By Inti Landauro 
 

PARIS--French conglomerate Bouygues SA aims to report an increase in operating profitability next year on the back of an expected improvement in demand for housing is France and continued recovery of its telecommunications unit, Chief Financial Officer Philippe Marien said Friday.

Earlier in the day the company reported higher-than expected net profit for the first nine months of this year, reflecting a turnaround at its telecoms business. The outlook for its telecoms unit is brightening as Bouygues moves its wireless subscribers to new pricing packages and contracts and wins both fixed and mobile customers from rivals, including the newly merged Numericable-SFR SA, Orange and Iliad.

The group's net profit fell to 334 million euros ($360 million) for the nine months through September, from EUR712 million in the same period a year ago. Analysts polled by the company expected a median net profit of EUR201 million. The 2014 data included capital gains made on the sale of assets that year. When stripping the effects of those gains, Bouygues's net profit rose 2.5%.

The company said an increase of earnings before interest, taxes, depreciation and amortization at its telecom unit more than offset a decline at its construction businesses.

Sales revenue in the first nine months dipped 2% to EUR23.82 billion, mainly due to slower revenue from construction-related businesses in France.

Mr. Marien declined to say whether overall revenue will pick up in 2016. "Sales revenue is not the indicator we pay more attention to," he said.

The French conglomerate maintained its outlook for its construction units and its television business for 2015, saying that the good health of its construction businesses abroad will offset weakness in France, while it expects Bouygues Telecom's Ebitda to rise to EUR750 million from EUR694 million last year.

The profitability target for 2016 shows that the management is optimistic about a recovery in the weak French economy, which had in the past couple of years resulted in a housing slump and cuts to infrastructure spending, as well as a continued turnaround at its telecoms unit.

Write to Inti Landauro at into.landauro@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 13, 2015 04:11 ET (09:11 GMT)