- International business contributed 6,866m to revenues, 65% of the total.
- Net consolidated debt declined by 1,625m.
- Gross consolidated investment reached 943m, principally in BAA and Cintra.
- At the Construction division, the growth in the backlog was driven by international business, which represented more than 40% of the total.
Ferrovial reported revenues of 10,518.9m in the first nine months of 2008, reflecting euro appreciation against other benchmark currencies, variations in the consolidation perimeter after the asset sales of 2007 and 2008. On a like-for-like basis, net revenues would have increased 6.3% compared with the same period last year.
Ferrovials EBITDA for the nine months reached 2,118.1m. Total net income lies at 41.7m, reflecting the accounting (non-cash) impact of the market valuation of the financial instruments used to hedge against interest-rate movements, inflation and the share price (derivatives). On top of this, costs and depreciation were higher at BAA, which were in line with the companys own forecasts.
Gross consolidated investment reached 943.7m. Most of this investment was in the Airports division due to ADIL, BAAs investment vehicle. Also, Ferrovial invested 105m in buying shares in Cintra, 60m in buying treasury stock and 104m in buying land in Valdebebas.
In the year to September, Ferrovials international businesses made a revenue contribution of 6,866.7m, or 65% of the total. The remaining 3,652.2m corresponded to Spain. Ferrovials diversification strategy over the last few years is reflected in the profit and loss account. Airports, Services and Toll Roads and Parking represent 89% of the EBITDA. Construction represents 11% of the total (226.5m).
Backlog growth at Ferrovials various subsidiaries continued to expand between January and September, laying the foundations for future growth. Excluding Tube Lines, Services closed the third quarter with a backlog of 9,944m, or YOY growth of 4.3%, of which 50% was generated outside Spain. Meanwhile, the Construction backlog reached 9,222m, up 4.8%. The profitable diversification initiated several years ago in this division has resulted in the international contribution representing 41% of the backlog.
Refinancing complete
The refinancing of BAAs debt was completed in August. This process cut the average cost of BAAs debt from 7.8% to 7.5%. This cost will fall further as draw-downs on bank loans are repaid. The refinancing guarantees BAAs investment plans, as it makes available to the airport management company capex lines of more than £2,700m.
The refinancing process involves the migration of the existing bonds and the substitution of the acquisition debt with new bank debt that will be repaid with future bond issues and asset disposals, such as Gatwick airport.
The debt, excluding that associated to infrastructure projects, stood at 2,385.8m at the close of the third quarter of 2008. Net consolidated debt amounted to 28,639.1m, which is 5.4% (or 1,624.7m) lower than 12 months previously.
Airport: revenues of 2,555
In the year to September, revenues at the Airports division (2, 555.3) were affected by movements in the sterling/euro exchange rate (15.6%), investment in the opening of Heathrows T5 and changes in the consolidation perimeter after the disposal of assets such as WDF, APP, Budapest and Australia. Excluding those elements, BAAs revenues would have risen 14.6%.
The airport management companys EBITDA reached 1,042.5m and EBIT 398.1m. The number of passengers handled by BAA airports totalled 117.9 million in the first nine months of the year. Traffic trends in the UK indicate growth in international flights, which are more profitable and have higher load-factors.
One of the key events of 2008 was the publication of the new tariffs for Heathrow and Gatwick airports for the next five-year period, which came into effect on 1 April. Heathrow charges £12.8 per passenger this year, and has authorisation to increase the tariff by inflation +7.5% for the next four years. Meanwhile, Gatwick charges £6.79 per passenger this year and has authorisation to increase its tariff by inflation +2% every year for the next four years.
Tollroads and Parking: EBITDA growth of 4.9%
Toll Motorway and Parking revenues increased 5.3% in the first nine months of the year to 806.9m. EBITDA reached 545.9m, an improvement of 4.9%. Excluding exchange rates, revenues and EBITDA grew 8.8% and 8.9% respectively.
The Canadian motorway 407-ETR, the biggest revenue generator at Cintra, reported net turnover of 266.1m, an increase of 2.8%, and EBITDA up 4.2% to 213.4m. During the period, there was also strong EBITDA growth at the Chicago Skyway (10.1%), the Chilean motorways (9%), OcañaLa Roda (29.3%) and the M4-M6 in Ireland (9%).
Other highlights of the first nine months of 2008 included the start of operations on a section of the Ionian Roads toll motorway, handed over by the Greek State on 10 January, since when tolls have been collected by the concession. Cintra, which owns 33.34% of the concession, included 8m from the Greek motorway in its consolidated turnover.
At the Parking division, revenues improved 1.4% to 107m, thanks to the increase in the number of spaces under management (+16.9%). The division closed September with 301,122 parking spaces.
Services: revenues of 3,470,1m
In the first nine months of the year the performance of the Services division reflected the impact of euro appreciation, as 60% of sales are in currencies other than the euro. Revenues reached 3,470.1m, up 1.9%, and EBITDA 323.6m. Excluding exchange rates, revenues grew 9.8%. The backlog at this division expanded 4.3% to 9,944.3m.
Business outside Spain represents nearly 66% of revenues at Ferrovial Servicios and 47% of its EBITDA. The UK subsidiary, Amey, boosted sales by 11.9% in sterling terms. Excluding Tube Lines, the backlog reached £3,949.7m, an increase of 13.8%.
The airport handling operator Swissport posted revenue growth of 1.7% to 879.4m and EBITDA growth of 11% to 49.1m.
In recent months, Swissport has announced new business such as the licence to operate in ten South African airports for the next five years (extendable for a further five years); an agreement with Virgin Atlantic for global cargo planning services; the cargo contract at Vienna airport; an extension of its services in Kiev; the introduction of new solutions at Paris Charles de Gaulle; and new contract wins at Athens airport. Finally, Swissport has reorganised its presence in the Indian and Filipino markets to take advantage of new business opportunities.
In the Spanish market, revenues at the Services division increased 8.9% to 1,185.8m. The backlog in Spain grew to 4,902.5m, an increase of 11.2%.
Construction: the backlog reached 9,222m
In the first nine months of the year, revenues at the Construction division reached 3,781.3m, similar to last year. EBITDA reached 226.5m, and margins were at similar levels to the same period last year. The growing contribution of international business is notable, with revenue, results and backlog growth in double figures. Business outside Spain represents 38% of revenues and 41% of the construction backlog.
At the end of September, the backlog stood at 9,222.4m (+4.8%). This increase guarantees the visibility of results for the next few years. The international backlog has grown 23% in this period. There were important new contract wins in various international markets, which accounted for more than 40% of the total.
The weighting of international business in the order book has increased from 3,034.5m to 3,746.2m (+23.5%) in the space of a year. In Poland, Budimex posted substantial revenue growth of 19% to 737.5m. The backlog reached 906.3m vs. 875.8m in the same period last year. In the USA, Webber has increased revenues by 10.5%, to 250.5m and the backlog reached 763.2m (+23.2%).
Due to the slowdown in activity in the Spanish market vs. the same period last year, during which a number of important contracts were completed, revenues in Spain slipped 10.7%. The backlog stands at 5,476m.
Principal Magnitudes Jan-Sep 2008
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