Vinci SA (ALO), Europe’s biggest builder, reported 2013 profit that beat analyst estimates after selling an asset in Belgium, and said margins at its contracting business should start to rebound this year on cost cuts.
Net income rose 2.3 percent to 1.96 billion euros ($2.65 billion), the company, based in Rueil-Malmaison near Paris, said in a statement today. That beat the average estimate of 1.86 billion euros in a Bloomberg survey of 13 analysts. The company offered to pay a dividend of 1.77 euros per share, unchanged from last year.
“In contracting, despite an on-going difficult economic environment in 2014, especially in France, Vinci has good visibility on activity thanks to the high level of its backlog,” the company said in the statement. “The temporary difficult situations encountered in 2013 by certain divisions having been essentially addressed, the group is counting on a slight improvement of the Contracting margin in 2014.”
To counter a slowdown in infrastructure spending in Poland and other central European countries following the completion of projects, Vinci last year bought Portuguese airport operator ANA-Aeroportos de Portugal SA for 3.1 billion euros and raised its stake in Aeroports de Paris to 8 percent. It also bought the stake in French toll road Cofiroute it didn’t already own.
To keep a lid on its debt, which climbed to 14.1 billion euros at the end of 2013 from 12.5 billion euros a year earlier, Vinci sold a stake in Belgian builder Cie. d’Entreprises CFE SA, and has put a majority stake in its parking-lot division up for sale.
The sale of the parking unit should have a positive impact on net income this year, Vinci said. The company expects profitability at its French highways to remain “at a good level” as traffic trends should remain in line with 2013. For the whole group, Vinci predicts stable like-for-like sales in 2014.
Vinci said revenue climbed 4.4 percent in 2013 to 40.3 billion euros, and earnings before interest and taxes was little changed at 3.68 billion euros, matching analysts’ estimates.
Vinci may invest an extra 2 billion euros in its toll roads in exchange for an extension of its concessions, and an agreement on the matter may be reached with the French government this half, the company said.
Orders stood at 29.4 billion euros at the end of 2013, down from 30.1 billion euros a year earlier. That doesn’t include orders for a stadium in Moscow, a road on the French island of La Reunion, and for the Northwest Corridor project in Atlanta.
Vinci shares have risen 0.5 percent this year percent to 47.97 euros in Paris, giving the company a market value of 29 billion euros.
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