Veolia Environnement SA (VIE), Europe’s biggest water company, reported a 1.5 percent slump in profit, and said it’s raising a cost-cutting target.
Adjusted operating income fell to 405 million euros ($529.4 million) in the first quarter from a restated 411.1 million euros a year earlier, the Paris-based company said today in a statement.
Chief Executive Officer Antoine Frerot is seeking to turn the utility around by lowering debt and improving profitability on contracts. He has pledged to increase Veolia’s reliance on industrial contracts, shrink its global footprint and focus on “high growth” economies like China and the Middle East.
Veolia raised its goal for cost cuts to 750 million euros by 2015 from a previous 470 million euros, according to today’s statement. It reiterated asset sales of 6 billion euros for the 2012 to 2013 period, and said it would pay a dividend of 70 centimes a share for each of the two years.
Net financial debt totaled 10.1 billion euros at the end of March, down from a restated 10.8 billion euros at the end of 2012. Veolia has said it sees net borrowing at no more than 9 billion euros by year-end.
Veolia in March announced the sale of its water and wastewater business in Portugal to Beijing Enterprises Water Group Ltd. (371) for 95 million euros. The utility plans to sell small and mid-sized assets in 2013, Chief Financial Officer Pierre- Francois Riolacci said in February.
Former CEO Henri Proglio’s expansion spree, begun in 2006, took the company to 77 nations. The utility, which now plans to narrow its reach to about 40 countries, reduced the number to 48 by the end of last year.
To contact the reporter on this story: Tara Patel in Paris at email@example.com