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Veolia Environment says revenue declined

Associated Press
November 5th, 2004

PARIS -- Veolia Environnement SA, the water utility that was once at the heart of Vivendi Universal SA, said Thursday that revenue, operating earnings and debt all declined in the third quarter as the company pursued its program of asset disposals. Like many French companies, Veolia does not release net income figures for the first and third quarters.

The world’s largest water company said revenue fell 11.9 percent to 6.17 billion euros ($7.91 billion) in the July-September period, from 7.01 billion euros in the year-earlier quarter. Earnings before interest and tax fell to 279 million euros ($358 million) from 351 million euros.

Vivendi and Veolia are the former owners of Palm Desert-based USFilter Corp., which is now owned by Siemens AG of Germany.

Siemens’ nearly $1-billion purchase of most of USF’s water technology and services business was completed this summer.

Veolia’s water division, which accounts for 35 percent of its’ business, suffered from milder weather conditions in France after last year’s heat wave, but benefited from a series of new contracts abroad, particularly in Asia. Veolia said water division revenue for the quarter came to 7.26 billion euros ($9.31 billion), up 1.6 percent from the same period of 2003.

Higher energy prices and new contracts also helped the energy division to boost its revenues by 7.4 percent to 3.41 billion euros ($4.37 billion) in the first nine months of 2004.

Veolia decided last year to dispose of assets and restructure its businesses to trim a bulging debt amassed by former Vivendi chairman Jean-Marie Messier.

Proceeds from the sale of water operations in the United States and a lucrative stake in a Spanish construction company allowed Veolia to cut its net debt to 10.1 billion euros ($12.95 billion) as of Sept. 30 from 12.7 billion euros at the end of June.

The group said it continues to anticipate double-digit operating profit growth at its core businesses in the full year and expects net debt to stabilize at the end of 2004.