PARIS — French utilities and communications giant Generale des Eaux (CGE), has reported first-half profits of 3.6 billion francs ($620 million), and company chairman Jean-Marie Messier is predicting full-year profits in the region of $950 million.
CGE’s vast empire covers the waterworks business, transport, waste management and a raft of entertainment investments including being the major shareholder in Havas — which in turn is Canal Plus’ main backer.
Messier has made telecommunications one of the three main sectors which CGE is now concentrating on, marrying the expertise of the group’s mobile and fixed telephone companies (SFR and Cegetel) with Havas’ extensive publishing and multimedia interests and Canal Plus’ television and subscriber management savvy.
Following two years of massive asset sales totaling around $5.1 billion, Messier told reporters on Wednesday that the group’s restructuring is virtually completed. Revenues for the first half of the year hit $14 billion and the first-half profits are greater than any full-year results in the group’s 144-year history.
The biggest growth sector, in terms of revenues, was CGE’s communications interests, which saw revenues rise 69% to just under $1 billion. Messier recently told Daily Variety that his objective is for communications to rep nearer 25% of total revenues within three years. With SFR’s mobile phone subs tipped to hit 2 million by the end of the year, the group is gearing up to attack France Telecom in the lucrative fixed telephone biz when deregulation kicks in next year.
In recent weeks, there has been speculation that Messier might be obliged to make a full-scale takeover push on Havas, in which CGE has just over 30%. An association of Havas small shareholders is arguing that as CGE effectively control Havas, French law requires a formal takeover. CGE is contesting the claim and a ruling is due any time.