Bouygues construction order book up
By Sandy Guthrie26 February 2014
The construction division of French multinational Bouygues has reported an order book which was up 3% at the end of 2013 over 12 months earlier, at €27.5 billion.
The group reported that over three years, the order book for construction had grown by 22%.
For the construction to telecoms group’s overall full-year results, it said that operating performances in 2013 were in line with its objectives.
The Bouygues group reported sales of €33.3 billion – down 1% on the previous year but said to be stable on a like-for-like basis and at constant exchange rates.
Current operating profit rose 5% over 2012 to €1.34 billion. It said that in keeping with the second and third quarters, profitability improved sharply in all sectors of activity in the fourth quarter.
Operating profit, at €1.25 billion, included non-current charges of €91 million related to the transformation plan at Bouygues Telecom and the reorganisation of its roadbuilding subsidiary Colas’ roads activity in mainland France.
Group net profit was 2% higher at €647 million before a write-down of Alstom. An accounting write-down of €1.4 billion against Bouygues’ investment in Alstom – which is in power generation and transport – was recognised in the fourth quarter of 2013, resulting in a net loss attributable to the Group of €757 million. Bouygues said the write-down had no impact on the Group’s financial structure, “which remains very sound”.
It said the construction businesses achieved an excellent commercial performance and improved their financial results. Bouygues said this achievement underlined the Group’s competitiveness, driven by recognised know-how, notably in value-added projects, and a strong and selective international presence.
It added that 50% of the order books at Bouygues Construction and Colas would be executed in international markets.
The construction businesses’ consolidated sales rose 2% over 2012 to €26.3 billion. Current operating profit rose 9% and the current operating margin improved 0.2 points to 3.9%.
The Bouygues Construction business recorded order intake of €11.8 billion, including contracts for the Tuen Mun-Chek Lap Kok tunnel in Hong Kong, the L2 bypass in Marseille, and Zagreb Airport in Croatia.
The order book rose by 4% compared to the end of December 2012, up to €17.8 billion at the end of December 2013. It said €8.9 billion in sales had been secured for 2014 with the same from 2015.
Bouygues claimed the “very good execution of ongoing projects and the completion of major large-scale contracts” enabled Bouygues Construction to report a 20% increase in current operating profit versus 2012 to €435 million, giving a current operating margin of 3.9%.
At Colas, the order book at the end of December 2013 stood at a high level of €7.1 billion – up 6% year-on-year. Bouygues said this reflected strong momentum in international markets and the signing of several large contracts in the railways and roads activities.
It said successes included the Tangier-Kenitra high-speed rail link in Morocco, the Santiago metro in Chile, and a roads maintenance contract in London, UK.
Bouygues added that the subsidiary's order book had yet to include a €318 million contract for an elevated section of the New Coastal Road on Reunion Island.
Current operating profit at Colas amounted to €417 million, up 3% on 2012, giving a current operating margin of 3.2%.
Bouygues said that good profitability in the roads activity in France, “which benefited from the positive impact of the new organisation”, and the improvement in the railways and pipelines activities helped offset the current loss of €46 million incurred at the sales of refined oil products activity, as well as the decline in profitability in North America.
The Group said that events after the 2013 reporting period included Colas selling its 16.67% stake in Cofiroute to Vinci Autoroutes on 31 January, 2014. Bouygues said it would recognise a capital gain of around €240 million after tax in 2014.
Group sales in 2014 are expected to be close to the 2013 level. It said, “The construction businesses enjoy major strengths – strong momentum in international markets, good visibility thanks to their order book, a wide range of business activities and expertise and great capacity to adapt.
“The financial results of the construction businesses should therefore remain robust in 2014.”