Bouygues profit tops estimates, returns to pre-pandemic levels

France’s Bouygues reported on Tuesday nine-month core profit that beat forecasts, lifted by a strong performance in its broadcast business TF1 and construction arm Colas and customer gains in its telecom division.

The Paris-based group posted a current operating profit of 1.14 billion euros ($1.3 billion), just above analysts’ 1.13 billion estimate and rising above pre-pandemic levels.

For the same period last year, Bouygues posted a core profit of just 681 million euros.

Its construction businesses benefited from major road contracts in Canada and Madagascar, while Bouygues Telecom added mobile and broadband customers, boosting sales.

The group, which is planning a merger of TF1 with its rival M6, reported gains in audience market share in key age brackets as well as strong demand for TV advertising.

Chief Executive Oliver Roussat told reporters he was “rather confident” the French regulator would approve the tie-up when it rules next October, the decision hanging in part on the nature of the markets retained by the joint group.

The planned merger would combine France’s two biggest private broadcasters and see the joint entity control three-quarters of the country’s TV advertising market.

Exploding costs
Analysts noted the “small” beats to consensus forecasts, but the group’s net profit was slightly below estimates as it accounted for costs of operations such as its planned acquisition ofEquans.

Bouygues earlier in November agreed to buy the services arm of energy group Engie in a deal that would be its largest ever acquisition and would make its new Energies & Services segment its largest business division.

Roussat said the company had also faced spiralling raw materials costs, from steel prices to freight from China.

“Costs for journeys have literally exploded,” he said. “In some cases the costs have gone up eight or nine-fold.”

However, Roussat said Bouygues was able to soften the blow by passing on costs on its short-term contracts, while some longer-term deals included provisions for inflation. Reuters