UPDATE 2-Builder BAM beats estimates as property woes ease

* H1 revenue 3.662 bln euro (Rtrs poll avg 3.583 bln euro)

* H1 net result 65.8 mln euro (Rtrs pol avg 54 mln euro)

* Sticks to 2011 outlook for net profit level of 120 mln eur

* Shares jump 9.6percent

(Adds CEO, analyst comment, details, shares)

By Greg Roumeliotis

AMSTERDAM, Aug 25 (Reuters) - Royal BAM , the largest construction group in the Netherlands, reported a higher-than-expected rise in first-half profit on Thursday as it stemmed property losses and its civil engineering unit thrived.

Shares in BAM soared 9.6 percent to 3.46 euros by 0730 GMT, the largest gainers in Amsterdam's midcap infex , as investors were positively surprised by the company's stronger earnings in a challenging market for Dutch construction firms.

"The results are much better than anticipated. The infrastructure activities performed almost two times better than expected and they also managed to get a grip on their property operations," Rabobank analyst Michel Aupers said.

BAM has been battling a stagnating housing construction market at home and has tried to compensate by going after major infrastructure projects, often in the form of public-private partnerships (PPPs), where private financing is required.

Shares in smaller Dutch peer Heijmans tumbled more than 7 percent on Wednesday after it missed earnings forecasts because of its property development activities and warned that the housing market would continue to be weak.

But as a result of several transactions with investors, BAM said that by the end of June, its total number of unsold homes, both completed or under construction, had fallen by a third compared with the end of 2010, to 505 from 753.

In a reversal of fortunes, BAM swung from a 20.4 million euro pre-tax property loss in the first half of 2010 to a 1.2 million euro profit in the latest half. The company still expects to sell about 2,200 homes in the Netherlands this year.

"We remain focused on reducing the amount of capital invested, especially in the property sector, as well as on being extremely careful when tendering for new projects and ensuring that all our projects are completed to an excellent standard," BAM Chief Executive Nico de Vries said in a statement.

In the Netherlands, the euro zone's fifth largest economy, seasonally adjusted production in the construction sector rose by just 0.2 percent month-on-month in June, compared with a euro zone average slump of 1.8 percent, according to the latest Eurostat figures.

BAM said there was significant pressure on the Dutch civil engineering market as local authorities cut spending and more foreign competitors bid for large projects, yet it still managed to increase civil engineering revenues and profits, thanks also to contributions from Germany, Britain and Belgium.

BAM's first-half net profit jumped 30 percent to 65.8 million euros while revenue rose 6.8 percent to 3.66 billion euros. Analysts in a Reuters poll expected net profit of 54 million euros on revenue of 3.58 billion euros.

The company reiterated its full-year outlook, saying it expected to achieve a net profit level of 120 million euros in 2011 barring unforeseen circumstances.

The size of its order book fell to 11.4 billion euros from 12.1 billion euros at the end of 2010.

After announcing a PPP joint venture with Dutch pension fund manager PGGM in May, BAM said on Thursday it expected to book about 40 million euros in profits from the sale of projects between 2011 and 2014, 10 million in the second half of 2011.

BAM owns a 21.5 percent stake in dredger Van Oord which it been looking to divest to pay down debt. In its latest statement, the company did not comment on any progress it has made in the sale process. (Editing by Sara Webb)