France's Veolia keeps final-quarter target after profit rise

PARIS (Reuters) - French water and waste management group Veolia VIE.PA, which is targeting smaller rival Suez SEVI.PA in a bitter takeover battle, reported higher third-quarter profit on Thursday after a strong rebound in activity and cost savings.

FILE PHOTO: The logo of the Veolia is seen on a van at Chatillon, near Paris, France, August 31, 2020. REUTERS/Charles Platiau

Thursday’s results came as Suez reiterated its opposition to a deal with Veolia and said its board continued to explore all options “in the interest of the company and its stakeholders”.

Veolia also confirmed its goal for its fourth-quarter operating performance to match that of last year despite new lockdown measures in France and across Europe to curb the spread of COVID-19.

The fourth-quarter performance could even exceed that of the previous year, Chairman and CEO Antoine Frerot said.

“Veolia ... has once again demonstrated its capacity to absorb shocks, to recover quickly and strongly and to pursue ambitious plans for the future,” Frerot added.

Turning to 2021, finance chief Claude Laruelle said there was no reason why Veolia would diverge from its underlying performances, with trends comparable to those of 2019.

Like-for-like earnings before interest, tax, depreciation, and amortisation (EBITDA) rose 2.5% to 893 million euros ($1.05 billion) in the third quarter on revenue that was flat at 6.293 billion euros.

Veolia bought an almost 30% stake in Suez last month and said it wanted to buy the rest to create a “world super champion” in waste and water management.

However, Suez has repeatedly rejected Veolia’s advances, describing them as hostile and a risk to jobs, leading the French government to urge Veolia to commit to a negotiated deal.

On Tuesday Veolia turned up the pressure on Suez, saying it would take its offer direct to Suez shareholders if the board continued to reject its overtures.

On Thursday Suez Chairman Philippe Varin, in a letter to Veolia boss Frerot, reiterated the board’s opposition to a deal and said that Veolia’s plan contained “unaceptable conditions and major execution risks”.

Suez also turned down a request by Veolia to deactivate a Dutch-based foundation that Suez had created to house its French water business as part of efforts to fend off the takeover bid.

Reporting by Benjamin Mallet, Dominique Vidalon; Editing by Keith Weir and David Goodman