Bouygues raises telecoms division target after beating expectations

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A Bouygues logo is seen in its exhibition space, during the Viva Technology conference dedicated to innovation and startups at the Porte de Versailles exhibition center in Paris, France June 15, 2022. REUTERS/Benoit Tessier

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Aug 2 (Reuters) – French conglomerate Bouygues (BOUY.PA) reported better-than-expected first-half core earnings on Tuesday and raised full-year targets for its telecoms division.

The construction, telecoms and media group posted current operating income – operating income excluding exceptional costs mainly related to mergers and acquisitions activity – of 492 million euros (505 million dollars) for the six months to June 30th. This beat a median forecast of €409m. in an analyst poll compiled by the company.

The group now expects Bouygues Telecom’s earnings before interest, tax, depreciation and amortization (EBITDA) after rents to grow by more than 8% in 2022, whereas it previously forecast growth of around 7%.

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Bouygues Telecom also changed its growth target from 5% in services revenue to more than 5% growth in revenue billed to customers, which it says is “more representative of its performance”.

Turnover from construction and services, which represents 74% of Bouygues’ turnover, increased by 7% to 13.72 billion euros, mainly driven by its subsidiary Colas (COLP.PA).

Colas achieved a turnover of 6.52 billion euros over the period but its current operating profit is down 60% over one year to a loss of 160 million euros.

Bouygues’ net income (group share) came to 147 million euros, including costs related to a proposed merger between its TV branch TF1 (TFFP.PA) and its competitor M6 (MMTP.PA) and the acquisition of energy services group Equans.

That was down 64% from the first six months of last year, when net profit was boosted by the sale of several data centers and shares in rail maker Alstom (ALSO.PA).

In the second half of the year, Bouygues expects an additional 45 million euros in M&A-related costs, CEO Olivier Roussat told reporters.

TF1 and Bouygues said last week that the French competition authority was concerned about the proposed merger of TF1 and M6. Read more

On Equans, the company awaits the decision of the British competition authority, which indicated on Tuesday that it would examine the offer from Bouygues.

Bouygues shares were up 0.82% at 0936 GMT while Colas fell 1.69%.

($1 = 0.9738 euros)

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Reporting by Valentine Baldassari and Elitsa Gadeva Editing by Christian Schmollinger, David Goodman and Louise Heavens

Our standards: The Thomson Reuters Trust Principles.

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