Plan to create value through growth confirmed
Six new toll roads awarded, representing over 7.5 billion euro of investment, and close to 15,000 new parking spaces
Expanding presence abroad: 76.8% of EBITDA and 68.4% of revenues were generated outside Spain
EBIT increased by 22.4% to 359.8 million euro. Revenues increased by 27.1% to 884.7 million euro due to good traffic performance on the company's toll roads and the entry into service of new projects
Cintra's indicative internal valuation of its main assets, updated to December 2006, is 7.193 billion euro, 13% more than in June 2006
Growth was driven by positive revenue performance, improved margins, entry into service of new toll roads, and expansion in the car park business
Cintra, the Ferrovial subsidiary that specialises in bidding for and managing toll roads and car parks, increased EBITDA by 27.8% in 2006 to 593 million euro, bringing the EBITDA margin to 67%. In 2006, 76.8% of EBITDA came from projects in other countries, especially Canada and the US.
EBIT increased by 22.4% to 359.8 million euro and net income totalled 155.6 million euro, up from 33.8 million euro in 2005. Revenues amounted to 884.7 million euro, i.e. 27.1% more than in 2005. Foreign revenues increased by 68.4% to 605 million euro and accounted for 68% of the total. Revenues in Spain increased notably to 279.7 million euro.
Growth in the company's main operating and financial line-items was due to positive traffic performance on all toll roads, the entry into operation of projects that were under construction, and the addition of other new projects. Highlights:
- A notable increase in revenues coupled with cost containment at 407 ETR (Canada). - Commencement of operation of the Indiana Toll Road (USA)
- Opening to traffic of the new Ocaña-La Roda toll road in Spain
- Award of 14,823 new parking spaces by competitive tender - Full year operation of Chicago Skyway (USA) and the N4-N6 (Ireland)
- In Chile, full consolidation of the Talca-Chillán toll road and addition of the newly-acquired Bosque road,
- Commencement of traffic-based billing on Scut Norte-Litoral in Portugal
In addition to growth from the portfolio of existing projects, Cintra continued to bid for new projects in 2006:
- It bid for 11 toll roads.
- Six new toll road projects awarded, which represent a gross total investment of 7.5 billion euro: Indiana Toll Road, awarded in January and operational since July; segments 5 and 6 of SH 130, in Texas; the M3 motorway in Ireland; SCUT Azores (shadow toll) in Portugal; and the Ionia-Odos and Central Greece toll roads in Greece.
- Nine off-street car parks and a number of contracts to manage airport and on-street parking, all in Spain, which totalled 14,823 new parking spaces.
Every six months, Cintra performs an indicative valuation of its main assets. Assets in operation are valued by discounting future cash flow to the shareholder using assumptions that are coherent with the asset's past performance, and without factoring in potential upsides (e.g. releveraging, risk mitigation, etc.). The other assets are projects under construction or which have a short track record of operation and are included at book value; once they have a sufficient track record, they will be valued using discounted cash flow, which will very likely lead to an increase in their value. The indicative valuation at December 2006 is 7.193 billion euro, 13% more than in mid-2006.
I. Toll roads: higher traffic and new awards in Europe and the USA
Cintra's toll road area, excluding the parent companies, increased revenues by 31.6% to 741.6 million euro, 84% of the company's total revenues. Toll road EBITDA grew by 30.1% in 2006 to 555.7 million euro and accounted for 94% of total EBITDA. Canadian toll road 407 ETR made a notable contribution to this result (42% of Cintra's total), and its EBITDA increased by 17% due to strong revenue growth and containment of operating expenses (407 ETR's EBITDA margin increased by 3.1 points to 78.3% in 2006 ). Growth was also due to operation of Chicago Skyway and the N4-N6 for the full year, commencement of operation of the Indiana Toll Road, and the opening of the Ocaña-La Roda toll road in Madrid, among other factors.
The EBITDA margin in the toll road business, excluding the results of the parent companies, was 74.9%, with a considerable improvement at 407 ETR, Chicago Skyway and Radial 4. Traffic increased considerably on the main roads in the period:
- Canada : 407 ETR averaged 292,501 daily trips (+3%) and vehicle kilometres travelled (VKT) rose 2.9% to 2.124 billion. These increases, combined with a toll increase of almost 10%, boosted revenues by 13.4%. Traffic growth was particularly strong from September onwards after additional lanes were opened along 25 km of the road.
- USA : Chicago Skyway attained 50,514 vehicles per day, 4.3% more than in 2005, despite lanes being closed for upgrade work; the ITR attained an accumulated ADT of 34,282.
- Spain: Ausol I registered an average of 20,772 vehicles per day (+4%), while Ausol II carried an average of 19,782 (+8.2%); Radial 4 increased traffic by 37.4% in the period to 9,333 vehicles/day, while traffic on Autema increased by 9.9% to a daily average of over 21,529 vehicles. The Ocaña-La Roda road, which opened in late July, attained average daily traffic (ADT) of 4,298. The fact that traffic on the Spanish roads grew much more quickly in the second half of the year compared with the first half is indicative of the country's positive economic performance.
Highlights of the Toll Road division in the period:
- six new projects were awarded: - in the USA, operation and maintenance of the Indiana Toll Road (3.85 billion dollars for a 75-year concession); and the agreement to design, build and operate segments 5 & 6 of the SH-130, the first of the projects in the Trans Texas Corridor (1.3 billion dollars, 50-year concession).
- Selection as Preferred Tenderer to design, finance, build, operate and maintain the M3 toll road, between Clonee and North Kells in Ireland, under a 45-year concession (600 million euro).
- contract to design, build, refurbish, finance and operate a high-capacity road system on the island of São Miguel in the Azores (Portugal), under the shadow toll system (408 million euro, 30 years). Cintra will buy Ferrovial Infraestructuras' stake as soon as possible, subject to administrative authorisation.
- entrance into the Greek concession market with the contract to build, finance and operate the Ionian Roads project under a 30-year concession (1.16 billion euro, most of which is construction cost). Early in 2007, Cintra was awarded a second contract in Greece: to build, finance, operate and maintain the Central Greece Motorway (E65) (1.5 billion euro, 30 years).
- Acquisitions and divestments: - Termination of the agreement with Grupo Isolux regarding its tender offer for Europistas, and acceptance of Sacyr's offer for Europistas at a price of 9.15 euro per share, which generated a capital gain of 334 million euro for Cintra.
- Acquisition in April of an additional 10% of the R 4 toll road in Madrid (Cintra's direct stake now stands at 55%).
- Other notable events:- Canada: Friendly agreement with the Province of Ontario to settle all the legal disputes existing at the time. The 407 ETR built and opened an additional lane each way along 25 kilometres of road. Following that widening, the road registered an all-time record traffic of 423,434 trips on 6 October. In 2007, an extra lane each way will be built along another 25 kilometres of road.
- Portugal: commencement of traffic-based billing on Norte-Litoral; Ireland: opening of the N4-N6 in December 2005; and in Spain, opening of the new Ocaña-La Roda toll road.
- Chile: Full consolidation of the Talca-Chillán toll road since 1 May, after Cintra increased its stake in the road to 67.61%; and the addition of the Bosque toll road, which was acquired on 30 October.
II. Car parks: 6.5% increase in parking spaces, firmly establishing Cintra's lead in the market
Cintra's car park business registered 132.4 million euro in revenues in 2006, 10.5% more than in 2005, boosted by a significant increase in the number of managed parking spaces and, particularly, by the stronger contribution by pre-existing car parks.
At 2006 year-end, Cintra was managing 253,023 parking spaces, 14,823 more than at the end of 2005, which is a 6.2% increase and firmly establishes its leading position in the domestic market. The number of off-street parking spaces increased by 5.1% and now represents 26.4% of the total; on-street spaces increased by 7.9% to 159,271 (62.9% of the total); and private residents' parking spaces totalled 26,795, accounting for 10.6% of the total.
During the year, Cintra was awarded 9 off-street or hybrid parking management contracts, including notably the Okendo car park in San Sebastián, the Muelle de Delicias car park in Seville, and the Rambla del Celler car park in Sant Cugat. The company also obtained new car parks at AENA airports such as Valladolid, Pamplona and Murcia (over 2,000 parking spaces). In the area of on-street parking, Cintra obtained contracts in such cities as Valencia, Avila, Alcobendas, Noja, Medina Sidonia, Sagunto, La Jonquera, Berga, and Oropesa de Mar, as well as tow-truck concessions in Palma de Mallorca and San Fernando. The company was also actively involved in building car parks in 2006, with 14 projects under construction, most of which will come into service in 2007.
Cintra, one of the world's largest private-sector transport infrastructure developers Cintra, a subsidiary of Grupo Ferrovial, is one of the world's leading private-sector developers of transport infrastructure, with close to 14 billion euro in managed investments. Cintra manages 20 toll road concession companies throughout the world: 7 in Spain, 5 in Chile, 2 in the USA, 3 in Portugal, 1 in Ireland, 1 in Greece, and 1 in Canada (the 407 Express Toll Route, one of the world's largest toll road concessions). There are also four projects pending final award: in Italy (1), Ireland (1), Greece (1) and the USA (1). Additionally, one of the concessions in Portugal, the Azores project, will be transferred to Cintra by Ferrovial Infraestructuras once the necessary government permits are obtained. Cintra is also Spain's leading car park operator and manages over 250,000 parking spaces.
III. Tables
| Key figures
(million euro ) |
2006 |
2005 |
Var(%) |
| Revenues |
884.7 |
696.2 |
27.1 |
| EBITDA |
593.0 |
464.0 |
27.8 |
| EBIT |
359.8 |
293.9 |
22.4 |
| Net Income |
155.6 |
33.8 |
|
| Toll road traffic |
2006 |
2005 |
Var (%) |
| 407 ETR
VKT |
292,501
2,124 |
283,855
2,064 |
3.0
2.9 |
| Chicago Skyway |
50,514 |
48,241 |
4.3 |
| Ausol I |
20,772 |
19,973 |
4.0 |
| Ausol II |
20,020 |
18,286 |
8.2 |
| Autema |
21,529 |
19,230 |
9.9 |
| R4 |
9,333 |
6,791 |
37.4 |
| Scut Algarve |
19,099 |
18,677 |
2.3 |
| |
|
|
|
| Parking spaces |
253,023 |
238.200 |
6.2 |
