Global economic woes have not yet affected business for Swedish-based contractor Skanska A.B., which has just reported an order backlog worth 14 months of work.
Skanska is, nevertheless, bracing itself for an uncertain future market, under the new leadership of Johan Karlström, 50, who takes over as president and chief executive officer this April.
So far, there has been “no significant decline in enquiries or requests for proposals,” says Stuart Graham, who has headed Skanska for six years. But he concedes it is “difficult to look down six months from now and say what the situation will be.”
Skanska ended 2007 with a backlog of $22.5 billion, up 8.2% over the year before. “We have a lot of tenders still in New York...it is a bit slower in other markets in the U.S....particularly, I would say, in California, “says Graham.
Group sales last year rose 10.5% to $21.4 billion, producing $834 million operating profit, up 13.5% on the year before.
Construction sales rose 14%, adjusted for exchange rates, to $20.5 billion. Operating profit in the sector rose 33% to $686 million, representing a margin on 3.4%, compared to 2.8% a year earlier.
Looking ahead, Graham says: “the top line for 2008 will be pretty good.”
During the year, he will resettle the U.S., initially taking over as chairman of the company’s building and civil engineering units during the leadership transition. He will later become an adviser, says Sverker Martin-Löf , group chairman.
When Stuart took over in 2002, “Skanska was in a difficult situation,” says Martin-Löf. “A lot has been done to straighten out the company,” he adds.
Stuart’s replacement, Karlström, started out as a carpenter, joining Skanska from Sweden’s Royal Institute of Technology in 1985. He is currently president of Skanska U.S.A. Building.
Karlström declares “a genuine passion for the industry” in which “a lot of fast-moving decisions” have to be made. The industry “is about people,” he adds.