October 18, 2018 / 4:40 PM / a month ago

UPDATE 1-France's Bouygues cuts 2018 profit forecast

* Targets stable or slightly lower current operating profit

* Firm cites challenges at construction businesses

* Outlook for TF1 and Bouygues Telecom unchanged (Adds details from statement, reasons for profit warning)

PARIS, Oct 18 (Reuters) - French conglomerate Bouygues lowered its full year operating profit forecast on Thursday, citing difficulties at its construction businesses.

The family-controlled group, which also owns France’s biggest private TV broadcaster TF1 and mobile phone company Bouygues Telecom, said it was now targeting a stable or a slightly lower current operating profit in 2018 versus 2017.

In August, Bouygues had kept its full year outlook for rising profitability across the group, amid renewed signs of improvement at is telecom division.

Issues in the completion of three energy and services projects at Bouygues Construction and at its Colas arm, however, led to the change in forecast, the company said.

“During its first-half 2018 results presentation, the group highlighted some challenges (...) This situation worsened during the third quarter,” Bouygues said.

The company pointed to glitches at two biomass power plants in the United Kingdom, a new phase of litigation related to a data centre in Ireland and difficulties at its civil engineering arm Colas.

“Given these elements, the current operating profit and the current operating margin at the construction businesses are now expected to decline in 2018, versus the previous forecast of an improvement,” Bouygues said.

The outlook for TF1 and Bouygues Telecom remained unchanged.

Bouygues will publish nine-month results on November 15. (Reporting by Matthias Blamont; Editing by Sarah White)

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