During 2016 Skanska’s shares improved by 30%. It went particularly well for the construction company during the second half of the year after Donald Trump was elected president in the USA and promised investment in infrastructure.
However despite great hopes for 2017, profitability has not kept up. In the first quarter operating margins were only 1.6%. On Friday the company notified of a write-down of 420 million kronor for its civil operations in the USA and a write-down of 360 million kronor for its British operations.
The profit in the group’s construction operations was only 0.2 billion kronor, which means the quarter’s profits are expected to fall to 1.5 billion kronor from 1.7 billion during Q2 last year.
Skanska CEO Johan Karlström has said the construction company will not help build Donald Trump’s border wall between Mexico and the US. “We believe in openness and equality,” Karlström said during a presentation of the firm’s interim report on Friday.
Skanska posted a pre-tax profit of SKr 3.2 billion for the fourth quarter and an operating profit of SKr 3.3 billion.
Skanska employs 7,750 people in Poland, with sales in the country accounting for 7 percent of the builder’s total turnover.
Executive vice president Roman Wieczorek is now concerned about political developments, since national-conservative party Law and Justice came to power in 2015. Measures such as appointing its own members to the Constitutional Court and new legislation allowing the government to appoint and dismiss key public service roles have put Poland on a collision course with the EU and the European Commission has launched an inquiry.
“Many of the changes are leading to greater polarisation in society, which is not good. It could create instability in the future,” says Roman Wieczorek. He thinks there is a risk that economic support from the EU may be reduced.
Swedish construction company Skanska is under investigation for allegedly participating in a cartel and for paying bribes to Brazil’s state-run oil company Petrobras. According to Swedish Radio’s Ekot, Brazilian prosecutors will formally charge Skanska within the next month.
“Skanska’s employees have personally paid bribes to Petrobras senior managers,” Prosecutor Carlos Fernando dos Santos Lima told Ekot.
Evidence of Skanska’s involvement, including witness reports, telephone bugging and documents is said to be convincing.
Some 25 firms are so far suspected of being part of the cartel, and took it in turns to pay bribes to Petrobras executives.
One of the Petrobras senior managers is said to have told police investigators that he received millions of kronor in bribes from Skanska’s representative in Brazil.
Skanska’s senior management has previously denied any knowledge of the bribery scandal.