Veolia Environnement 9-Month Profit Up, Revenues Down; Cuts FY16 Revenue View

(RTTNews) - French resource management firm Veolia Environnement (VE) reported Thursday that its nine-month current net income - group share grew 2.9% to 421 million euros from last year's 410 million euros.

Current net income - group share excluding items was 388 million euros, compared to 339 million euros a year ago.

Current EBIT grew 4 percent to 979 million euros, and EBITDA, a key earnings metric, grew 2.7 percent to 2.21 billion euros. EBITDA margin went up to 12.5 percent from 11.7 percent a year ago.

Revenues, meanwhile, dropped 3.2 percent to 17.71 billion euros from 18.29 billion euros a year earlier. At constant exchange rates, revenues went down 1.2 percent. Excluding the impact of construction and energy prices, revenue increased 1.6%.

The company noted that the results reflected lower energy prices, and lower construction activity.

Antoine Frérot, Veolia's Chairman and CEO said, "Given a persistently difficult environment, with a sluggish economy and weak inflation, revenue was slightly below our expectations in the third quarter, but commercial development was strong, providing confidence for the coming quarters."

The 2017 fiscal year should fully benefit from numerous developments completed this year, all while maintaining cost reduction efforts at a similar pace to 2016.

For fiscal 2016, the company now expects revenue to be overall stable, while previously the expectation was for revenue growth.

The company continues to expects EBITDA growth as well as current net income of at least 600 million euros.

For the 2016-2018 period, the company expects a progressive increase in revenue growth to achieve average annual revenue growth between 2% and 3% based on the current economic environment, and average annual EBITDA growth of around 5% per year.

The company also projects current net income greater than 800 million euros in 2018, and more than 600 million euros in cost savings over the period.