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French group Vinci keeps outlook as first-half profit rises

French group Vinci keeps outlook as first-half profit rises
FILE PHOTO: The logo of Vinci is pictured during the company's 2017 annual results presentation in Paris, France, February 8, 2018. REUTERS/Philippe Wojazer -
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Philippe Wojazer(Reuters)
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By Dominique Vidalon

PARIS (Reuters) – French construction group Vinci held its forecast for higher annual earnings and revenues on Wednesday, reporting an increase in first-half profits on the back of solid performances at its airports and motorway concessions business.

Vinci <SGEF.PA>, Europe’s biggest construction and concessions company, said weaker business in oil and gas-related activities hurt Vinci Construction’s contracting business margin, but added it would improve this.

“Vinci confirms that it expects further growth in its revenue and net income in 2019,” it said in a statement.

Vinci has been expanding into faster-growing and more profitable concessions such as airports and motorways, as well as engineering projects for the energy industry, to counter weakness elsewhere in the construction sector.

First-half operating profit rose 9.1% to 2.3 billion euros ($2.6 billion), while revenues increased 10% to 21.7 billion.

Operating income from Vinci’s concessions business rose 12.3% in the first-half, driven by a 34.4% jump in the airport segment. Operating income from contracting, which includes Vinci Energies, Eurovia and Vinci Construction declined 1.1%.

The company, which already runs 45 airports, bought a majority stake in Britain’s Gatwick airport in December for 2.9 billion pounds. Gatwick became part of the group in the second quarter of 2019.

Passenger traffic at Vinci Airports rose 6.7% in the first-half to 123.436 million passengers.

Anti-government “yellow vest” protests that targeted toll-booths on Vinci Autoroutes’ network and disrupted business in late 2018 and into the fist month of 2019 before abating, Vinci said.

Motorway traffic levels were stable over the first half, it added.

(Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta and Richard Lough)

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