Peab upbeat on Nordic markets

Swedish contractor Peab reported net profit of SEK304 million (€33 million) for the first six months of 2011, down from SEK398 million (€43 million) in the first half of 2010 after higher winter costs and tough competition impacted results.

Nevertheless, the company was upbeat on prospects for Nordic markets this year after reporting an SEK2.3 billion (€252 million) rise in net first half sales to SEK19.7 billion (€2.2 billion), led by improved sales in its construction business, which is its largest division.

In total, Peab said it expected the number of ongoing building construction projects in Sweden to increase by 8% in 2011, while the market in Norway was forecast to grow by 6% this year and the Finnish market is set to grow by 2%.

Peab said its construction and civil engineering order backlog had grown by 9% year-on-year to SEK31.5 billion (€3.5 billion) by the end of the first half. Major contracts included a NOK165 million (€21 million) project to resurface 280km of road in the area around Trondheim in Norway and an SEK1 billion (€110 million) contract to build an extension of the Hotel Gothia Towers in Gothenburg, Sweden.

CEO and president Jan Johansson, who took the reins at the head of Peab in May this year, said the company believed the situation on the Nordic construction markets would continue to be good.

"Government finances in the countries where we are active are solid and there is a need to invest in construction and civil engineering. However, due to the growing unrest on the market we are well prepared if this situation changes," Mr Johansson said.