI with work in hand to the value of £500 million. This takes the total value of financially closed PFI projects to date to over £1.5 billion.

Further work was won in the rail sector culminating in an invitation from Railtrack at the year-end to take over the Sunderland Metro System contract.

In Hong Kong Gammon Construction, which is jointly owned by Skanska and Jardines, had a good year with a number of significant new contracts in civils and piling as well as more than £250 million of residential and commercial tower projects on the island.

In India, publicly quoted local company Cementation India confirmed its position as the leading marine contractor by securing two new jetty contracts and winning the internationally–recognised quality standard ISO 9002 for port and harbour structures – the first company in the country to do this. Two earlier jetty contracts were completed and handed over.

The start of this financial year has also proved successful with more than £500 million of new contracts already secured. These include three major projects on Section Two of the Channel Tunnel Rail Link together worth £370 million and the £130 million, 40-storey Swiss Re office development in the City of London.