Annual Report 2011 - Skanska

Note34Effect of changes in foreign exchange ratesExchange rates are dealt with in compliance with IAS 21, “The Effect of Changes inForeign Exchange Rates.” See “Accounting and valuation principles,” Note 1.Exchange ratesDuring 2011 the Swedish krona fluctuated against the other currencies in which theGroup does business. The average exchange rate for the krona against the Group’sother currencies strengthened compared to 2010, which implied negative currencyrate effects in the consolidated income statement. In addition, currency rates hada weakening effect on the statement of financial position, because the closing dayexchange rate for the Swedish krona was also stronger against the Group’s othercurrencies than the year-earlier rate.Average exchange rateChange in percentCurrency Country/zone 2011 2010 2009 2010–2011 2009–2010ARS Argentina 1 1.573 1.843 2.059 –15 –10CZK Czech Republic 0.367 0.377 0.402 –3 –6DKK Denmark 1.212 1.282 1.427 –6 –10EUR EU euro zone 9.029 9.551 10.62 –5 –10GBP United Kingdom 10.41 11.13 11.92 –6 –7NOK Norway 1.158 1.192 1.216 –3 –2PLN Poland 2.198 2.390 2.457 –8 –3USD United States 6.493 7.208 7.653 –10 –61 The headquarters of Skanska’s Latin American home market is in Argentina. Operations are mainly carried out using two currencies, ARS and BRL (Brazil).During 2011 the average exchange rate of the ARS against the Swedish krona fell by 15 percent and the BRL fell by 5 percent. Also taking into account the otherLatin American currencies in which Skanska carries out operations, the overall currency rate effect on the income statement in Latin American operationschanged by –10 percent.Closing day exchange rateChange in percentCurrency Country/zone 2011 2010 2009 2010–2011 2009–2010ARS Argentina 1.602 1.710 1.880 –6 –9CZK Czech Republic 0.345 0.357 0.391 –3 –9DKK Denmark 1.199 1.209 1.384 –1 –13EUR EU euro zone 8.917 9.013 10.30 –1 –12GBP United Kingdom 10.65 10.50 11.40 1 –8NOK Norway 1.147 1.153 1.237 –1 –7PLN Poland 2.001 2.272 2.495 –12 –9USD United States 6.892 6.803 7.188 1 –5Income statementDuring 2011, the average exchange rate of the SEK strengthened against most currencies. Because the Group earns more than 30 percent of its revenue in USD, this had animpact of SEK –3.5 billion on revenue. The total currency rate effect on Group revenue was SEK –7,031 M (–5,303), equivalent to –5.8 (–4.3) percent. The total currency rateeffect on the Group’s operating income was SEK –239 M (–165), equivalent to –2.8 (–3.0) percent. See also the table below.Currency rate effect by respective currencyUSD EUR GBP NOK CZK PLN Other Total2011Revenue –3,472 –520 –883 –409 –194 –908 –645 –7,031Operating income –112 20 –24 8 –2 –82 –47 –239Income after financial items –115 20 –29 5 –1 –85 –34 –239Profit for the year –59 16 –22 4 –1 –67 –28 –157USD EUR GBP NOK CZK PLN Other Total2010Revenue –2,121 –908 –1,018 –236 –588 –250 –182 –5,303Operating income –78 3 –29 –2 –30 –16 –13 –165Income after financial items –77 5 –31 –4 –29 –18 4 –150Profit for the year –42 6 –28 –3 –25 –14 19 –87Skanska Annual Report 2011 Notes, including accounting and valuation principles 153