February 28, 2018 / 5:48 PM / 2 years ago

UPDATE 1-Eiffage upbeat on 2018 with strong order book and Paris metro contract

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Feb 28 (Reuters) - French engineering group Eiffage said on Wednesday it saw its Paris metro expansion contract and significant order intake for its contracting business fuelling further revenue growth this year, after reporting higher profit for 2017.

The company, which took part in building the Sydney Opera House, said earlier this month it was part of a consortium that had won a contract for line 16 of the Grand Paris Express, valued at 1.84 billion euros, of which 1.71 billion made up Eiffage’s part.

The Grand Paris Express, a 38.5 billion euro metro expansion, is one of Europe’s biggest infrastructure projects and involves building 200 km (124 miles) of track and 68 stations.

The order book of the Milau Viaduct builder reached 12.9 million euros in 2017, an increase of 7 percent year-on-year.

“Thanks to the significant orders taken ... the Group expects a new growth in its revenues in 2018. Its result should also progress,” the company said in a statement.

Eiffage’s consolidated sales rose 6.3 percent like-for-like to 15 billion euros, thanks to an upbeat fourth quarter in both its contracting and concessions businesses.

The group’s operating profit on ordinary activities increased by 8.3 percent to 1.73 billion euros ($2.1 billion) last year, increasing the operating margin to 11.5 percent.

France’s third-largest builder’s positive 2018 outlook echoed similar upbeat messages from peers such as Saint Gobain , as a strengthening global economy buoys the construction industry.

Earlier this month, its competitor Vinci, predicted a further rise in profit and revenue, after it reported results above analysts expectations, while the construction arm of another rival Bouygues posted a record end-December order book.

However, the French building federation (FBB) has predicted slowing growth in the country’s construction sector in 2018 because of curbs on government measures supporting the industry and due to property prices becoming more expensive.

Growth in 2018 is seen slowing to 2.4 percent, almost a half the rate recorded in 2017.

Eiffage also proposed a 33 percent hike in its dividend to 2 euros per share.

$1 = 0.8187 euros Reporting by Piotr Lipinski in Gdynia; Editing by Susan Fenton and David Evans

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