- Rafael del Pino, Chairman of Ferrovial, cited revenue growth and the strong financial position at year-end.
- Del Pino stated that capital expenditure will focus on infrastructure in the US.
- The Shareholders’ Meeting, held in Madrid, passed all the items on the agenda, including the Ferrovial Flexible Dividend program.
Speaking at the Ferrovial Shareholders’ Meeting today, Chairman Rafael del Pino announced that NTE and LBJ, the Managed Lanes projects in Texas, will begin paying dividends in 2019 and 2020, respectively. He said that 2017 had been a “positive year” for the company and its businesses due to growth in sales revenues and in dividends from investees. He told shareholders that the company’s main assets, such as 407 ETR in Toronto, the managed lanes in Texas and Heathrow Airport, “experienced higher traffic and better operating results, and increased their dividends with respect to the previous year.” The Shareholders’ Meeting, held in Madrid, passed all the items on the agenda, including the financial statements and the Ferrovial Flexible Dividend program.
The chairman discussed business performance, with revenues up 13.5% to €12.208 billion. EBITDA stood at €932 million and net profit at €454 million, 21% more than the €376 million booked the previous year.
Del Pino reported that the backlog in Services and Construction (which reached a record high in the latter case) totaled €32,063 billion, 80% of which is outside Spain. “Construction has been strengthened in the United States with the I-66 in Virginia, Denver Airport, and a section of the Grand Parkway in Houston. These three projects, the first two of which are being developed by the Toll Roads and Airports divisions, expanded the company’s US backlog by over €3.200 billion,” he added.
He also discussed the role of Broadspectrum within the company. “This deal enabled the Services division to achieve a strong position in Australia and New Zealand, penetrate the United States and strengthen its footprint in Chile. Integration of the acquisition is advancing on schedule,” he noted.
The company continues to focus on its priority markets; the United Kingdom, Australia, the USA, Canada and Poland together accounted for 73% of revenues in proportionate consolidation terms.
The Chairman also stressed that the company’s financial position was strengthened by the issuance of a perpetual hybrid bond, which helped to double the net cash position with respect to 2016. At year-end, it had a positive net cash position (excluding projects) of €1,341 billion, 92% more than the previous year, while consolidated net debt (also excl. projects) had fallen by 19% to €3,463 billion.
Ferrovial allocated €520 million to shareholder remuneration in 2017: €218 million in dividends, plus share buybacks which had an impact amounting to €302 million.
Rafael del Pino pointed out: “We continue to advance with implementing a strategy of best practices with the aim of strengthening compliance throughout the project value chain.” During 2017, Ferrovial adopted a procedure for upfront integrity analysis of potential partners. It also enhanced diversity of experience, nationality and gender on the Board by appointing Hanne Sørensen as an independent director.
The Chairman emphasized the company’s commitment to sustainability, as shown by its inclusion in the Dow Jones Sustainable Index (for the 16th consecutive year), FTSE4Good (13th year) and the Carbon Disclosure Project (10th year), as well as its AAA rating from MSCI (Morgan Stanley Capital International).
Del Pino concluded: “Infrastructure modernization plans arising in our main markets, principally the US and Australia, as well as the slight change in trend in Spain, favor Ferrovial’s pursuit of profitable growth. We will focus capital expenditure mainly on infrastructure in the United States.”
Traffic growth and new contracts
Ferrovial CEO Íñigo Meirás emphasized the good performance by the company’s main assets, traffic growth on toll roads in the US, Canada and Europe, and the increase in passenger numbers at Heathrow airport and the UK regional airports. He also referred to business results and order intake in new markets.
The CEO detailed the contracts achieved by Ferrovial in 2017, such as the Western Roads Upgrade Project, in Melbourne, which is being developed by Cintra; the renewal of the on-board service contracts with Renfe in Spain, maintenance of Manchester MetroLink light rail, and the waste collection contract in Surrey, in the United Kingdom. He also discussed the contracts to build the Racibórz Dolny dam and a road in Krakow, both awarded to Budimex in Poland.
Íñigo Meirás stated that, during 2017, Ferrovial and its subsidiaries maintained their strategy of diversifying funding sources by taking advantage of favorable market conditions and investor confidence. Issues placed during the year included a €500 million perpetual hybrid and a €500 million 8-year corporate bond. AGS refinanced £793 million in the year, which made it possible to improve the group’s funding structure, extend debt maturities and distribute a special dividend. Additionally, 407 ETR issued three bonds for a total of CAD 1.050 billion, maturing in 2022, 2033 and 2044.
The CEO also discussed the company’s investments in the process of digital and technological transformation that the industry is experiencing: €47 million were invested in over 100 R&D projects.
To conclude, Meirás set out the company’s priorities for 2018 and the challenges facing Construction and Services, notably the pursuit of profitable growth and financial discipline, with particular emphasis on cash flow and operational management.
Meeting Resolutions
At today’s meeting, the shareholders approved the shareholder remuneration plan (flexible dividend), which is similar to that applied in the preceding three years and will be instrumented via two scrip dividends. Based on Ferrovial’s current share price, they would be equivalent to the payment of a dividend of approximately €0.740 per share, i.e. higher than in 2016. The shareholders also approved a program to buy back and cancel up to 19 million shares for at most €275 million.
