France's Veolia boosts cost cutting, stock tumbles

French utility group Veolia Environnement said Thursday it would increase cost cutting despite swinging back into profit in the first half, sending its stock price tumbling.

The world's top water management firm said in a statement it was increasing its cost cutting targets by 50 million euros ($61.5 million) per year to 270 million euros next year and 500 million euros in 2015.

It also said it would reduce investments by 500 million euros this year and in 2013.

"First half 2012 revenue increased, despite the deterioration of the economic environment, in particular in Italy and in France, which weighed on the company's results," CEO Antoine Frerot said in the statement.

"In this difficult context, we have decided to increase our cost reduction efforts and reduce investments."

Veolia emerged from the red in the first half, scoring net profits of 153 million euros on revenues of 14.8 billion euros. But the profits were below analysts expectations and Veolia stock suffered.

At 1210 GMT, Veolia was down 10.36 percent in Paris to 8.269 euros, erasing the company's gains made so far in 2012.