Summary
- Skanska reported third-quarter construction orders of SEK68bn and a record backlog of SEK328.3bn.
- The contractor is assessing newer data centre developers more selectively because of financing and project execution risks.
- Demand from established technology customers remains strong, with an SEK11.2bn US data centre contract contributing to quarterly orders.
Skanska is tightening its assessment of newer data centre developers as the construction group weighs financing and delivery risks against continued demand for large computing facilities.
Chief executive Anders Danielsson has indicated that the Swedish contractor is becoming more selective when considering projects from developers without the financial strength or established delivery record of major technology companies. Demand from its largest customers remains strong, with those businesses continuing to commission substantial facilities.
The assessment follows a third quarter in which Skanska recorded SEK68bn in construction orders, compared with SEK39.9bn a year earlier. Its construction backlog reached an all-time high of SEK328.3bn, supported by major contracts including an SEK11.2bn data centre project in the United States.
Construction operating income increased to SEK2.3bn from SEK1.8bn, while the operating margin improved to 5.0% from 4.2%. Across the group, quarterly revenue reached SEK49.4bn and operating income rose to SEK2.1bn.
The results demonstrate the scale of work being undertaken by the contractor, although data centres account for only part of its wider construction activities. Skanska has not disclosed that every new development customer faces the same financing concerns.
Danielsson’s comments instead distinguish between established customers with substantial financial resources and newer developers pursuing projects that may depend on future financing, customer commitments, or changes in market conditions.
That distinction affects the risks assumed by contractors. Data centres require considerable expenditure before becoming operational, and a project can encounter financial difficulty even where the longer-term demand for computing capacity remains substantial.
A developer may secure land and begin design work without having obtained all necessary planning approvals, electricity capacity, or customer agreements. Construction contracts entered into during that period can expose contractors to programme changes, payment uncertainty, and delays in procuring critical infrastructure.
Skanska’s growing order book therefore sits alongside a more selective approach to accepting additional exposure. The company can continue building facilities for established customers while declining opportunities where financing or delivery arrangements do not meet its requirements.
Construction risk extends beyond the building
Large data centre developments combine conventional building works with substantial electrical and mechanical infrastructure. High-voltage substations, transformers, distribution equipment, backup generators, cooling systems, and associated control equipment must be coordinated with the construction of the data halls.
Many of these systems have demanding procurement and installation requirements. Changes to equipment specifications or delivery dates can affect subsequent construction activities, particularly when electrical and mechanical systems must be tested together before a facility enters operation.
The availability of a grid connection can also influence project completion. A building may be structurally finished while remaining unable to support its intended computing load because the required network infrastructure has not been energised.
Construction schedules consequently depend on arrangements involving more parties than the building contractor and developer. Electricity network operators, specialist equipment manufacturers, engineering consultants, and eventual customers can each influence the sequence of work.
Developers with substantial financial resources may be better placed to absorb delays or changes in specification, although their projects remain exposed to the same physical infrastructure requirements.
Newer developers can face greater pressure where financing has been arranged against anticipated future rental income. If customer commitments are delayed, the developer may have to carry interest costs and ongoing construction expenditure for longer than originally planned.
These risks become more concentrated when a company has only a small number of developments or depends heavily on one customer. A delay affecting a single major project can alter the business’s funding requirements and the timing of future investment.
Skanska’s approach does not suggest that all speculative data centre development is unviable. Rather, the financial arrangements supporting an individual project must be considered alongside its technical complexity and construction programme.
Demand remains strong but counterparties differ
Skanska continues to participate in data centre development outside the United States. In October, the company became involved in Bitzero’s planned 110MW Norwegian campus, providing an example of its work in the Nordic infrastructure market.
That project is distinct from the financing concerns raised in Danielsson’s latest comments, and there is no basis for treating Bitzero as one of the counterparties under additional scrutiny.
The broader market has also attracted greater attention from lenders and credit analysts. The amount of capital required to construct high-density computing facilities has increased, while some developers depend on financing arrangements that will need to be refinanced before the underlying assets reach the end of their operating lives.
Moody’s has identified refinancing risks among weaker borrowers with debt maturities falling between 2027 and 2029. Those concerns do not establish that the wider data centre sector faces an immediate financing shortage, but they reinforce the importance of distinguishing individual borrowers’ credit positions.
Construction contractors have a different exposure from the eventual data centre operator. Their immediate financial interests depend on contractual payments, the cost and timing of work, and the ability to complete projects without unexpected disruption.
Skanska reported that substantial construction cost inflation had been passed through to customers without causing a corresponding deterioration in margins. Its improving quarterly profitability suggests that disciplined contract management has remained important alongside the increase in orders.
With a record construction backlog and continued demand from major technology customers, Skanska has a substantial programme of work already secured. Its more selective assessment of newer developers indicates that future contracts will depend not only on the scale of proposed computing capacity, but also on the financial and operational credibility of those commissioning it.
