(Adds detail, co-CEO comments)
PARIS, July 31 (Reuters) - Outdoor advertising and street furniture group JCDecaux forecast slower organic sales growth in the third quarter because of “geo-political tensions” such as the Ukraine crisis and said a problem with illegal Russian billboards hit its first-half result.
The company, majority-owned by the Decaux family and which competes with Clear Channel Outdoor and CBS Outdoor , posted an organic rise of 4 percent in first-half revenue to 1.3 billion euros ($1.74 billion).
Adjusted earnings before interest and tax fell 6 percent to 131.1 million euros, weighed down by a delay in removing thousands of illegal billboards in Moscow. This excluded a 4.5 million impairment charge relating to the situation in Ukraine.
JCDecaux said the removal of the illegal billboards was now finished and added: “We expect occupancy rates to improve in the second half.”
“Both the strong decline in profitability of our Russian billboard business, and the increased rent and fees from new projects where revenues are still ramping up, had a negative impact on our overall results,” co-Chief Executive Jean-Charles Decaux said.
“Bearing in mind the limited visibility, the continued volatility in most markets, and some geo-political tensions, we currently anticipate Q3 organic growth to be slightly below H1 level.”
JCDecaux’s second-quarter organic growth reached a higher-than-expected 5.3 percent, with analysts on average seeing a figure of around 4 percent, according to a consensus cited by Nomura. The company had said it would outpace the 2.3 percent achieved in the first three months of the year.
The group’s adjusted free cash flow of 101.3 million in the first half marked a rise of 62.9 percent, JCDecaux added.
JCDecaux has suffered in recent months from its exposure to Europe where it earns more than 60 percent of revenue.
The shares, which have lost about 20 percent in the last six months, fell more than 7 percent to a near 11-month low on Thursday, making them the worst performers in the broad French SBF 120 index and giving JCDecaux a market value of 5.7 billion euros.
1 US dollar = 0.7465 euro Reporting by Mark John and James Regan; Editing by Andrew Callus