The company has a record order book giving it confidence in what it predicts could be a tougher second half of the year.
The order book was €33.2bn (£26bn) at 30 June, up 9% compared with 31 December 2011 and 11% compared with 30 June 2011.This is a new all-time high and equivalent to more than 12 months of average business activity. A little more than 40% is expected to be executed by year-end 2012, and about one-third is scheduled for 2013.
Vinci chairman and CEO Xavier Huillard summed up: “The first half has been OK. Despite bad weather, weak traffic on our French toll roads, and a macroeconomic environment that is difficult, Vinci’s top line increased 3.6%, our margins held up in most of our businesses, and our backlog is at record level. Things could be a bit tougher in the second half of the year, so we are on the alert but not overly concerned at present. The concessions business should be able to resist the current negative traffic trend. And this year’s expected contracting activity is almost 90% assured by the backlog. So yes, there are many challenges on the road ahead but we are ready for them.”
Adjusting for a timing difference, the operating income from ordinary activities (EBIT) for the first half increased by 0.5% year-on-year to €1,577m (8.8% of revenue).Consolidated revenue was €17,942m – an actual rise of 3.6% or 1.6% on a comparable basis.
On a like-for-like basis and excluding the exceptional Tours-Bordeaux high speed rail project booked in June 2011, 1st half 2012 order intake was up nearly 17% compared to the same period last year. This was due to a dynamic commercial environment both in and outside France.
In an economic context marked by the sovereign debt crises of several European Union countries, global economic activity could deteriorate in the 2nd half of 2012, said the company. Against this backdrop, Vinci is well prepared to make necessary adjustments while actively pursuing its targeted growth strategy.
Traffic on its French motorways under concession may continue to decline along the lines seen in the 1st half of 2012. Furthermore, a 2nd half 2012 decline in public spending could occur which could impact the workload of some contracting businesses in 2013.
Nonetheless, Vinci said that feels it is still aiming for a slight increase in the group’s top line in 2012.