Vinci: contracting drives revenues, concessions drive profits

Vinci, the world's largest construction company had revenues of € 15,7 billion in the first half of the year. This was a +15% increase on January to June 2007. Its operating profit was up +12% to € 1,46 billion.

The steepest rise in revenue was seen for its Vinci Construction division, with a +24,5% rise to € 7,53 billion. Elsewhere in its contracting activities, Eurovia, its road building arm saw revenues rise +7,6% to € 3,64 billion, while Vinci Energies enjoyed a rise of +12,1% to € 2,22 billion.

Vinci's contracting activities as a whole grew +17,3% to € 13,4 billion in the first half of the year. Both the growth and size of this division was a long way ahead of its concessions operations, where revenues grew +6,4% to € 2,29 billion.

However, Vinci's concessions business is much more profitable than its contracting work. In the first half of the year it returned an operating profit of € 899 million - 62% of the Group total and a +14% increase on the same period in 2007. In contrast the contracting businesses, all of which were profitable, achieved an operating profit of € 548 million, up +15% on 2007.

However, with revenues growing faster than profits in the contracting businesses, the margin for these activities fell from 4,2% in the first half of 2007 to 4,1% in the first half of this year. In contrast the operating margin for the Vinci's concessions activities rose from an already impressive 36,7% last year to 39,3%.

Orders and outlook

Vinci's order book as of the end of July stood at € 213,2 billion, up +8% on the end of 2007. The company said this was equivalent to about 10 months of work. The company is maintaining its outlook of +10% revenue growth for 2008 as a whole.