July 31, 2020 / 7:13 AM / 3 days ago

UPDATE 1-France's Vinci warns on earnings, drops interim dividend

(Adds details, CEO quotes from statement)

By Dominique Vidalon

PARIS, July 31 (Reuters) - France's Vinci on Friday warned its 2020 earnings would fall significantly after lockdowns meant a sharp drop in its airport and motorway concessions business in the first half.

Vinci said that, given the current exceptional circumstances, it would not pay an interim dividend but was confident in its ability to bounce back in 2021.

Europe’s biggest construction and concessions company said first-half operating profit from ordinary activities slumped to 267 million euros ($317 million) from 2.29 billion euros a year earlier.

Vinci, which operates a global network of 45 airports and has a majority stake in Britain's Gatwick airport, reported a net loss of 294 million euros in the first half as revenue of 18.5 billion euros dropped 17% on a like-for-like basis.

During the first half, traffic on Vinci Autoroutes motorways fell 32.8%, while passenger traffic at Vinci Airports slumped 61.4%.


Vinci said it saw an improvement in activity in July but predicted earnings would likely show a year-on-year decline in the second half, although it said the fall should be less pronounced than in the first half, barring exceptional items.

Chairman and Chief Executive Xavier Huillard said in contracting "business levels are now close to normal again in all business lines. At Vinci Autoroutes, after a sharp decrease in late March, traffic levels are now on track to return to 2019 levels."

At Vinci Airports "the upturn in business is proving limited because of ongoing tight restrictions and bans on international flights," he said.

For 2020, Vinci predicted a 15%-20% contraction in traffic on Vinci Autoroutes and a fall of about 65% in passenger numbers at Vinci Airports. In 2021, Vinci expects earnings to rise but remain lower than their 2019 level overall.

Vinci said it expected its business in the next few years to be supported by various stimulus plans, particularly in Europe, where they are focused on the environment.

$1 = 0.8416 euros Reporting by Dominique Vidalon; Editing by Jason Neely and Edmund Blair

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