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UPDATE 2-Bouygues lifts 2012 sales goal on buoyant construction
November 14, 2012 / 6:51 PM / 5 years ago

UPDATE 2-Bouygues lifts 2012 sales goal on buoyant construction

* Q3 net profit slides 29 pct to 286 mln euros

* CFO sees no deterioration for construction order intake

* Telecom unit plans capital hike by year end (Adds details from analyst call)

PARIS, Nov 14 (Reuters) - French construction-to-media group Bouygues on Wednesday raised its 2012 sales target as a buoyant construction business in the quarter offset sliding profits and sales at its competition-hit telecom unit.

The group expects to generate sales of 33.8 billion euros ($43 billion) this year, or 2 percent higher than 2011, compared with a previous forecast of 33.2 billion.

Chief Financial Officer Philippe Marien told reporters that order intake for the construction business, excluding residential real estate in France, is holding up despite the economic downturn in Europe.

“As far as construction, infrastructure and road building are concerned we cannot say that today we see actual signs of deterioration,” Marien told reporters.

The order book for these activities stood at 26.9 billion at the end of September, 10 percent higher than in the same period in 2011.

The telecom unit, which has been struggling since the arrival of Iliad’s low-cost mobile operator Free, continued to see sales shrink, but was able to add 124,000 new mobile contract customers in the quarter.

The unit is on track to achieve earnings before interest, taxation, depreciation and amortisation (EBITDA) of 900 million in the full year, Bouygues said.

Bouygues Telecom has responded to Free’s competition by further cutting the price of its low cost offer B&You.

Its chief executive, Eric Haentjens, told analysts that the unit plans to finalise a capital increase by year end to offset the 900 million euro costs of securing a fourth-generation mobile licence last year.

Net profit in the quarter ended Sept. 30 fell 29 percent to 286 million euros ($364 million), reflecting tough competition in France for Bouygues Telecom.

Sales in the period rose 7 percent, as the construction business overall continued to grow in France and international markets.

Shares in Bouygues, which have lost around 27 percent of their value since January, closed at 17.81 euros before the release of the results. ($1=0.7856 euros) (Reporting by Elena Berton; Additional reporting by Gilles Guillaume; Editing by James Regan, Mike Nesbit and Carol Bishopric)

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