French water and waste services group Veolia reported a net loss of 2013 on Thursday but said it expected better times this year, sending its shares surging.

Veolia, a world leader in its sector, reported a net loss of 135 million euros ($184 million) and a fall of sales, but underlying profitability improved.

This compared to a net profit of 404 million euros in 2012, a figure boosted by big profits from asset sales.

The figure for last year was undermined by non-recurrent charges.

But the group pointed to a sharp improvement in underlying performance.

Excluding exceptional items, recurrent operating profit rose by 17.0 percent to 922 million euros, and the net recurrent profit rose fourfold to 223 million euros, which was better than analysts had expected.

The price of shares in the group was showing a gain of 7.41 percent to 13.70 euros in initial trading. The overall French market was down 0.87 percent in early afternoon trading.

"The results are broadly in line with expectations so far as operations are concerned. The share is being pulled up really by the outlook" said one trader in Paris who declined to be named.

Veolia, which also provides transportation services, said it expected to increase sales this year, excluding exchange rate factors, and to improve its net profit performance and recurrent operating profit significantly.

The company took an extra provision of 150 million euros for waste treatment activities in Germany, and took a charge of 141 million euros to finance job cuts in its water activities in France.

It also made a provision of about 60 million euros for its loss-making SNCM shipping company which provides a ferry service between mainland France and Corsica.

Chief executive Antoine Frerot, who survived a boardroom attempt to oust him, said that in 2013 the group had benefited from the positive effects of efforts to reorganise Veolia Environnement.

The group was ambitious for this year, he said, and performance would be improved mainly by reducing costs which would boost profits.

Last year sales fell by 4.0 percent to 22.3 billion euros. Analysts had expected a fall of about 2.0 percent.

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VEOLIA ENVIRONNEMENT