Veolia cuts debt, costs, and operating profit margin

Veolia shares briefly broke through the €10 mark this morning after its 2012 results release showed that its divestment and cost-cutting programme was ahead of schedule. However, tough conditions in the market still continue.

Overall group revenues grew by 1.5% year on year to €29.4 billion. Despite €60 million of cost-cutting, operating income was down 24.5% to €1.2 billion. Lower taxes and gains from discontinued businesses helped deliver net income of €394 million. In 2011 the net loss was €490 million.

The water business saw organic growth of 1%, to €12.1 billion, although operating income fell by 23% to €674 million. French water revenues advanced by 1.3%. This was mainly due to price rises and construction as contract erosion has continued. Outside France, the bright spots included China, central and eastern Europe and the oil and gas sector. Berlin and Guadalupe, which saw tariff reductions, were the black spots.