Nexity issues profit warning, citing property slowdown

French property group Nexity issued a profit warning on Thursday, its second in little more than two months, citing a sharper than expected downturn in the property market.

Nexity said net income in 2008 would now amount to EUR 140mln, down from an earlier forecast of EUR 200mln made on 30 July. Nexity had previously forecast a net profit of EUR 240mln.

‘The downturn of the real-estate markets is sharper than could have been anticipated at the beginning of the summer,’ Nexity DEO Alain Dinin said in a statement. As it seeks to cope with the hard times, Nexity pledged to accelerate its restructuring. It said it would close or combine branches and close its Portuguese and Czech units, measures that should cut about EUR 60mln from its 2008 operating profit. The company forecasted an operating margin above 8% in 2008 and 2009 and added it did not expect a market rebound before 2010.

In an interview with Le Monde on Thursday Dinin also forecast that France’s housing starts could fall by 90,000 in 2008, threatening 180,000 jobs. Nexity itself will cut 500 jobs, Dinin said.