PARIS -(Dow Jones)- Building-to-broadcasting conglomerate Bouygues Wednesday reported a 10% rise in 2007 net profit and said it expects revenue growth of 9% in the current year, but some investors were disappointed by its telecommunications performance.
Net profit rose to EUR1.38 billion from EUR1.25 billion in 2006, on buoyant construction and road building activities. The figure fell slightly below the EUR1.40 billion that analysts had penciled in.
"Bouygues's 2007 results are slightly disappointing. The construction-related businesses posted a good performance but Bouygues Telecom's profitability was affected by the group's agressive policy of increasing its customers base," a Paris-based trader said.
At 0815GMT, Bouygues shares were down 4.2% or EUR2.12 to EUR48.74. The stock has fallen 8% over the past 12 months, notably on worries that the suprime mortgage crisis might affect its construction activities.
Bouygues plans to up its annual dividend by 25% to EUR1.50.
Engineering firm Alstom, of which Bouygues owns 30.07%, contributed EUR187 million to the group's net profit, Bouygues said.
It didn't break out fourth-quarter figures, but a Dow Jones Newswires calculation shows net profit fell 18% to EUR270 million from EUR331 million a year earlier.
Bouygues' operating profit grew 15% to EUR2.18 billion in 2007, while full-year sales, which the group reported two weeks ago, jumped 12% to EUR29.61 billion. Bouygues said it expects 2008 sales to rise 9% to EUR32.3 billion.
The group's construction-related businesses reported sharp increases in operating profit: 20% at Bouygues Construction, 19% at Bouygues Immobilier and 20% at road-building unit Colas. Order intakes at all three also grew strongly, and Bouygues said 2008 sales should rise 40% at Immobilier, 10% at Construction and 7% at Colas.
Operating profit at Bouygues Telecom, France's third-largest mobile-phone operator behind France Telecom's Orange and Vivendi's SFR, grew 26% to EUR746 million, helped by unlimited call plans.
As of Dec. 31, Bouygues Telecom had 9.26 million customers, an increase of over 6% on the previous year, giving the group confidence to forecast revenue growth of 4% in 2008. Bouygues Telecom is seen by analysts as vulnerable to the entry of a fourth mobile-phone operator in France as the government is expected to reopen the bidding process for another mobile license.
France's leading television broadcaster, Television Francaise 1 SA, of which Bouygues owns 42.9%, last week reported 1.5% growth in 2007 operating profit, below analysts' expectations. The French government is considering dropping ownership restrictions on the country's terrestrial broadcasters, meaning Bouygues would be able to tighten its grip on TF1. The government is also planning to ban advertising on state-owned television, guaranteeing TV advertising revenue for private channels.
- By Laetitia Bachelot-Fontaine, Dow Jones Newswires; +33 (0)1 40 17 17 40;
laetitia.bachelot-fontaine@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 27th February 2008
Posted to: www.cellular-news.com/story/29561.php