* H1 operating profit up 7.3 pct to 556 mln euros
* Still expects slight rise in 2014 sales, higher profits
* CEO says likely to propose dividend hike if 2014 goals met
(Adds details and CEO comments)
By Dominique Vidalon
PARIS, Aug 27 French construction and
concessions company Eiffage confirmed its full-year
forecasts on Wednesday for higher earnings and slight revenue
growth despite a difficult economic climate in France.
The country's third-largest builder behind Vinci
and Bouygues said that with an order book of 12.3
billion euros at end-June representing nearly 12.4 months of
activity, it expected "another improvement" in operating profit
and net profit along with a decrease in net debt in 2014.
"There is a sustained pipeline of projects that looks
solid," said Chief Executive Pierre Berger, citing in particular
the signing of a contract to overhaul the fleet of nuclear power
stations of EDF in France.
Berger told analysts that were Eiffage to deliver on its
2014 financial goals, he would propose raising the dividend and
keeping it at that level for several years.
Eiffage, which built France's Millau Viaduct and the Sydney
Opera House, generates roughly 85 percent of revenue from
contracting operations - which include construction and public
works - and the rest from concessions, mainly motorways but also
prisons and hospitals.
First-half operating profit from ordinary activities rose
7.3 percent to 556 million euros (734 million) as cost control
helped offset weaker sales, hit notably by a previously reported
drop in public works in the second quarter.
The company's operating margin reached 8.5 percent, compared
with 7.9 percent a year ago.
Revenue from public works such as road building fell 6.5
percent in the second quarter, affected by municipal elections
in France in March and public holidays in May.
Berger said the worst was now over for the sector, however.
His comments contrasted with those of Europe's biggest
construction and concessions company, Vinci, which said earlier
this month it expected business to slow down this year because
of falling orders in its home market of France.
Builders such as Vinci and Eiffage have seen construction
slow down since the 2008 financial crisis and have expanded into
higher-growth, more profitable concessions such as airports and
Eiffage's net debt, inherited mainly from the privatisation
of French toll roads in 2006, fell to 12.6 billion euros by
end-June from 13.2 billion a year earlier.
Berger said Eiffage expected to have feedback from Brussels
on a 3.6 billion euro French motorway plan at the end of
"A new dossier was submitted on Aug. 21. Brussels has two
months to react. We think that if the dossiers have been
fine-tuned and re-submitted, this time it's right," he said.
Eiffage, Vinci and Abertis unit SANEF agreed with
the French government last year to bear the cost of upgrades to
the country's motorways in exchange for an average three-year
extension of their concessions. The plan was initially submitted
to EU competition watchdogs in May.
The plan is a much-awaited boost to France's builders, which
have been hit hard by deficit-reduction measures.
(1 US dollar = 0.7578 euro)
(Editing by James Regan)