Skanska has reported a drop in its operating profit for the first three months of the year as it pushed through restructuring plans.
Operating profit for the group fell 66 per cent year on year to SEK 639m (£53.6m) in Q1 2018, compared with SEK 1.86bn (£156m) in the same quarter of 2017.
The Swedish giant cited restructuring as the single biggest factor behind the decline.
Restructuring costs stood at SEK 670m (£56.2m) in the first quarter, with two-thirds of that attributed to the construction division and the remainder spread across infrastructure development operations and corporate activities.
Writedowns totalling approximately SEK 600m (£50.3m) on its operations in Poland also contributed to the year-on-year fall in profit.
Skanska’s construction division reported an operating loss of SEK 41m (£3.4m) in Q1, compared with a profit of SEK 392m (£32.9m) last year.
Revenue for the first quarter was up 8 per cent to SEK 36.95bn (£3.1bn) from SEK 34.18bn (£2.87bn) 12 months earlier.
Skanska president and chief executive Anders Danielsson said the firm had “worked intensively” in the first quarter on the restructuring, which is aimed at increasing the profitability of the group’s construction work outside of its traditional Nordic markets.
This has involved focusing on infrastructure works in the UK and US and “stabilising” its operations in Poland, which have drained cash in recent years.
Around 3,000 jobs are expected to be cut in 2018 as part of the restructuring, with approximately 2,500 of these occurring in its Polish operations.
Redundancies have been made in its UK business, which was restructured into two divisions in March.
Skanska warned that restructuring activities across its global operations would continue to reduce its cashflow throughout 2018.
The group announced its restructuring plan in January after “unsatisfactory performance” in its non-Nordic European construction operations led to a 66 per cent drop in operating profit in 2017.
Skanska said the overall outlook for its construction arm during the rest of 2018 was positive, with the exceptions of a weakening UK non-residential building market and Czechia civils work.
Weaker activity in the UK was blamed on Brexit-related uncertainty, but the firm said Britain’s civils sector was “stable”.
No major orders were booked in the UK in the first three months of the year.
In March a consortium involving Skanska pulled out of the bidding for the £1bn Silvertown Tunnel under the Thames.
Skanska is tipped to complete construction on the Midland Metropolitan Hospital following Carillion’s collapse.
West Midland metro mayor Andy Street has written to the Cabinet Office calling on the contractor to start work as soon as possible to avoid further delays on the troubled project.
Skanska shares were down 4.8 per cent on the Stockholm stock exchange by mid-morning.