Bouygues Reports Surprise 50% Profit Growth in 2006

France's Bouygues said Wednesday its net profit rose a higher-than-expected 50% last year, thanks to strong growth from its construction and road-building divisions, and despite losses in its mobile phone operations.

The building-to-broadcasting conglomerate reported net profit of 1.25 billion euros($1.65 billion), up from 832 million euros in 2005 and above the 1.12 billion euros ($1.48 billion) forecast by analysts.

The company forecast revenue of 28.6 billion euros ($37.84 billion) this year, up 8% from 26.4 billion euros ($34.93 billion) in 2006. Bouygues also said it would propose a 1.20 euros ($1.59) per share dividend for 2006, up 33% from a year earlier.

Paris-based Bouygues, which controls France's No. 3 mobile telecommunications operator and is the largest shareholder in the country's No. 1 television broadcaster, said growth in its traditional construction businesses helped offset declining profits at its mobile telecom and television broadcasting units. That lifted operating profit last year 8% to euro1.88 billion euros ($2.49 billion), a shade below the 1.92 billion euros ($2.54 billion) forecast by analysts.

Bouygues Telecom, the mobile telecoms business, accounts for the largest share of the group's total earnings before interest, tax, depreciation and amortization: 1.23 billion euros ($1.63 billion), down 7% from 1.32 billion euros in 2005. Bouygues blamed the fall on marketing expenses related to the launch of new subscription plans.

Bouygues Construction, the traditional core of the conglomerate founded by current Chairman Martin Bouygues' father in 1952, reported operating profit rose 10% to 262 million ($346.63 million) from 238 euros million in 2005.

Vinci and Eiffage, France's other large construction groups, Tuesday reported strong profit growth last year thanks to acquisitions and a building boom in France.

Bouygues shares have gained around 9% so far this year after a 17.7% rise last year, outperforming a 1.5% increase for France's CAC 40 blue chip index so far this year, but in line with similar gains seen across France's construction and building materials sector.