Vinci, the French construction and infrastructure firm, has reported impressive financial results for the year 2023, surpassing previous records. Despite a decline in the performance of its real-estate business, Vinci’s net profit reached an impressive 4.70 billion euros ($5.05 billion), up from EUR4.26 billion in 2022. This achievement aligns with market expectations of EUR4.71 billion, according to a FactSet poll of 17 analysts. As a result, Vinci has proposed a dividend of EUR4.50 per share.
Overall revenue for the company also experienced notable growth, reaching EUR68.84 billion compared to EUR61.675 billion in the previous year. This figure slightly exceeded analyst predictions of EUR68.29 billion, as reported by FactSet.
Vinci’s success can largely be attributed to growth across all sectors, both within and outside of France, with the exception of its real-estate business. Unfortunately, the real-estate sector recorded a 19% decrease in revenue, amounting to EUR1.23 billion due to lower transaction volumes and prevailing high interest rates. However, Vinci’s concessions business enjoyed strong vehicle traffic despite elevated fuel prices, while its energy sector benefited from the ongoing trends of energy transition and digitization, resulting in increased profitability.
The company’s earnings before interest and taxes also demonstrated significant improvement, finishing the year at EUR8.36 billion, up from EUR6.82 billion in the previous period. Analysts had previously estimated earnings before interest and taxes of EUR8.14 billion.
Furthermore, Vinci achieved growth in earnings before interest, taxes, depreciation, and amortization (EBITDA), which reached EUR12 billion, compared to EUR10.2 billion previously. This growth was driven by a remarkable recovery in its airports business, contributing to half of the overall increase in EBITDA.
Vinci’s free cash flow for the year exceeded expectations, reaching EUR6.63 billion, notably surpassing the company’s target of at least EUR4.5 billion. In January, Vinci had already stated that free cash flow would surpass EUR5.4 billion.
Looking forward, Vinci anticipates continued revenue growth in 2024, although at a slower pace than in 2023. Furthermore, the company predicts higher earnings for the upcoming year. However, Vinci does expect its net profit in 2024 to be similar to its 2023 level, as it anticipates a negative impact from a new French tax on long-distance transportation infrastructure, amounting to approximately EUR280 million.
