Vinci shares tumble as builder forecasts 2014 slowdown
By Gilles Guillaume and Natalie Huet
PARIS (Reuters) - Europe's biggest construction and concessions company, Vinci (SGEF.PA: Cotización), warned it expected business to slow down this year because of falling orders in its home market France, sending its shares down more than 8 percent on Friday.
Vinci, which had previously forecast roughly stable full-year revenue, now expects a slight decrease on a like-for-like basis, as it sees projects outside Europe temporarily drying up and prospects in France remain glum.
Reporting first-half results late on Thursday, it announced an exceptional dividend and said it expected a strong increase in consolidated net income in the full year thanks to asset sales including parking business VINCI Park.
Like other builders, Vinci has seen construction slow down since the 2008 financial crisis and has expanded into higher-growth, more profitable concessions such as airports and motorways.
In France, which accounts for 60 percent of Vinci's revenue, the company said public sector orders had further dropped in the second quarter because of municipal elections, while the residential building market was not recovering as expected.
Vinci said a possible slowdown in the second half of the year would be primarily due to a lag between the completion of old large projects and the start of new ones outside Europe.
Analysts said they were caught off guard by a one-third decline in operating income from construction because of delays in Vinci's tramway project in Nottingham in the UK, and by the gloomy outlook in France.
Broker Bryan Garnier lowered its rating on the stock to "neutral" from "buy", saying the group's fundamentals remained positive in the long run but there was weak visibility regarding the short-term outlook. Continuación...