February 6, 2019 / 7:43 AM / in 3 months

French group Vinci confident on 2019 despite 'yellow vests' protests

PARIS (Reuters) - Vinci handed investors a 9 percent dividend hike and struck a confident note over its prospects for 2019 despite anti-government “yellow vests” protests that hit traffic on its French motorways in the final quarter of 2018.

The logo of Vinci is pictured during the company's 2017 annual results presentation in Paris, France, February 8, 2018. REUTERS/Philippe Wojazer

Vinci, which is Europe’s biggest construction and concessions group, predicted a further rise in net profit and revenue after posting 2018 earnings that were largely in line with forecasts.

Chief Executive Xavier Huillard said the 2018 performance reflected “the strength of the concessions-construction model both in France and abroad”

“The group is confident moving into 2019, and is projecting further growth in its revenue and net income,” he added.

Net income rose 8.6 percent to 2.983 billion euros ($3.40 billion) in 2018, while operating profit grew 8.5 percent to 4.997 billion. Revenues rose 8.1 percent to 43.519 billion.

This compared with analyst expectations for 2.981 billion euros in net income, 4.950 billion in operating profit and 43.114 billion in revenue, in an Infront Data poll for Reuters.

Vinci also raised its dividend to 2.67 euros from 2.45 in 2017.

The company said its construction business, the biggest contributor to group revenue, had a 1.9 percent rise in revenue last year, while sales at its concessions arm rose 4.6 percent.

Vinci has been expanding into faster-growing and more profitable concessions such as airports and motorways, as well as in energy engineering.

Vinci, which already runs 45 airports in 12 countries, bought a majority stake in Britain’s Gatwick airport in December for 2.9 billion pounds. Gatwick will become part of the group in the second quarter of 2019.

Passenger numbers across all airports managed by the group rose 6.8 percent to over 195 million.

Vinci, which operates about half of France’s motorway concessions, said motorway traffic nevertheless declined 0.5 percent in 2018 as result of the French protests, which have regularly seen demonstrators block roads.

Last month Vinci had already flagged that the anti-government protests would put a brake on its motorway traffic growth..

The disruptions led to a 8.9 percent fall in traffic in the fourth quarter. For 2019, Vinci said it expected traffic levels on its highway network “to track the economic activity in France, barring any exceptional items”.

The “yellow vests” — named after the fluorescent jackets French motorists must have in their cars — have blocked roads and roundabouts since the middle of November, sometimes occupying highway toll booths and setting a number on fire.

Vinci shares have risen around 7 percent so far this year, having lost 15.4 percent last year.

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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