Annual Report 2008 - Skanska

46 47 49
Stimulating school
environment in Bristol
More than 1,100 beds
at Derby City General
Hospital
A much-anticipated
highway in Poland
Despite higher yield requirements when appraising assets, the project
portfolio in the Infrastructure Development business stream contains
surplus value of about SEK 6 billion.
During 2008 the estimated unrealized
development gain in Skanska’s
Infrastructure Development portfolio
fell by SEK 0.3 billion to SEK 5.8 (6.1)
billion. This decline was due to the
divestment of the Ponte de Pedra hydropower
plant in Brazil, the increase in the
discount rate, adjusted assumptions about reduced
traffic flows on the Autopista Central toll highway in
Chile as well as positive effects related to time value and
investments.
During 2008, the divestment of Skanska’s stake in
Ponte de Pedra was recognized as income. In conjunction
with this, development gains totaling SEK 684 M
were realized. Earnings were also reduced by a net
impairment loss related to the Breitener power plant in
Brazil amounting to SEK 58 M.
Public-private partnerships
Public-private partnerships mean that private market
players provide facilities and buildings to public agencies.
This often implies a number of macroeconomic
advantages for customers, taxpayers, users and builders.
The model makes more room for investments in public
facilities by spreading the cost of large public works
investments over longer time periods. It lowers life-cycle
costs and also increases the benefit to users because the
service or facility becomes available earlier than would
be the case with traditional procurement and financing.
Public-private partnership projects create valueadded
for Skanska by generating large construction
assignments as well as continuous revenue and cash
flows during the lengthy operation phase. In addition to
construction assignments, in many cases Skanska is also
responsible for long-term service and maintenance contracts.
From an investor perspective, Skanska Infrastructure
Development (Skanska) creates assets characterized
by reliable cash flows over a service life lasting many
years, once the operation phase begins.
The development process
In public-private partnership projects, Skanska is involved
in the entire development chain from design and
financing to construction, operation and maintenance.
By assuming an overall responsibility, Skanska optimizes
both construction and operating costs. Skanska-led
consortia are awarded these projects not only because of
price but, above all, on the basis of how well the product
they offer meets the needs of the customer today and in
the future.
During the development process, which is led by
Skanska, Årligt bedömt the customer, kassaflöde i owners Skanska (Skanska IDs projektportfölj and its partners),
per december Skanska’s 2008construction 1)
units and suppliers of operating
and maintenance services are integrated into the
Mkr
2 000
task from the start, which reduces the overall risks
1 500
to Skanska.
1 000
Risk management – generating value-added
500
The investment, which is Skanska’s part of the value
0
chain, must meet ordinary commercial financial return
targets. In order to create commercially attractive longterm
assets, Skanska must efficiently manage risks
2014 2019 2024 2029 2034 2039
and
–500
2009
•
2044 2048
Inflöde: 30,4 Mdr kr (räntor, utdelningar och återbetalningar)
Utflöde: –0,7 Mdr kr (framtida kontrakterade investeringar)
1) Kassaflödena är omräknade till valutakurserna per den sista december 2008.
The London Hospital is one of
two large hospitals included
in The Barts and The London
Hospitals, Skanska’s largest
public-private partnership
contract. The project includes
many elements that will be
completed successively over
several years. The first large new
building at The London Hospital
has a floor area of 142,000 sq. m
(1.53 million sq ft.).
SEK M 2008 2007
Revenue 55 116
Operating income 396 –107
Investments –396 –73
Divestments 1,283 178
Operating cash flow from business
operations 1 749 –13
Capital employed, SEK bn 1.8 2.5
Gross present value, project portfolio 8,363 9,361
Return on capital employed, % 2 16.2 58.0
Employees 133 121
1 Before taxes, financing operations and dividends
2 Calculated in accordance with the definition of financial targets
Estimated annual cash flow in Skanska ID's project
portfolio, December 2008 1
SEK M
2,000
1,500
1,000
500
0
–500
2009
2014
2019
2024
2029
2034
2039
Inflow: SEK 30.4 bn (interest, dividends and repayments)
• Outflow: SEK –0.7 bn (contracted future investments)
1 Cash flows have been translated into SEK at the exchange rates prevailing on
December 31, 2008.
2044 2048
Skanska Annual Report 2008 Infrastructure Development 43