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Investing.com -- Eiffage shares fell on Thursday after the French construction and concessions group reported a drop in profit and negative free cash flow for the first half of the year on Wednesday.
Net profit attributable to shareholders declined 19.4% to €308 million from €382 million a year earlier.
The fall followed a sharp rise in income tax expenses, which increased 50.2% to €353 million. The effective tax rate rose to 41.6% from 27.6%. Profit before tax was broadly flat at €849 million, compared with €852 million a year earlier.
Free cash flow turned negative at €91 million, down from €148 million in the first half of 2024.
The decline was linked to seasonal working capital outflows. Cash flow from operations also fell 18.1% to €451 million. Net debt stood at €9.9 billion at the end of the period, a 6.7% reduction from a year earlier.
Revenue for the second quarter rose 6.9% year over year to €6.31 billion, beating consensus expectations by 1.8%.
Contracting revenue increased 7.6% to €5.3 billion, with construction up 4.4%, infrastructure up 5.3% and energy systems up 12.5%.
Concessions revenue rose 3.2% to €1.01 billion but was 2.1% below expectations. For the first half, total sales rose 7.5% to €11.93 billion.
Adjusted operating profit was €1.006 billion, compared with €997 million in the first half of 2024, a 0.9% increase but a 1.3% miss against consensus.
Holding costs increased to €80 million from €32 million a year earlier. Eiffage’s order book at the end of the first half was €29.5 billion, down slightly from €29.7 billion in the first quarter, representing 17.4 months of activity.
The company confirmed its 2025 guidance, highlighting selectivity in energy systems and construction to support margins.
Management reiterated its expectation that energy sales will reach €8 billion in 2025 with a 6% margin. The group maintained its dividend policy and its unchanged position on Getlink, holding up to 30%.
Outside France, Eiffage reported more than 6% growth in its German energy subsidiaries in the first half, supported by acquisitions of Salvia and Eqos.
Management noted progress on Germany’s infrastructure plan, with potential impacts expected before 2027.
In France, municipal elections at the end of 2025 were cited as a factor supporting roadworks activity, though demand typically eases after election cycles.
As of the prior day’s close, Eiffage shares traded at €109.75, with a market capitalization of €10.4 billion.
Jefferies reiterated a “buy” rating and a price target of €136, representing a 24% increase from the last closing price.
The brokerage valued Eiffage at 10.5 times expected 2025 earnings, 5.2 times EBITDA, and a 10.5% free cash flow yield.