Vinci Forecasts Stable Margins This Year Amid Record Construction Backlog

Vinci SA, Europe’s biggest builder, reported 2011 profit that met analysts’ estimates and predicted that it will maintain operating margins this year as a record backlog offsets an economic slowdown in Europe.

Net income rose to 1.90 billion euros ($2.52 billion) in 2011 from 1.78 billion euros a year earlier, the company, based in the Paris suburb of Rueil-Malmaison, said in a statement today. Profit was in line with the 1.91 billion-euro average of 13 analyst estimates compiled by Bloomberg.

“With greater uncertainty surrounding prospects for economic growth in Europe, there could be a downturn in orders in some segments and geographical areas during the year,” Vinci said. “Business should be at least flat in 2012,” and the company targets “the maintenance of its operating margins at the good levels achieved in 2011.”

The sovereign-debt crisis confronting countries using the euro may lead to a recession in Europe this year and exacerbate an economic slowdown in emerging markets, according to World Bank estimates.

Vinci’s revenue climbed 11 percent to 37 billion euros in 2011, helped by the acquisitions in 2010 of engineering company Cegelec, facility-management provider Faceo and some quarries from Anglo American Plc’s Tarmac division, as well as by traffic and toll increases at the group’s highways. The backlog rose 18 percent from a year earlier to a record 30.6 billion euros as of Dec. 31.

Net debt fell to 12.6 billion euros at the end of 2011 from 13.1 billion euros a year earlier. The French company plans to raise the dividend to 1.77 euros a share from 1.67 euros a year earlier.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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