Bouygues Group saw operating profits drop 37 per cent in the first half of the year as its French telecoms division suffered the fall out from a price war.
The group – whose subsidiary Bouygues Construction owns Bouygues UK – reported a 2 per cent rise in sales to €15.5 billion (£12.28bn) to the end of June 2012. But operating profit slumped from €752m (£596m) to €476m (£377.2m), and net profit was down 29 per cent from €491m to €278m.
The figures come after Bouygues UK reported pre-tax profits falling by half in 2011 as turnover dropped by almost a third.
The Bouygues Group has launched a €300-million adjustment and savings plan and redundancy programme covering 556 employees at Bouygues Telecom as it faces ‘deep-seated changes on the mobile market’ and following the departure of 71,000 customers in the second quarter.
It comes after a price war which saw IIiad launch Free Mobile, impacting three big providers including Bouygues, France Telecome and Vivendi’s SFR. Bouygues Telecom opearting profits fell 55 per cent to €148m.
Bouygues Construction posted a ‘good commercial performance’. First half sales were up 7 per cent to €5bn, including 2 per cent in France and 13 per cent on international markets.
Operating margin was 3.2 per cent, with profits down 1 per cent from €165 to €163m.
The order book stood 14 per cent higher than at end-June 2011 at €17.7bn, after it took orders worth €6.9 billion in the first half of the year, up 12 per cent. It said international markets accounted for 46 per cent.
Colas – which has a roads and rail business in the UK - reported an overall 4 per cent increase in first-half sales to €5,594 million, down 3 per cent in France and up 15 per cent on international markets. The current operating loss stood at €34 million and net loss at €19 million, compared with €0 and €2 million profit respectively in the first half of 2011.
The order book was up 9 per cent to €7.9 billion (up 11% in mainland France and 7% in French overseas territories and international markets).
Bouygues Group’s net debt rose from €4.3bn to €6.2bn. The group order book was 13 per cent higher than at end-June 2011 at a new record level of €28.6 billion. Net debt rose from 4.3bn to 6.2bn.