Bouygues jumps, Colas creeps

While French-based industrial group Bougyues has reported a sharp jump in profitability for the first half of 2017, its road and rail subsidiary Colas had little to do with it.

Group profitability for Bouygues increased by €179 million, from €206 million in the first half of 2016 to €385 million in the first half of this year. Current operating margin was up by 1.1 points year-on-year.

Sales were also up, from €14.67 billion in the first half of 2016 to €15.16 billion in the same period of 2017, representing a 3% rise.

The backlog for the group’s construction businesses reached a record level, standing at €31.2 billion at the end of June 2017, up 5% year-on-year – or 6% at constant exchange rates.

This was said to have come as a result of three major contracts worth a total of €1.1 billion that were awarded to the group in the first six months of the year, for the Grand Paris Express rapid transport projects.

Based on these financial results, Bouygues confirmed its target of improved group profitability in 2017, and it expects the current operating margin in the construction businesses to continue to improve.

For its subsidiary Colas, the highly seasonal nature of the majority of its businesses led to less impressive results.

However, the company’s order backlog was up 1% – or 2% at constant exchange rates – on the backlog in the first half of the previous year, standing at €8.1 billion at the end of June 2017. For mainland France, the order backlog grew by 9%.

Revenue also increased by 7% on the previous year, to €5 billion in the first half of 2017. This was split equally between its activity within France and its international activities.

Colas’ current operating profit was down €51 million, from a loss of €85 million at the end of June 2016 to a loss of €136 million at the end of June this year. The fall was attributed mainly to delayed projects in North America, the still-limited impact on profit of the rapid relaunch of projects in Central Europe, and a more challenging French railways market for Colas Rail.

For the company’s roads businesses, revenue came to €4 billion, to which all the regional subsidiaries were said to have contributed. Colas said this reflected the market’s recovery after a three-year decline. In Europe as a whole, revenue increased by 17% at constant exchange rates. But there was a divide, with Northern Europe increasing by 9% and Central Europe rising by 34%, which was said to be related to the relaunch of road projects funded by the European Union.

Colas said it expected revenue at constant scope and exchange rates to grow slightly in 2017, compared to 2016.