Bloomberg News

Vinci Falls as New French Taxes May Dent Earnings: Paris Mover

August 01, 2012

Vinci SA (DG), Europe’s biggest builder, fell the most in more than a week after Chief Executive Officer Xavier Huillard said new taxes planned by the French government will probably hurt this year’s earnings.

Vinci slumped as much as 5.2 percent, the biggest intraday decline since July 23. The stock was down 3.3 percent at 33.42 euros as of 9:26 a.m. in Paris.

“The new fiscal measures announced recently will probably slightly impact our earnings,” Huillard said on a conference call with journalists late yesterday. The government measures may raise Vinci’s taxes by 10 million euros ($12.3 million) to 50 million euros in 2012, he said.

Vinci targets 2012 operating income and net income “close to their 2011 levels, before taking into account the new increase in tax and social charges planned in France,” the company, based in the Paris suburb of Rueil-Malmaison, said in a statement yesterday.

The Vinci CEO said that Europe’s sovereign debt crisis and the collapse of municipal lender Dexia SA may undermine public works in the region and erode traffic on the group’s French toll roads. He reiterated a forecast for a “slight increase” in revenue this year, helped by a record backlog, and said he’s prepared to adjust to a possible deterioration in the global economy in the second half.

Vinci’s net income fell 3.6 percent in the first half to 784 million euros as the company paid 37 million euros to cover the introduction of a profit-sharing system and a new tax in France. Analysts surveyed by Bloomberg had estimated profit of 776.3 million euros. Adjusted for two charges, net income rose 1 percent to 821 million euros.

Vinci’s revenue climbed 3.6 percent to 17.9 billion euros in the first half, helped by acquisitions in Canada and India and by the drop of the euro against the dollar. Excluding acquisitions and exchange rate fluctuations, sales rose 1.6 percent.

To contact the reporter on this story: Francois de Beaupuy in Paris at fdebeaupuy@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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