Bouygues First-Half Operating Profit 22% Higher


Strong telecoms and road unit sales helped Bouygues to a 22% rise in first-half operating profit on Friday, beating expectations.

The telecoms asnd construction group also slightly raised its target for 2007 sales to 29 billion euros ($39.48 billion) from 28.8 billion previously, to reflect higher predictions for its construction operations, Colas road unit and telecoms businesses.

Bouygues shares gained just 0.49% at 57.38 euros, having climbed 3.72% on Thursday.

"The results are above expectations, notably thanks to Colas but this had already been factored in," one analyst said.

On Thursday Deutsche Bank had raised its rating on Bouygues to "buy" from "neutral" after Colas posted late on Wednesday better-than-expected earnings.

Operating profit rose to 1.055 billion euros from 862 million euros, while net profit rose 16 percent to 655 million euros. Excluding profit from divested and held-for-sale companies in the first half 2006, net profit from continuing operations rose by 45%.

A Reuters poll of eight analysts gave average forecasts for operating profit of 973 million euros and net profit of 573 million euros.

Revenue rose an already reported 10% to 13.298 billion euros.

The contribution of Bouygues Construction to operating profit declined by 2 million euros because several major projects were in the start-up phase, which is a less favorable period for earnings recognition, the statement said. 

The contribution to operating profit of property unit Bouygues Immobilier dropped by 8 million euros due to unfavourable comparisons, but that of the Colas unit rose by 62 million euros.

The results of Bouygues Immobilier were not representative of full-year trends and the profit target for 2007 is up from 2006, the group said.

The contribution of French broadcaster TF1 to operating profit also rose by 55 million euros and that of Bouygues Telecom by 142 million euros, helped by sales growth, lower marketing expenses and non-recurring items.

Bouygues also announced it would carry out at the end of the year a capital increase reserved for employees for up to 300 million euros.

In order to reduce dilution, shares up to the amount of the capital increase will be repurchased on the market and cancelled, it said.