Ferrovial reports 72 million euro net profit in the first quarter of 2017

Ferrovial, the global infrastructure operator and manager of services for cities, obtained 72 million euro net profit in the first quarter of 2017. Revenues amounted to 2,885 million euro, a 39% increase, and EBITDA to 227 million euro, 17% more than in the year-ago quarter, affected positively by the acquisition of Broadspectrum. In contrast, the 157 million euro net profit booked in the same period of 2016 included capital gains on the sale of Chicago Skyway and the M3 and M4 toll roads in Ireland.

This year’s earnings are attributable to good performance by the main assets, such as highway 407, Heathrow Airport, the managed lanes projects in Texas, and AGS, with strong traffic growth in all regions, together with notable new international construction contracts. Sterling’s performance had a negative effect in the quarter.

Ferrovial collected 154 million euro in dividends from the assets in which it holds a stake. The company divested 3.9% of Budimex for 59 million euro while retaining a 55.1% in this Polish company.

In terms of operating performance, traffic increased at Ferrovial’s main infrastructures—both toll roads and airports—in the US and Europe: 407 ETR (+5.6%), LBJ (+22.6%), NTE (+7.6%), Ausol I (+7%), Heathrow (+2.2%) and Glasgow Airport (+6.3%).

The order book totaled 33,329 million euro, of which Services account for 24,022 million euro and Construction for 9,307 million euro; 79% of the backlog is located outside Spain (75% in the case of Services and 84% in the case of Construction). Notable new contracts include operation and maintenance of Manchester Metrolink, construction of the Gouvaes hydroelectric plant, and a number of roads in the US and Poland. Other significant new contracts that were not yet booked in the first quarter of 2017 as they were pending closure are the I-66, in Virginia, and a section of the Grand Parkway, in Houston.

Main funding deals in the quarter

Ferrovial ended 1Q17 with a net cash position (excluding infrastructure project debt) of 477 million euro. Consolidated net debt amounted to 4,514 million euro.

During the quarter, Ferrovial issued a 500 million euro 8-year bond paying a 1.375% annual coupon. Also, 407 ETR issued a CAD 250 million 16-year senior bond with a 3.43% coupon.

Refinancing of AGS for 793 million pounds with a syndicate of nine international financial institutions was completed in the first quarter, improving the company’s funding structure and extending its maturities.

Performance by the main assets, and traffic growth

EBITDA increased significantly at the company’s main assets: by 17.5% at 407 ETR in Canada and by 3.8% at Heathrow Airport (in local currency terms in both cases). Traffic also increased, in line with the last few quarters: higher traffic on 407 ETR contributed to a 15.7% increase in revenues in local currency terms. Heathrow handled 17 million passengers in the quarter, increasing revenues by 2.1% to 655 million pounds.

These results enabled HAH to distribute a dividend of 94 million pounds in the quarter, of which Ferrovial collected 28 million euro. Highway 407 ETR distributed 207 million Canadian dollars to shareholders in the period, of which Ferrovial collected 63 million euro.

The managed lanes projects in Texas continued to perform well. The NTE achieved 20 million dollars in revenues (+26.4% year-on-year) and 17 million dollars in EBITDA (+36%). The road registered 6 million trips, 6% more than in the same quarter of 2016. LBJ, the second managed lanes project, attained 18 million dollars in EBITDA (+66.1%) on 22 million dollars in revenues (+46.5%).The road logged 9.5 million trips (+18.5%).

Business units

Toll Roads experienced growth in traffic on most of the company’s assets. The general improvement in the US, Canada, Europe and Spain gained solidity. Revenues amounted to 105 million euro, including a notable contribution from the managed lanes in Texas, and EBITDA achieved a strong 23.9% increase in like-for-like terms. Traffic on Ausol I increased by 7%, boosted by tourism and the general economic situation.

Services expanded revenues by 56.1% year-on-year, to 1,807 million euro, due to the acquisition of Broadspectrum, though the figures were affected by sterling’s depreciation. Adjusting for the exchange rate effect, revenues would have increased by 6.3%. Spain performed well, with 11.1% growth due to the higher contribution from industrial and infrastructure maintenance. International revenues, from such countries as the US, Poland, Chile and Portugal, increased to 123 million euro due to the addition of Broadspectrum’s American business, and the backlog tripled to 1,919 million euro.

Construction revenues totaled 965 million euro (+19.7%) due to stronger order intake in the US, the UK and Australia. The EBIT margin was stable at 5%. Budimex (revenues +5.6% and EBITDA +91.8%) continues to perform very well. Pepper Lawson contributed 53 million euro in revenues in the quarter. International activities continued to gain in importance within this division, accounting for 83% of revenues and 84% of the backlog.

As for Airports, HAH experienced 2.1% growth in revenues and a 3.8% increase in EBITDA, both in local currency terms. The AGS regional airports experienced 23% EBITDA growth in local currency terms. The number of passengers using those airports increased by 5.3%. AGS distributed a dividend of 94 million pounds, of which Ferrovial received 54 million euro.