Bouygues' telecoms arm curbs COVID impact in first half (updated)

COLAS SA

27/08/2020 08:34

* Bouygues Telecom's H1 sales up 4%
    * Group sales H1 sales down 15%
    * "Significant profitability" seen in H2

 (Adds details, background, share price)
    By Mathieu Rosemain
    PARIS, Aug 27 (Reuters) - French conglomerate Bouygues
 BOUY.PA 's first-half results beat market expectations on
Thursday as the strong performance of its telecoms arm reduced
the financial hit of the COVID-19 crisis.
    Shares traded 2.2% higher at 0723 GMT, making it the best
performing stock in France's benchmark index CAC 40.  .FCHI 
    Bouygues Telecom was the only division to see sales growth
in the first half, the family-run group said in a statement. It
was driven by an increase in mobile and broadband customers. 
    By contrast, Bouygues' construction activities, which
represent the bulk of sales, fell sharply over the first six
months when France experienced a severe two-months lockdown. 
    Group current operating loss was 132 million euros ($156
million) in the first-half, reflecting a fall of 585 million
euros from a year earlier. 
    This beat the median average of nine analyst estimates
compiled by the company, which predicted a current operating
loss of 336 million euros. 
    The COVID impact pushed group sales down 15% on
like-for-like basis to 14.8 billion euros, also beating the
market consensus. 
    For Bouygues' construction activities, which span real
estate and the building of infrastructure, the hit on sales
because of the coronavirus outbreak was 2.5 billion euros. 
    Bouygues Telecom grew by 4% from a year earlier, with an
estimated COVID impact on revenue of 70 million euros. The
division's current operating profit grew by 23 million to 253
million euros. 
    "The long-term trends on which the group relies remain
buoyant," Chief Executive Martin Bouygues said. 
    Bouygues did not provide new group financial targets for
2020 after dropping them earlier this year. 
    However, it predicted a return to "significant
profitability" in the second-half, although still below the
levels reported over the same period in 2019.
    Bouygues' telecoms arm expects to grow by around 4% in 2020,
versus a previous target of 5%. It also sees free cash flow
reaching 250 million euros for the year, close to the 300
million-euro target set at the beginning of 2020.
   ($1 = 0.8456 euros)

 (Reporting by Mathieu Rosemain;
Editing by Sudip Kar-Gupta and Barbara Lewis)
 ((Mathieu.Rosemain@thomsonreuters.com; +33 1 4949 5182; Reuters
Messaging: mathieu.rosemain.thomsonreuters.com@reuters.net;
Twitter: https://twitter.com/MathieuRosemain))