Positive outlook for Bouygues

By Sandy Guthrie23 November 2016

Profitability is expected to improve for French-based Bouygues’ construction businesses, the group said, starting this year.

Overall results for Bouygues in the first nine months of 2016 showed “a sharp rise”, it said, driven by the good performance of Bouygues Telecom.

It said the order book for its construction businesses remained at a high level of €28.1 billion at the end of September 2016, which was down 3% year-on-year and down 1% at constant exchange rates.

In its home market, Bouygues said a gradual stabilisation of the construction market had been confirmed in the first nine months of the year. The order book at the end of September 2016 stood at €13.1 billion, up 1% year-on-year.

Order intake at Bouygues Construction rose 12% in the first nine months of 2016 compared with the first nine months of 2015, following the signing of a number of major contracts since the start of the year, such as the Port of Calais extension, Tour Alto in La Défense and the renovation of the Louvre Post Office building in central Paris.

After two years of sharp decline, sales in its Colas roads business in mainland France stabilised compared with the first nine months of 2015, it reported.

In international markets, the order book at the end of September 2016 stood at €15 billion, down 3% at constant exchange rates.

The group said that at Bouygues Construction, the order book did not yet include a number of significant contracts, notably in Northern Europe, Asia, the Middle East and Cuba, that it said should be finalised in the next few months. The projects in the pipeline at the end of September 2016 were therefore 28% higher year-on-year, it said.

At Colas, the order book at the end of September 2016 increased 3% – up 6% at constant exchange rates – a figure that Bouygues said was achieved despite delays in launching road and motorway programmes in Central Europe, and a decline in investment in Canada’s oil-producing western provinces.

The group said that international business represented 58% of the order book at Bouygues Construction and Colas.

Sales in the construction businesses reached €18.2 billion in the first nine months of 2016, down 5% year-on-year, it reported. These sales were said to have been negatively hit by a €280 million exchange rate effect. There was also a €239 million scope effect, mostly at Colas thanks to the disposal of storage and bitumen sales activities in Asia to its Thai subsidiary Tasco, in which it has a 32% stake, and to the discontinuation of the refining activity in France.

Like-for-like and at constant exchange rates, sales were said to be down 2%.

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