Vinci keeps 2017 goals after robust results

PARIS: French construction group Vinci on Friday maintained its forecasts for higher annual earnings after strong momentum at its airports and motorway concessions business and a recovering construction market lifted its first half results.

In France, building activities benefited from a buoyant property sector, while Vinci also won its first contracts under the Grand Paris Express, a large-scale infrastructure expansion plan for the French capital.

"Based on this good start to the year, and given the improving economic environment, Vinci is confirming its forecast for higher revenue and earnings in 2017," CEO Xavier Huillard said in a statement.

Europe´s biggest construction and concessions company said first-half operating profit rose 9.5 percent to 1.883 billion euros ($2.20 billion).

Revenues also rose a reported 5.1 percent to 18.513 billion euros. On a like-for-like basis revenue rose 3.6 percent.

This compared with respective forecasts of 1.874 billion euros for operating profit, and revenue of 18.410 billion euros based on an Inquiry Financial poll for Reuters.

To counter the slump in French construction, Vinci has expanded into faster growing and more profitable concessions such as airports notably abroad and in motorways as well as in energy engineering.

The construction business - the biggest contributor to group revenue - achieved sales growth of 1.9 percent like-for-like in the first half. Meanwhile revenue from the concessions business rose 5.7 percent like for like driven by a 14 percent jump in the airport segment.

On a reported basis, which includes acquisitions, revenue from airports concessions rose 46 percent. The main acquisitions affecting airports revenue were Vinci Airports acquisition of Aerodrom in the Dominican Republic and Aeroports de Lyon in France.

Vinci, which operates about half of France´s motorway concessions, said motorway traffic grew 2.2 percent, while its airport traffic grew 12.8 percent in the first-half, with very brisk activity in Portugal and Cambodia.

Looking forward, Vinci said it expected its motorway revenue to grow in 2017 but to a lesser extent than in 2016 due to a high comparison basis. Its airport revenue was expected to grow by more than 25 percent in 2017 and will include the full impact of acquisitions made in 2016.