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Investing.com -- Skanska AB reported solid second-quarter results Friday, with residential development performance exceeding expectations and strong construction order intake providing key positive takeaways.
The Swedish construction and development company maintained a 3.9% operating margin in its construction segment, outperforming analyst consensus of 3.6%.
Order intake reached approximately SEK 56.7 billion, in line with estimates but down about 7% year-over-year, resulting in a rolling 12-month book-to-build ratio of 1.13x compared to 1.15x in the first quarter.
In the residential segment, Skanska sold 409 homes in the second quarter, up 44 from the previous quarter but down 106 compared to the same period last year.
House starts increased significantly to 420 units versus 203 in the first quarter and just 37 in the second quarter of 2024.
The production sales rate improved to 52% from 49% in the previous quarter, though completed unsold homes increased to 516 from 457.
Commercial development saw divestments totaling SEK 672 million, a substantial increase from SEK 25 million in the first quarter but well below the SEK 5,969 million recorded in the second quarter of 2024.
The company’s portfolio included 23 completed properties with a 74% lease rate, up from 71% in the previous quarter.
The investment properties segment reported an economic occupancy rate of 83%, slightly down from 84% in the first quarter, with a carrying value of SEK 8.17 billion.
Skanska’s adjusted net cash position stood at SEK 9,651 million at quarter end, down from SEK 11,600 million in the first quarter but higher than forecasted due to smaller working capital outflow and higher net divestment inflow.
The company improved its outlook for European residential development and Swedish civil construction, providing potential relief for investors despite continuing challenges in the overall development environment.
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