Skanska announces around £33m UK writedowns

International infrastructure company Skanska has announced a profit warning including writedowns of about £33m from its UK operations.

It said that after writedowns totalling around £70m from the US and UK, operating income for the Skanska Group for the first six months of 2017 is expected to be about £300m.

In a statement, Skanska UK said the main reasons for the writedowns here were ‘lower than anticipated production rates, projects being delayed with estimated penalties and multiple customer-driven changes, which have caused cost overruns’.

It added: ‘In these areas, we continue to have constructive dialogue with our customers to reach commercial agreement.’

Skanska UK said the project writedowns were a reflection of its ‘prudent and transparent approach to accounting’.

‘Our policy is to account for the total estimated cost to complete our projects; we do not account for any revenue from change orders until a commercial agreement has been reached with the customer,’ it said.

Skanska UK added that its executive management team, under recently appointed president and CEO Gregor Craig, ‘is actively addressing the issues around these write downs’ and that it ‘continues to maintain its strong balance sheet and cash position’.

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