Skanska UK construction restates 2022 profit down £30m

Aaron Morby 1 week ago
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Skanska’s UK construction business saw operating profit slump to £6.3m last year on turnover that remained stable at £1.3bn.

The firm also restated its previous financial performance in 2022, originally reported as a £55m pre-tax profit. This has now been cut by £30m to £24m in 2022.

Skanska said the adjustment was required after the estimated costs to complete several contracts had to be revised.

Operating margins were squeezed to 0.5% in 2023, down from the 3% originally reported in 2022 (restated 0.9%).

Chief financial officer and executive vice president Meliha Duymaz, who joined Skanska UK from Network Rail at the end of 2022, said that during the year the group identified a number of contracts where the estimated total costs required to complete the contract required a significant increase.

She said: “Further investigation revealed various underlying causes of the estimated total cost increases, including errors in forecasting, the discovery of previously unidentified risks which the group should have been aware of and the misinterpretation of contract terms and obligations and therefore related costs.

“The group determined that a number of these underlying causes existed at the previous reporting date and would have resulted in the recognition of different contract revenues and costs in the prior year if the information that should have been reasonably known was known.

“The group has concluded that the operating performance of the affected contracts reported in the financial statements for the year ended 13 December 2022 was materialy misstated.”

Last year Skanska booked £1bn of orders including a £219m project for a new military facility at
RAF Molesworth, Cambridgeshire and a £158m contract for the M&E fitout of the Telehouse Office datacentre in London.

 

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