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Tue June 15 2021

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Covid sends Bouygues into the red

27 Aug 20 French construction group Bouygues plummeted to a first-half loss in 2020 as a result of the Covid-19 virus.

For the six months to 30th June 2020 Bouygues made a net loss of €244m, compared to a €225m first-half profit last year. Sales for the period were down 15% to €14,758 (2019 H1: €17,446m).

The construction businesses reported a current operating loss of €437m in first-half 2020, versus a current operating profit of €72m a year earlier.

Sales in the construction businesses were down 19% to €10.8bn in first half of 2020. France was particularly hard hit, with sales down 28%. International markets were down 10%.

A highlight of second-quarter 2020 was the current operating profit of €66m generated by Colas, due in particular to the rapid resumption of the roads activities, mostly in mainland France and Canada, the company said.

However, its construction backlog is at a record level – €35.7bn, up 6% year-on-year – and the group expects to return to ‘significant profitability’ in the second half of 2020, although this will still be down on 2019’s numbers.

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The construction order book includes a €1.1bn contract to build a section of the HS2 high-speed rail line in the UK.

The €2.7bn decrease in group first-half sales was entirely attributable to Covid-19, the company said, which had an estimated impact of -€2.8bn. In France, sales were down 19% due to the sudden lockdown on 17th March. Internationally, sales were down 10% related to the slowdown in activity and lockdown in various countries.

At group lveel, Bouygues made an operating loss of €176m for the first half, a deterioration of €671m year-on-year. It includes non-current charges of €44m, essentially at Colas, versus non-current income of €42m in first-half 2019.

Chairman and CEO Martin Bouygues said: “The long-term trends on which the group relies remain buoyant, despite the current crisis. After a challenging first half of the year, our fundamentals and our strategy should enable us to return to growth in all three sectors of activity.”

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