Ferrovial raises net profit to 189 million euro in the first half of 2016

Ferrovial, the world-leading infrastructure operator and manager of services for cities, obtained net profit of 189 million euro in the first half of 2016, compared with 267 million euro in the same period of 2015, due to the lower volume of extraordinary income.  EBITDA amounted to 421 million euro, on 4,697 million euro in revenues, due to good performance by the main assets. Traffic increased strongly in all regions, the Construction division obtained major new contracts in other countries, and Broadspectrum was integrated into the Group. These results were also affected by sterling’s depreciation following the referendum in the United Kingdom. International activities accounted for 73% of total revenues.

Ferrovial collected 236 million euro in dividends from the assets in which it holds a stake, and recognised 129 million euro in capital gains on divesting Chicago Skyway and the Irish toll roads.

In terms of operating performance, traffic increased at Ferrovial’s main assets—both toll roads and airports—in the US and Europe: 407 ETR (+2.9%), Algarve (+21%), Ausol I (+12.7%), Heathrow (+0.6%) and Glasgow Airport (+8.4%).

The order book totalled 36,486 million euro, of which Services accounted for 27,024 million euro and Construction for 9,462 million euro, a 15.7% increase as a result of new international construction contracts and the inclusion of Broadspectrum in the Services order book. Notable new contracts in the first six months of 2016 include a section of high-speed railway line in California; the Olsztyn bypass and a number of sections of the S17 and S3 highways, in Poland; maintenance of 370 kilometers of roads in the United Kingdom; highway D4-R7 in Slovakia; and Broadspectrum’s contribution in Australia.

Innovative project finance

Ferrovial ended the first half of 2016 with a net cash position (excluding infrastructure project debt) of 444 million euro, compared with 1,514 million euro at 2015 year-end, affected by the acquisition of Broadspectrum. Ferrovial acquired that Australian company in May for an enterprise value of 934 million euro (499 million euro of equity and 435 million euro of net debt).

Consolidated net debt amounted to 5.571 billion euro. The parent company does not have significant debt maturities until 2018.

During the period, the I-285/SR 400 construction project in Atlanta, worth 458 million dollars, was financed through a bank loan that is tax-exempt for the lender. This is the first PPP project of its kind in the US to be financed in this way.

Ausol’s debt was refinanced by issuing 30-year bonds and notes, rated BBB, that pay a 3.75% coupon, as well as 51 million euro in subordinated bank debt.

Finance for the D4-R7 highway in Slovakia, which represents an investment of 975 million euro, was completed in June.

Strong performance by the main assets, and traffic growth

EBITDA increased significantly at the company’s main assets: by 11.7% at 407 ETR in Canada and by 4.5% at Heathrow Airport (in local currency terms in both cases). Traffic also increased, in line with the last few quarters: by 2.9% on the 407 ETR, which boosted revenues by 9.5% and broke the record for daily trips four times. Passenger numbers at Heathrow increased by 0.6% to 35.7 million.

These results enabled HAH to distribute a dividend of 150 million pounds in the first half. The 407 ETR distributed 375 million Canadian dollars to shareholders in the period. It declared a third dividend in July which is 10% higher than in the same quarter of 2015.

The NTE in Texas continued to perform according to plan. Revenues amounted to 35 million dollars in the first half, a 57.9% increase year-on-year. The road registered 6.2 million trips, 24% more than in the same quarter of 2015.The LBJ, the second managed lanes project in Texas, which was inaugurated in the second half of 2015, provided 26 million dollars in EBITDA on 34 million dollars in revenues in the first six months of 2016. The road logged 9.7 million trips, 20.9% more than in the previous quarter.

Business units

Services revenues increased in the first half to 2,609 million euro due to integrating Broadspectrum, although they were affected by depreciation of the pound sterling. Spain performed well, with 3.6% growth in revenues due to the higher contribution from the waste treatment and industrial maintenance businesses. Revenues from international businesses in such countries as Poland, Portugal and Chile, among others, expanded by 19% in like-for-like terms, and the order book doubled to 729 million euro. Earnings in the United Kingdom were affected by pressure on volumes and margins in public sector contracts as a result of the administration’s budgetary constraints.

Toll Roads experienced traffic growth on most assets. The US, Spain and other European countries registered an improvement across the board. Revenues amounted to 236 million euro. Ausol‑I increased traffic by 12.7%. The company recently signed the contract for the D4-R7 highway in Slovakia (Bratislava bypass).

In Construction, revenues totalled 1,862 million euro, affected by the completion of large projects, although order intake remains strong, and Budimex registered strong growth (revenues +9.1%, EBITDA +39.1%, in like-for-like terms). International activities continued to gain in importance, accounting for 83% of revenues and 82% of the order book.

In Airports, HAH registered 4.4% EBITDA growth in local currency terms. The regional airports (Glasgow, Aberdeen and Southampton) achieved 4.5% growth in EBITDA, in local currency terms. The number of passengers using those airports increased by 1.6%. Ferrovial Airports was chosen to begin negotiations for the Great Hall project at Denver International Airport.