By Aby Jose Koilparambil
(Reuters) -Balfour Beatty is facing challenges in its U.S. office projects, partly due to a tech downturn in the Northwest as customers downsize and delay investments, the global infrastructure firm’s CEO Leo Quinn said on Wednesday.
Quinn said technology companies in the U.S. were cutting budgets in building commercial offices and have slowed down investments, due to the remote working trend and amid challenging economic conditions.
The London-headquartered firm has a commercial construction-focused portfolio in the U.S., while the UK business comprises national infrastructure projects including highways, onshore transmission and nuclear power stations.
The markets account for about 87% of its overall revenue.
“It (U.S. offices) is fundamentally a market which will probably come back in the next couple of years, but at the moment, it is a little bit in the dark rooms,” Quinn told Reuters.
Balfour Beatty counts Amazon, Microsoft, and Meta among others as its customers in the U.S. tech sector.
“There are a lot of data services and data warehouses in the Northwest, and we have seen a sort of slowdown there,” added Quinn.
The company said a high interest rate environment has caused delays in some projects going to contract, largely in the U.S. commercial office sector, as customers wait for economic stability.
Quinn said the group is looking to expand “very heavily” into power transmission, energy security, carbon capture and nuclear power stations in the UK and Hong Kong markets, and into schools and airports segments in the U.S. business.
The FTSE 250 firm posted a 12% jump in underlying profit from operations from its earnings-based businesses at 95 million pounds ($121 million) for the half year ended June 30, and forecast annual profits broadly in line with year-ago figures.
($1 = 0.7854 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Varun H K)