Skanska will take a SEK 335 M charge in the UK. Preliminary consolidated operating income for the first quarter 2008 amounts to SEK 1,080 M Skanska will take a SEK 335 M (GBP 27 M) charge in the UK in the first quarter 2008, mainly related to three projects with fixed price contracts. The projects, of which two have been described in earlier interim reports, are delivered on a PPP (Public Private Partnership) basis where Skanska is responsible for financing, design, construction and operations during a defined period. The projects have a combined construction value of approximately SEK 14 bn and production spans over several years. During the production period, the project scope has changed which has led to substantial increases in the cost to complete the projects on schedule. This is to be settled in negotiations with clients and subcontractors. Recent negotiations have proven it difficult to reach reasonable compensation for increased cost and this has led to a more pessimistic view on the financial outcome of the projects. “This type of fixed price contracts with long durations has traditionally resulted in higher than average margins at the same time as risks are greater in this type of projects. These events highlight the importance of that we continue to further improve our risk management for this type of projects”, says Skanska's President and CEO, Johan Karlström. Preliminary results for the first quarter 2008 The preliminary consolidated operating income for the first quarter of 2008 amounts to SEK 1,080 M (779). Order bookings during the first quarter amounted to SEK 34.8 bn (38.5). In the comparative period the New Meadowlands Stadium project was included in order bookings to the amount of SEK 7 bn. In Construction revenues rose by 14 percent and amounted to SEK 30,475 M (26,754). Adjusted for currency rate effects revenues rose by 17 percent. Operating income amounted to SEK 488 M (663). Beginning with the first quarter of 2008, the Danish construction unit, which is being wound down, is reported under ”Central”. Revenue and operating income for construction in the comparative period have been adjusted to reflect this. In Residential Development, the number of sold units decreased by 29 percent while the number of started units remained stable. In Commercial Development leases were signed for 81,000 sq.m. of space. No projects were sold during the period. Operating income in Infrastructure Development includes a gain of SEK 550 M from the divestment of the Brazilian power project Ponte de Pedra. Preliminary result Jan-Mar Jan-Mar SEK M 2008 2007 Revenue Construction 30,475 26,754 Residential Development 1,965 2,042 Commercial Development 343 265 Infrastructure Development 15 8 Operating income Construction 488 663 Residential Development 151 246 Commercial Development 39 76 Infrastructure Development 587 -96 Central -152 -123 Eliminations -33 12 Operating income 1,080 778 Jan-Mar Jan-Mar 2008 2007 Units sold in Residential Development Nordics 521 1,148 Czech Republic 317 31 Total 838 1,179 Started units in Residential Development Nordics 539 985 Czech Republic 440 0 Total 979 985 The complete interim report will be published on May 7. There will be a telephone conference on April 15 at 10.00 am CET where Skanska's President and CEO, Johan Karlström and the CFO, Hans Biörck, will answer questions. To participate in the telephone conference please dial +46 8 505 201 10 at least five minutes prior to the start of the conference. If you are unable to participate, there will be a replay facility available for seven days immediately following the teleconference. The number to dial is +46 8 505 203 33, code 792586. For further information please contact: Anders Lilja, Senior Vice President Investor Relations, Skanska AB, tel +46 8 753 88 01 Peter Gimbe, Press Officer, Skanska AB, tel +46 8 753 88 38. Direct line for media: tel +46 8 753 88 99 This and previous releases can also be found at www.skanska.com SkanskaABmay be required to disclose the information provided herein pursuant to the Securities Markets Act. Skanska is one of the world's leading construction groups with expertise in construction, development of commercial and residential projects and public-private partnerships. The Group currently has 60,000 employees in selected home markets in Europe, in the US and Latin America. Headquartered in Stockholm, Sweden and listed on the Stockholm Stock Exchange, Skanska's sales in 2007 totaled SEK 139 billion.
Skanska will take a SEK 335 M charge in the UK. Preliminary consolidated operating income for the first quarter 2008 amounts to SEK 1,080 M
| Source: Skanska AB