Vinci reports flat 2012 profits, cautious on outlook

6th February 2013, Comments 0 comments

French construction, motorway and car park group Vinci reported flat net profits for 2012 on Wednesday but warned that motorway toll traffic might fall further.

The cautious outlook pushed down the price of shares in the group by 2.53 percent to 35.69 euros in morning trading.

The group, which is expanding in airport management, reported a 0.7-percent rise in net profit to 1.917 billion euros ($2.6 billion). Sales rose by 4.5 percent to 38.634 billion euros.

These two figures were about in line with expectations of analysts polled by Bloomberg financial information agency.

The group said that this year it would focus more on its profit margins than on the volume of business, saying it did not rule out a fall of motorway toll traffic this year similar to the fall of 1.7 percent last year.

The group said that overall it expected activity this year to be steady in relation to activity last year, excluding management of Portuguese airport company Ana and any acquisitions.

It also warned that the rate of new orders booked might also slow down.

Chief executive Xavier Huillard said that in 2013 "the economic environment was likely to remain difficult, notably in Europe."

The construction arm of the business began the year with a big order book totalling 31.3 billion euros, marking an increase of 2.7 percent from the figure at the end of 2011.

This concerned orders abroad, and also in France with work on construction of a high-speed railway line between Tours in central France and Bordeaux in the south west.

At the end of December, Vinci won bidding for the privatisation of 10 Portuguese airports, boosting its strategy to develop internationally its airport management arm. Until then its only foreign presence in airport management was in Cambodia. Now, including airports in France, it manages 23 facilities.

On January 4, Vinci had revised up its outlook for net profit in 2012 after the lifting of uncertainty about the tax charge, and said it expected the net result to be similar to that in 2011.

In October the company had said that the annual result, which it had previously expected to be steady, might fall by 3.0-4.0 percent because of a possible increase in its charges, but publication of details of the French national budget for 2013 removed this concern and the group reverted to its initial outlook.

At Deutsche Bank, analysts said that overall the results contained no surprises but that investors would be worried that in the fourth quarter the volume of orders taken was down by 18.0 percent from the figure 12 months earlier.

"This figure is certainly volatile but it comes in the context of the scarcely encouraging comments by the management about 2013 and is likely to be badly received on the market."

Analysts at Societe Generale bank noted that the management was cautious about the outlook but also said that they liked Vinci shares because the company had room to do better after its dull performance in 2012.

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© 2013 AFP

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