Review of 2010 – USD version - Skanska

The London skyline has reached a
new all-time high – Heron Tower
stretches to the record breaking
height of 230 metres, making it
the tallest building in the City of
London. The slender glass and
stainless steel clad structure,
located on the busiest corner of
London’s financial district will be
completed 2011.
Heron Tower has achieved a
BREEAM Excellent rating – the
highest level within the British
environmental certification system,
similar to the LEED environmental
system.
The south-facing façade has
3000 sq m of photovoltaic cells –
one of the largest in UK – that will
generate renewable energy and
create a solar shield.
Together with Skanska Commercial Development USA,
Skanska USA is carrying out two large office building projects
in Washington, D.C. and nearby Arlington, Virginia.
The American economy has begun its recovery, but
it has been a slow process. However, Skanska has been
able to take advantage of its leading expertise in the
educational and healthcare sectors as well as in green
construction.The civil construction sector remains
fairly healthy, but competition has intensified.
Building
Skanska USA Building improved its margin despite a
weak market. The downturn was clearest in construction
of office buildings for the manufacturing sector.
Meanwhile the weak residential construction market
has led to increasingly keen competition.
The education and healthcare sectors remained
stable. Skanska has a very strong market position in
these sectors thanks to long-term customer relationships,
geographic presence and green expertise.
The business unit was awarded new large hospital
contracts. The three largest in California and North
Carolina are each worth about USD 150 M.
Skanska’s team of experts on the construction of
energy-efficient data centers also managed to win two
large construction management contracts in Ontario,
Canada, worth a total of USD 390 M.
Toward the end of 2010, there were various positive
signals concerning U.S. consumer optimism and willingness
to spend, but the market for offices and other
commercial space is expected to be weak as long as high
unemployment lasts. In the education and healthcare
sectors, demand is expected to be good. We foresee
greater interest in continued Green Refurbishments and
energy-efficient data centers.
Skanska USA Building competes with such companies
as Turner, Bovis, Clark and Stucturetone.
Civil
Skanska’s civil construction operations remained at
a good level in terms of both income and revenue
during 2010.
The business unit’s strong earnings were due to
continuous improvements in planning and project execution.
In addition, several contracts had been received
in a favorable market situation.
Aside from transportation infrastructure, in which
Skanska has enjoyed a strong position for many years,
construction in the environmental field is increasing.
There is a growing need for water treatment facilities,
both for drinking water purification and wastewater
processing. Skanska USA Civil’s work with water treatment
projects expanded to Orlando, Florida.
During 2010 Skanska consolidated its position as
the foremost bridge builder in New York City, receiving
a new contract for renovation of the Brooklyn Bridge.
Meanwhile it is carrying out major upgrading of both
the Manhattan Bridge and the Roosevelt Island Bridge.
The market for transportation infrastructure,
including renovations and new construction of highways,
public transit systems and other facilities, is
expected to remain stable during 2011. The same applies
to water treatment facilities, where demand will generally
remain good. Meanwhile the strained public budget
situation means there is a risk that projects will be cancelled
or delayed but also raises hopes of new opportunities
in public-private partnerships (PPP).
Skanska USA Civil competes with a number of large
national market players, among them Kiewit, Granite,
PCL, Flatiron and Balfour Beatty, as well as with numerous
players in local and regional geographic markets.
Latin America
Skanska’s Latin American operations are dominated
by assignments in the oil, gas and other energy sectors.
Brazil, which is the largest single market for Skanska
Latin America, is continuing to show good growth.
Order bookings improved significantly compared to the
previous year, mainly due to greater investments in the
oil and gas industry.
The Brazilian economy benefits from rising commodity
prices. Skanska’s most important customers have adopted
very large-scale investment plans for the period until 2013.
During 2010, Skanska’s assignments for Petrobras
included constructing the first unit at a large new crude
oil refinery, the Petrobras Petrochemical Complex in
Rio de Janeiro state, Brazil. Skanska’s contract amount
was USD 250 M.
At various existing refineries, Skanska is also working
on expansions to boost efficiency and capacity as well as
improve the environmental performance of the refineries.
Skanska has a strong market position, but competition
for construction assignments is expected to remain tough.
Skanska’s business related to operating and maintaining
oil and gas production facilities is expected to remain
stable during 2011.
During 2010 Skanska Latin America together with
Skanska Infrastructure Development were awarded an
assignment to upgrade and operate a 200 km (125 mi.)
long highway in Antofagasta, northern Chile. The project
is being carried out as a public-private partnership and
includes USD 250 M worth of construction work.
In Latin America, Skanska competes with such companies
as Techint, Odebrecht, Camargo Correa, Andrade
Gutierrez and Salfa Corp.
In Brazil, Skanska is constructing one of the first projects at the new
Petrobras Petrochemical Complex in Rio de Janeiro state. Skanska’s
contract is worth USD 250 M. Petrobras is one of the world’s leading
energy companies and one of Skanska’s repeat customers.
Skanska Review of 2010 – USD version Construction 29