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S&P raises outlook on French construction firm VINCI to positive

S&P Global Ratings revised its outlook on VINCI SA to positive from stable, citing the French concession and construction firm's stronger-than-expected cash flow generation in 2017.

As part of the rating action, S&P affirmed VINCI's long-term and short-term issuer credit ratings at A- and A-2, respectively.

The company's cash flows exceeded expectations last year, S&P said, amid higher passenger volumes at VINCI's airports, increased traffic at French toll roads and growing margins and order book in the construction and energy contracting segments.

VINCI's consolidation of recent airport acquisitions also contributed to the strength of its cash flows, S&P added.

"The positive outlook reflects our forecast that VINCI will continue to generate strong operating cash flows," S&P said, adding that the company is also expected to maintain the expansion of its concession portfolio in airports and toll roads, which could further improve its cash-flow stability.

"We believe that a sizable acquisition of a mature concession asset in a developed country could strengthen, even further, the stability and predictability of the group's cash flows, and diminish in relative terms the weight of the riskier contracting business," the rating agency said.

VINCI's revenues rose to €40.2 billion in 2017 from €38.2 billion in 2016.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.