May 2, 2017 / 5:47 AM / in 7 months

UPDATE 1-Geberit sees 2017 uplift in construction sector

(Adds details of results, background)

ZURICH, May 2 (Reuters) - Shower toilet and plumbing supplies maker Geberit reported on Tuesday a 2.1 percent year-on-year rise in first quarter net profit, helped by what it said was a largely positive environment in the construction industry.

Geberit, which makes products for wash basins, showers and urinals, is seen as a bellwether for the broader construction industry. It gets around a third of its sales from new building projects and two thirds from renovation work.

The Swiss company posted net profit of 153.4 million Swiss francs ($154.06 million) for the first three months of 2017, meeting analyst estimates of 153 million francs in a Reuters poll. It reported a figure of 150.3 million francs a year earlier.

Sales rose 2.6 percent to 737.1 million francs from 718.6 million francs a year earlier. Analysts had forecast a figure of 747 million francs.

It said sales in all of its regions had grown during the three months to March 31. Europe - its largest region - increased sales by 6.2 percent when adjusted for currency fluctuations and sales of fringe businesses.

The company said the construction industry “should develop favourably” in 2017, although with countries seeing differing performances.

“In Europe, the recovery that began in the previous year should continue,” Geberit said. “Overall, a favourable market environment is expected for Germany, the Nordic Countries, Switzerland, Austria, France, the Benelux Countries and the countries of Eastern Europe.”

The German construction industry association has previously reported a solid start to the year, with sales up 6.8 percent in the first two months of 2017 despite unfavourable weather.

Geberit said it expected the situation in Italy to stabilise, but uncertainty surrounding Britain’s vote to quit the European Union would weigh on construction there.

In North America, it expects stagnation in public sector construction and moderate residential construction, while the construction industry in the Gulf would continue to see low activity due to the depressed oil price.

Geberit said its results were hit by the strong Swiss franc, which along with slightly higher raw materials cost will affect sales and earnings in the rest of the year. Geberit is a big buyer of copper, polystyrene and plastics it uses in its piping systems.

$1 = 0.9957 Swiss francs Reporting by John Revill; Editing by Muralikumar Anantharaman

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