PARIS: Bouygues surprised investors with its first dividend increase since 2008 as growth in its main construction, media and telecoms businesses helped it to deliver forecast-beating annual profit.
The family-controlled group also predicted another increase in earnings for 2018, helping to push its shares 1.8 percent higher in early trade.
The telecoms business, France’s third-biggest mobile operator which Bouygues failed to merge with market leader Orange in 2016, enjoyed profitable growth with a free cash flow target of €300 million ($368 million) in 2019.
Bouygues, which also builds roads and owns France’s biggest private TV company TF1, said 2017 current operating profits rose to €1.420 billion from €1.121 billion in 2016.
Sales rose 4 percent to 32.904 billion euros last year, while Bouygues also increased its dividend to €1.70 per-share from 1.60 euros last year.
Analysts polled by Inquiry Financial for Reuters predicted operating profits of €1.405 billion on sales of €32.450 billion.
Analysts at Jefferies said its results showed “positive momentum,” and they kept a “buy” rating on the stock.
Bouygues’ construction arm, which makes the bulk of group sales, had a record backlog at the end of December of €31.9 billion, benefiting from major infrastructure projects in France such as the “Grand Paris” expansion plan for the capital.
The company’s telecoms division also performed well, beating targets regarding its profit margins.
France’s telecoms sector, hit by a price war following the entrance of low-cost player Iliad in 2012, has been the subject of takeover speculation in recent years.
But Bouygues Telecom has said it can prosper on its own and has responded with a turnaround plan including job cuts and a focus on the rollout of its 4G network and fixed-line broadband, helping it win new customers.
On Wednesday, Orange said growth in annual sales helped to lift its operating earnings and convince management to increase the annual dividend for 2018 by five cents. Orange boss Stephane Richard has ruled out the possibility that Orange could lead a potential new round of talks between French telecom operators, with a view to cutting the number of players from four to three.
The family-controlled group also predicted another increase in earnings for 2018, helping to push its shares 1.8 percent higher in early trade.
The telecoms business, France’s third-biggest mobile operator which Bouygues failed to merge with market leader Orange in 2016, enjoyed profitable growth with a free cash flow target of €300 million ($368 million) in 2019.
Bouygues, which also builds roads and owns France’s biggest private TV company TF1, said 2017 current operating profits rose to €1.420 billion from €1.121 billion in 2016.
Sales rose 4 percent to 32.904 billion euros last year, while Bouygues also increased its dividend to €1.70 per-share from 1.60 euros last year.
Analysts polled by Inquiry Financial for Reuters predicted operating profits of €1.405 billion on sales of €32.450 billion.
Analysts at Jefferies said its results showed “positive momentum,” and they kept a “buy” rating on the stock.
Bouygues’ construction arm, which makes the bulk of group sales, had a record backlog at the end of December of €31.9 billion, benefiting from major infrastructure projects in France such as the “Grand Paris” expansion plan for the capital.
The company’s telecoms division also performed well, beating targets regarding its profit margins.
France’s telecoms sector, hit by a price war following the entrance of low-cost player Iliad in 2012, has been the subject of takeover speculation in recent years.
But Bouygues Telecom has said it can prosper on its own and has responded with a turnaround plan including job cuts and a focus on the rollout of its 4G network and fixed-line broadband, helping it win new customers.
On Wednesday, Orange said growth in annual sales helped to lift its operating earnings and convince management to increase the annual dividend for 2018 by five cents. Orange boss Stephane Richard has ruled out the possibility that Orange could lead a potential new round of talks between French telecom operators, with a view to cutting the number of players from four to three.
