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

4/15/2008 9:12 AM CET
Press release

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.