PR Newswire/Les Echos/
Boulogne, August 31, 2010
PRESS RELEASE
First Half-Year 2010
Catching up on 1st quarter activity
Lower profitability compared to end of June 2009
The Board of Directors of Colas, chaired by Mr. Hervé Le Bouc, met on August
30, 2010 to examine the half-year statement of accounts as of June 30, 2010 and
outlook for the current year.
Consolidated key figures
In millions of euros 1st half-year 1st half-year Variation Reference
2009 2010 1st half-year full year
2009
Consolidated revenue 5,116 5,002 -2.2 % 11,581
Operating profits 75 -47 -122 MEUR 541
Consolidated net profits
(Group share) 58 -29 -87 MEUR 387
A good portion of late 1st quarter activity is offset during 2nd quarter:
As of June 30, 2010, the Colas Group posted consolidated revenue totaling 5.002
billion euros, compared to 5.116 billion euros at the end of June 2009, i.e., a
2.2% decrease (-3.3% with identical exchange rates and scope of business).
Business during the 2nd quarter 2010 helped catch up on a good portion of late
1st quarter activity (-7%), due in particular to work postponed because of
unfavorable weather conditions.
France:
At the end of June 2010, revenue totaled 3.06 billion euros, down 2.7%
compared to the end of June 2009.
In Mainland France, the road business has receded slightly (-1.6%), along
with business in special activities (-1.2%). The level of private investment is
still low. Investments by local authorities remain high, but the geographic
spread of the funding is very uneven.
In the French Overseas Departments, revenue is down 20%. The public works
market has continued to drop in the Caribbean and on Reunion Island, where the
downward trend has been worsened by the fact that the Tram Train project was
shelved.
International:
At the end of June 2010, revenue in the Group's international units and
French Overseas Territories totaled 1.94 billion euros, down 1.4% compared to
June 30, 2009 (-4.2% with identical exchange rates and scope of business).
North America recorded revenue of 675 million euros (+4.6% and -2.6% with
identical exchange rates and scope of business). In the United States, the
market remains upbeat thanks to federal infrastructure projects launched last
year. In Canada, business is on the rise.
In Europe, revenue totaled 812 million euros, down 5.1%. Business at Colas
companies in northern Europe is up 28%. On the other hand, revenue in central
Europe dropped 33%, notably in Croatia, Romania and Slovakia, where the
government has just decided to abandon the PPP contract for Highway D1 after
12 months of successive postponements.
Throughout the rest of the world, revenue figures totaling 455 million
euros are similar to those posted at the end of June 2009 (-3%) with a drop
in the Indian Ocean (Madagascar) and recovery in Asia.
By business sector:
A breakdown of the 5-billion euro revenue figures shows the following:
- Roads: EUR 3.77 billion (-3%)
- Civil engineering, Pipes and mains: EUR 358 million (+6%) -
Waterproofing: EUR 279 million (-4%)
- Railways: EUR 263 million (+2%)
- Building and deconstruction: EUR 180 million (=)
- Safety and Signaling: EUR 151 million (-3%)
Profitability is lower:
Operating profits are down at -47 million euros, compared to +75 million euros
at the end of June 2009, due to:
- further decline in central Europe, where operating profits totaled -57
million euros,
- harsh competition, especially in Mainland France, which has led to
battered profit margins,
- a lack of major projects (abandoning of contracts for Tram Train in
Reunion Island and Highway D1 in Slovakia, political crisis in
Madagascar),
- poor weather conditions during the first quarter.
Net profit (Group share) amounted to -29 million euros, compared to
+58 million euros at the end of June 2009.
Outlook:
Work-on-hand at the end of June 2010 was stable compared to the end of
June 2009, at 7.2 billion euros (+4% in France and -4% for international
units).
In Mainland France, business could drop slightly. With no major projects
in view, business has receded in the French Overseas Departments. Colas
companies in North America should post good figures which remain comparable
to 2009. In northern Europe, business could enjoy a slight rise. For central
Europe, a deep, long-lasting recession will result in a sharp drop in revenue
and restructuring. The Indian Ocean has returned to a plateau of recurrent
business, in light of the lack of major projects. In Asia, the outlook is
bright for the manufacturing and sales of road products. A targeted
acquisition policy led to the purchase of S.R.D. (a bitumen production unit in
Dunkirk, France) on June 30, 2010, and to that of two American road companies
at the end of July, with annual revenue of 120 million dollars acquired to
reinforce the Group's territorial network, notably in Georgia.
In an environment where visibility remains low, the 11.5-billion euro
hypothesis for revenue in 2010 posted in February remains unchanged. Rapidly
shrinking profit margins, especially in France, and the extent of losses in
central Europe will lead to a noticeable decrease in Colas' profitability for
2010. The Group share of net profit at the end of 2010 could drop to roughly 2%
of revenue. In the wake of measures taken in 2009, reinforced action plans have
been launched, in particular in central Europe and France. After hitting what
could be a low point, efforts made in each profit center to adapt to their own
market should pave the way to a return to improved profitability in 2011.
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