- Traffic at highway, airports operations higher than expected
- French construction still lacks mid-sized contracts, CEO says
Vinci SA said it’s expecting increased highway revenue growth this year and steady sales at airports after first-half earnings met estimates.
First-half operating income rose 12 percent to 1.72 billion euros ($1.91 billion) from a year earlier, the Rueil-Malmaison, France-based company said in a statement Friday. Net income rose 12 percent to 920 million euros and Europe’s biggest builder kept full-year targets.
"The first half went well and as we had imagined six months ago -- even maybe a bit better when it comes to concession activities," Chief Executive Officer Xavier Huillard told reporters during a press conference in Paris.
Faced with a sluggish economy at home in France, which represented almost 60 percent of Vinci’s revenue last year and where public investment in infrastructure projects remains weak, Vinci is working to increase revenue from other countries. It’s also expanding into faster-growing products and services such as energy-engineering and airport management operations.
The shares dropped 0.8 percent to 66.55 euros at 10:20 a.m. in Paris. The stock has risen 13 percent this year, valuing the company at 40 billion euros.
Revenue from Vinci’s highway concession business should rise slightly this year, the company said. In the longer term, Vinci could benefit from a boost in French investment spending. French President Francois Hollande on Thursday announced new spending on the French highway network, les Echos daily reported. A previous plan was to invest 3.2 billion euros on concessions.
In contrast, building at home remains muted, the company said. "Vinci construction is struggling in France," Huillard said. While the order book in the country jumped 7 percent compared with a year earlier, the size mix is uneven. The CEO said small contracts are steady and large ones rebounded, but the number of medium-sized ones remains low.
The French government said Thursday it has picked a Vinci-led group of companies to acquire a controlling stake in the regional airport of Lyon. Vinci was also part of a group that bid to acquire a controlling stake in France’s No. 3 airport, Nice-Cote d’Azur, which was won by another group of companies. The French builder took control of Portugal’s main airports in 2013 and operates hubs in Japan.