France's Vinci confident on 2017 prospects

By Dominique Vidalon

PARIS (Reuters) - France's Vinci (SGEF.PA) on Tuesday forecast higher revenue and profits this year on the strength of a French construction market upturn and a robust concessions business.

Europe's biggest construction and concession company also saw support this year from a new 800 million euro road infrastructure package announced by the French government, half of which was secured by Vinci.

"Despite uncertainty regarding the global economy, we expect increased activity in both our concessions and contracting businesses in 2017, along with higher group earnings," the statement said.

Vinci made the prediction after reporting forecast-beating revenues and profits for 2016.

Operating income rose 11.1 percent to 4.174 billion euros (3.58 billion pounds) on 38.07 billion euros in revenue, down 1.2 percent, thanks to tight cost control and a robust concessions business.

The results exceeded expectations of 4.065 billion euros in operating income and 37.841 billion in revenue, based on the median estimates of 12 analysts in a ThomsonReuters poll.

The company said its construction business, the biggest contributor to group revenue, saw a 5.6 percent fall in revenue last year while concessions revenue rose 8.5 percent.

To counter the construction decline, Vinci has been expanding into faster-growing and more profitable concessions such as airports and motorways as well as in energy engineering.

Vinci, which operates about half of France's motorway concessions said motorway traffic grew 3.2 percent in 2016 while its airport traffic grew 10 percent.

Vinci increased its proposed dividend to 2.10 euros per share from the 1.84 euros paid out in 2015.

($1 = 0.9346 euros)

(Reporting by Dominique Vidalon; Editing by Laurence Frost)