Dive Brief:
- Skanska's nomination committee has proposed Hans Biorck, the company’s former chief financial officer, to be elected the new chairman, according to Bloomberg. Stuart Graham, current chairman, has announced he will not seek re-election.
- Biorck is widely credited as being part of the team behind Skanska’s expansion of its real estate development business and growth of its U.S. operations.
- Skanska is preparing to reveal its new five-year strategy next month, and, despite a few difficulties in its U.S. construction businesses, it has firm plans to continue its U.S. commercial and building divisions and further expand its commercial development arm, according to Helena Stjernholm, chief executive officer of the Swedish construction giant's largest investor, Industrivaerden AB.
Dive Insight:
Skanska, one of the largest construction companies in the world, has used its cash flow from U.S. operations thus far, Bloomberg reported, to finance and invest in U.S. property development. These include spec properties in Washington, a mixed-use residential building in Boston and tentative plans for Miami, Denver and Dallas. However, the construction giant has no current plans to expand via acquisitions and is willing to see lower revenue to grow its own businesses instead.
"We don’t really look at the top line, we look at how we can expand the bottom line," Skanska CEO Johan Karlstroem said earlier this month. "Top line growth is not the defining factor here."
Skanska’s U.S. construction operations has "hit turbulence," Bloomberg said, as the company posted a $74 million write-down in the third quarter of 2015 due to productivity issues and client design changes to large projects. Problem projects included the Apple "spaceship" campus in Cupertino CA, the Boston Green Line rail extension and the Bayonne Bridge renovation.
"What we should do in the U.S. is to make sure that we don’t go faster than what we have people and capabilities for," Karlstroem said. "What you’ll see is a continued operation with both USA Civil and USA Building, and also further expansion in commercial development."
