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Skanska CEO slams writedowns as ‘not acceptable’

Skanska CEO Johan Karlström has slammed its UK and US project writedowns as “not acceptable” after revealing a 451m SEK (£41.9m) half-year loss at its European business.

The loss in the Europe division in the six months to June was mainly due to UK writedowns, according to Mr Karlström.

Skanska revealed around £33m of writedowns at its UK unit last week when it issued a profit warning.

It also announced writedowns worth 420m SEK (£39m) in the US.

He said the impact of these writedowns “overshadows the strong performance” in the Nordic, Swedish and the majority of US operations.

He added: “This is of course not acceptable and we have and are taking additional actions to restore the profitability in the US, UK and Poland, where the latter is progressing according to plan.”

In the UK, Mr Karlström said there was uncertainty due to Brexit and the ongoing “long, winding discussions”.

The outcome of the general election had also contributed to this uncertainty, he added. 

Following Skanska’s UK’s profit warning last week, chief executive Gregor Craig, who took over from Mike Putnam in May, said he was “actively addressing the issues” relating to the writedowns. 

In the half-year, the group reported a 10 per cent drop in operating profit to 3.3bn SEK (£306m). 

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