Revenues grew by 15.8% to 1,024.7 million euro
The weight of the company’s international business increased again last year and now represents 77.7% of EBITDA and 69.2% of revenues
EBIT increased by 41.2% to 508.2 million euro
The indicative valuation of the principal assets as of December 2007 is 9,186 euro (19.6 euro per share), 27.9% more than in mid-2007
Cintra, the Ferrovial subsidiary that specialises in bidding for and managing toll roads and car parks, increased EBITDA by 17.0% in 2007 to 694 million euro. The weight of the company’s international business increased again last year and now represents 77.7% of EBITDA. Revenues grew by 15.8% to 1,024.7 million euro, primarily due to good traffic data, toll increases and the consolidation during the full year of new concessions, incorporated into the portfolio of assets in 2006. Toll road revenues grew by 17.1% to 881 million euro and car park revenues increased by 8.4% to 143.6 million euro. Last year, Cintra added 13,782 parking spaces to its portfolio.
Exchange rate fluctuation reduced consolidated revenues by 22.5 million euro. EBIT increased by 41.2% to 508.2 million euro due to the good operating performance of the different activities as well as the change in depreciation method for the toll roads; now, instead of applying straight-line depreciation, the company applies an increasing method based on estimates of traffic over the concession period. In 2007, Cintra invested a total of 199.6 million euro, and ended the year with a net cash position of 173.4 million euro, excluding debt without recourse to the parent company.
Net debt amounted to 8,569 million euro, slightly higher than in 2006. 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 2007 is 9,186 euro, 27.9% more than in mid-2007.
Toll roads: more traffic and new projects
The toll road business continued to show strong growth last year. Revenues increased by 17.1% to 881.1 million euro, EBITDA by 18.2% to 646 million euro, and EBIT by 43.7% to 477 million euro. The EBITDA margin increased from 72.7% to 73.4%. These improved figures are attributable to the growth of traffic on all roads (excluding Chicago Skyway and the M-45), toll increases on some roads, and changes in consolidation scope resulting from deals carried out in 2006, such as the addition of Indiana Toll Road (US), full consolidation of the Talca-Chillán road (Chile), acquisition of the Ruta del Bosque road (Chile) and the inauguration of the Ocaña-La Roda road (Spain). The 407 ETR (Canada) was responsible for 40% of revenues in 2007.
Its revenues increased by 11.1% due to good traffic performance, which rose 6.1% in terms of VKT, and a toll increase by 8.3% during peak hours and 8.4% for non-peak hours. In the last two years, 407 ETR has added 100 kilometers of new lanes, enabling it to reach a daily traffic record on 5 October with 455,822 trips.
Last year was also the first full year of consolidation of Indiana Toll Road, whose revenues increased by 84.4% (54.9 million euro), and whose EBITDA shot up 88% (40.5 million). Chicago Skyway’s revenue was affected by erratic traffic performance due to construction on the road and the Dan Ryan, as well as depreciation of the dollar against the euro. As a result, revenues decreased by 12.6% to 39.2 million euro (down just 4.7% in USD).
EBITDA fell 14.2% and EBIT increased by 38.7%. Chilean roads saw good traffic performance in 2007, with traffic increases of between 6.1% and 9.3%. Despite depreciation of the Chilean peso by 6.7%, revenues increased significantly by 29.5% to 167 million euro, while EBITDA rose by 32.6%. 2007 was the first full year in which the Talca-Chillán toll road and the Ruta del Bosque toll road (acquired in October 2006) were fully consolidated.
Other assets:
- Ausol’s revenues rose by 7% to 66 million euro and EBITDA by 17.6% to 59.1 million euro. Traffic increased 3.4% on Ausol I and 7% on Ausol II
- Autema increased revenues by 9.3% (43.9 million euro) and EBITDA by 11.1%. Traffic increased 10.9% and tolls by 3.35%.
- Radial 4’s revenues rose by 32.3% (25 million euro) and EBITDA by 72% (14.2 million euro). Traffic increased 24.1% primarily because the road is in the ramp-up phase.
- Ocaña-La Roda was consolidated for its first full year in 2007. Revenues increased by 172.6% to 18 million euro, while EBITDA shot up 164.1% to 8.7 million euro.
- The M-45 is a shadow toll road whose revenues depend on contractually-established traffic levels. Since traffic is exceeding this limit, the concession company is collecting the maximum revenues. Revenues grew last year by 5%, while EBITDA rose by 3.2% to 11.7 million euro.
- N4-N6 expanded revenues by 52% (23.5 million euro), and its EBITDA by 69% (16.8 million euro).
- Euroscut Algarve’s revenues rose by 4.6% to 35.3 million euro, while Euroscut Norte Litoral’s increased by 13.7%.
Highlights of the Toll Road division in the period:
a) Concession projects:
- Signature of the contract to design, finance, build and operate the Central Greece Motorway E-65 under a 30-year concession; the 231-km. project represents an investment of approximately 1.5 billion euro and is Cintra’s second in Greece.
- Signature of the concession contract for construction and operation of the 50 kilometre-long M-3 toll road in Ireland, for 45 years.
- Signature of the contract for construction and operation of segments 5 and 6 of Texas State Highway 130 (SH-130).
- Designation as “Best Value Proposer” (28 February) and decision by the Texas Transportation Commission (23 August) to cancel the award to the consortium headed by Cintra of the contract to build and operate the 41.6-kilometre SH-121 in Texas.
b) Corporate transactions:
- Transfer of the holding in Euroscut Açores from Ferrovial Infraestructuras to Cintra. Accordingly, since 24 October Cintra controls 89% of the concession company.
c) Other notable events:
- In March, the Ausol toll road debt was refinanced through a new, three-year, 486.8 million loan. The spread on the debt is 30 basis points less than on the old debt.
- On 2 October, 407 ETR announced an issue of senior debt (rated A by S&P and DBRS) amounting to 625 million Canadian dollars, maturing in 2010 and paying a 4.90% coupon. It was oversubscribed 2.1 times.
- In December the concession period began and the operational section of Ionian Roads toll road (Greece) was transferred.
Car parks: 13,782 new parking spaces added
Cintra’s car park business registered 143.6 million euro in revenues in 2007, 8.4% more than in 2006, boosted by a significant increase in the number of managed parking spaces and, particularly, by the stronger contribution by pre-existing car parks. At 2007 year-end, Cintra was managing 266,805 parking spaces, 13,782 more than at the end of 2006, which is a 5.4% increase.
The number of off-street parking spaces increased by 24.2% and now represents 31% of the total; on-street spaces increased by 1.7% to 156,603 (58% of the total); and private residents’ parking spaces totalled 27,008, accounting for 11% of the total.
In 2007, Cintra Aparcamientos was awarded the contract for off-street and mixed parking spaces for the Hospital and Passeig Nou car parks in Figueras, and the Hospital area car park in Pamplona, and it renewed the contract for the Pombo car park in Santander. Cintra Aparcamientos had a total of 29,000 spaces at the end of 2007 in the Spanish airport segment after being awarded the contract for car park management at the San Sebastián, Tenerife North and Lanzarote airports.
Cintra was awarded contracts for on-street parking management in 9 cities, including Vigo, Palma de Mallorca and Baracaldo. Cintra was awarded the contract for parking space management at Expo 2008 in Zaragoza (10,081 spaces in 2 car parks and the bus station).
