January 4, 2017 / 1:35 PM / 7 months ago

French road builder Colas banking on 2017 sales growth

PARIS (Reuters) - French road builder Colas (COLP.PA) is eyeing higher sales this year as it could benefit from plans for more infrastructure spending in the United States, and in France ahead of local elections, its chief executive said on Wednesday.

Herve Le Bouc told Reuters that Colas, a unit of French construction giant Bouygues (BOUY.PA), was keeping its 2016 forecast of lower sales and improved profitability.

He was more bullish regarding 2017, saying he was "cautiously optimistic" in spite of uncertainties over issues such as Brexit and the new U.S. government that will be led by current President-elect Donald Trump.

"There is good news: the U.S. and Canadian infrastructure spending plans and prospects of local elections in France in three years that are usually supportive for investments," he said.

Colas, which makes 37 percent of Bouygues' revenue, had 2015 turnover of 12 billion euros ($12.5 billion), of which half came from France.

In the United States, President-elect Trump is planning $1 trillion of infrastructure spending to boost the economy.

It is too early to say if Trump will meet those promises but Colas can count on current plans, by the administration of outgoing U.S. President Barack Obama, to spend $550 billion over five years on infrastructure, said Le Bouc.

"Colas' revenue in the United States could increase by some 4-5 percent each year over the next five years if the Obama plan materializes," he said.

Colas, which makes 22 percent of its revenue in North America, saw sales in that region decline 8 percent in the first nine months of 2016.

Sales also fell in France during those first nine months, but Le Bouc expected conditions to improve this year, with French municipalities likely to step up infrastructure spending ahead of local elections in 2020.

Further support could come from the Canadian government, which is also seeking billions of infrastructure investments, and from increased British infrastructure spending to boost the UK economy after the Brexit vote to quit the European Union.

Le Bouc also expressed optimism over Colas' plans for solar panels, with the company's Wattway unit currently testing solar panels that are embedded into roads and are capable of withstanding the weight of an 18-tonnes truck.

These panels can then generate energy to power up streets, supermarkets or households without encroaching on farmland, and Colas is hoping to have some 50 testing sites by mid-2018 worldwide.

Colas' share price gained little ground in 2016, rising 0.04 percent, while Bouygues' shares fell 7 percent in 2016.

Reporting by Dominique Vidalon; Editing by Sudip Kar-Gupta

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