Suez Environnement, a world leader in managing water supplies and waste management, on Thursday reported a surge in net profit last year and was bullish about the outlook.

The French group said that net profit rose by 40.2 percent to 352 million euros ($482.4 million).

But sales fell by 3.0 percent to 14.64 billion euros from 15.10 billion euros in 2012.

Sales fell mainly owing to a slide outside Europe, attributable to unfavourable exchange rates.

The price of shares in the group was showing a gain of 7.09 percent to 14.10 euros in early afternoon trading. The French market as measured by the CAC 40 index was down 0.44 percent.

Chief executive Jean-Louis Chaussade told a telephone press conference: "In a difficult economic environment in Europe, Suez Environnement is posting sold results, in line with our targets."

At brokers Global Equities, trader Yves Marcais said that the company "has been added to the list of preferred stocks by UBS (bank), and this is having a strong effect on the market."

But he also said that the sales figures, and earnings before interest, tax, depreciation and amortisation (EBITDA) were somewhat disappointing.

The company said that unfavourable exchange rates had reduced sales figures by 262 million euros.

The rest of the setback was attributable to a change in the size of the company owing to the sale of sites in Britain and France.

International sales outside Europe had also slipped.

Chaussade said that environmental problems had become a vital factor of development in China where increasingly tight regulations favoured the group's activities.

He said the group expected to achieve internal growth of 2.0 percent this year, and this could be pushed higher by investments.

The company set a target for cost-cutting of 125 million euros this year, after achieving 180 million euros last year, beating a target of 150 million euros.

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SUEZ ENVIRONNEMENT

UBS AG