Veolia reports profit fall but shares surge

Utilities group Veolia Environnement reported a 25-percent fall in operating profits over the first nine months of the year on Wednesday but this was better than expected and its share price jumped 6.47 percent. The French group is a world leader providing water services and is a global player in waste management and public transportation. It reported that trading by the water and waste divisions remained sluggish as in the first six months but that overall sales in the nine months rose by 3.0 percent to 21.6 billion euros ($27.7 billion). Recurrent operating profit fell by 25.0 percent to 841 million euros. The price of shares in the group was showing a gain of 6.47 percent to 8.109 euros. The overall market as measured by the CAC 40 index was showing a gain of 0.56 percent in mid-day trading. Analysts polled by Dow Jones Newswires on average had expected sales to fall by 2.0 percent and operating profit to fall by 27.0 percent. The group is heavily indebted and borrowings rose to 15.2 billion euros from 14.7 billion euros at the end of 2011. Chief executive Antoine Frerot said that several actions to reduce debt should be completed by the end of the year and would reduce borrowings by 2.5-3.0 billion euros in the fourth quarter. For the whole 2012-2013 period, the group said that it would sell assets to raise 5.0 billion euros and reduce debt to less than 12.0 billion euros next year.