Veolia Environnement SA (VIE), the world’s biggest water utility, pledged to sell 4 billion euros ($5.6 billion) of assets over three years as full-year profit unexpectedly dropped.
Net income fell to 581.1 million euros in 2010 from 584.1 million euros a year earlier, the Paris-based company said today in a statement. That was lower than the average estimate of 631.5 million euros from 10 analysts surveyed by Bloomberg. Operating income gained to 2.12 billion euros from 1.98 billion euros a year earlier, while sales rose to 34.79 billion euros.
Veolia is aiming for growth of adjusted operating income “in the range of” 4 percent to 8 percent this year, an improvement in net income as well as cost savings of 250 million euros and asset sales of 1.3 billion euros. Over the period through 2013, the utility said divestments would rise to 4 billion euros and cost cutting would reach 300 million euros annually.
Together with smaller competitor Suez Environnement SA, Veolia has struggled to increase industrial waste sorting following the 2009 recession that forced factory clients to idle plants, reducing demand for utility services. Veolia has said the business of treating industrial waste, which accounts for about a third of sales, lags behind industrial production by as much as six months.
Veolia and Suez Environnement have benefited in recent months from a rise in prices of recycled materials. Suez last month reported a 40 percent increase in full-year profit and said volumes of waste treated at the start of 2011 were better than during the same period of 2010 although quantities haven’t rebounded to levels seen before the 2009 slump.
Cut debt
Veolia Chief Executive Officer Antoine Frerot is selling assets in a bid to cut debt following a 2007 and 2008 acquisition spree by former CEO Henri Proglio, who has since moved to head Electricite de France SA.
Veolia’s net financial debt rose to 15.21 billion euros from 15.13 billion euros.
Veolia supplies water to about 110 million people worldwide and collects and manages trash for about 50 million. It provides public transportation in 28 countries and supplies energy in Europe and the U.S.
