By Alban Kacher
(Reuters) -French infrastructure group Vinci on Thursday said its previous net income guidance for 2024 did not take account of a corporate income tax rise being reviewed by the French parliament and could cost it 400 million euros.
“Initial analysis suggests that if the bill were passed in its current form, this exceptional levy would represent an additional tax charge of around 400 million euros in 2024, which would be paid in 2025,” the group said in a statement.
Earlier this month, France’s prime minister Michel Barnier confirmed he will increase corporate tax on the biggest companies in the country.
Stifel estimates this would imply an impact of 800 million euros for Vinci.
The group restated its 2024 guidance, but said that its net income outlook did not include the effect of the potential tax hike considered by the French government.
For the first nine months of 2024, group revenue rose 2.5% on a like-for-like basis, compared with a 10% growth during the same period a year ago.
Slowdown was notably visible in the concessions business, up 5.6% like-for-like against a 12% growth over the same period a year ago.
Regarding the construction segment, the group saw a decline in Africa due to geopolitical factors, notably in Mali and Nigeria, group CEO Xavier Huillard said during a conference call. He said that “building is obviously suffering considering the real estate situation” in France.
Vinci’s construction segment has been impacted by the crisis in France’s property development sector due to the worsening of the economic situation in the country. Those setbacks have brought pressure on the group’s margins throughout the year.
Huillard added that Vinci did not anticipate an acceleration of the order intake in roadwork business in France next year.
He also ruled out the closure of any further M&A before the end of the year.
In the first nine months of 2024, industrial engineering segment Cobra decreased to 3.9% growth, compared to a 14% growth in 2023. Activity was notably impacted by the phasing of several large projects in Brazil, the group said in a statement.
Earlier this year, Vinci reported slightly lower than expected revenue in the first half of the year, as the impact of the new tax on long-distance transport infrastructure in France offset the growth across the group’s segments.
(Reporting by Alban Kacher; Editing by Alistair Bell and David Evans)
