Skanska forced to revise 2022 profit down after finding project costs underestimated by £30m | News

Skanska has been forced to correct its profit figures for 2022 after admitting it understated the cost of several contracts by £30m.

In a note accompanying its 2023 financial statements, the company’s UK construction arm said its adjusted pre-tax profit for 2022 was £24.5m, after it said the amount needed to complete the work had increased by £30.5m.

It added: “Further investigation revealed a variety of underlying causes for the estimated overall cost increase, including forecasting errors, the discovery of previously unidentified risks that the group should have been aware of, and misinterpretation of contractual terms and obligations and consequently the associated costs.

“The Group determined that a number of these underlying causes existed at the prior reporting date and would have resulted in the recognition of different contract revenue and expense in the prior year had information that reasonably should have been known been known.”

The revelation comes after the company announced its 2023 results showed a pre-tax profit of £27.4m – a 12% increase on the revised 2022 figures – on turnover of £1.3bn.

The company said its cash and cash equivalents at year-end were £396m, down from £441.5m. It said this was mainly due to the payment of a dividend to the parent company.