Ferrovial, the global infrastructure and cities operator, obtained 485 million euro in net profit in the first nine months of 2013
, a 2% improvement year-on-year. Revenues expanded by 4.9%, to 5.927 billion euro
, driven by growth in international activity, which increased by 14% year-on-year in 9M13 and today accounts for 68% of the total.EBITDA totalled 632 million euro
in the first nine months, compared with 658 million euro in the same period of 2012.
Ferrovial ended the third quarter with a combined Services and Construction backlog of 24.413 billion euro
, a record high in which international contracts predominate once again, accounting for 68% of the total (65% in Services and 73% in Construction).
These figures include the results of the two acquisitions by Services in 2013: 70% of Chilean company Steel Ingeniería (since March)
, and Enterprise (since April)
Between July and September 2013, the company obtained notable contracts in addition to those announced in previous quarters: expansion of the North Tarrant Express (NTE) in Texas, plus the contract to upgrade the motorway network in central Scotland, which was awarded to a consortium involving Cintra, Amey and Ferrovial Agroman. Other major new projects in Services include hospital cleaning in Madrid, and contracts to maintain roads and water and gas infrastructure in the UK. Ferrovial Agroman was awarded contracts to build two sections of road, in Oman and Colombia, and a cable-stayed bridge in Ontario.
EBITDA increased notably at the company's two main assets: by 11% at 407-ETR, in Canada, and by 22% at Heathrow airport, in London (in local currency terms in both cases), supported by higher tolls and fees, greater traffic, and cost control measures.
Services revenues expanded by 21%, and this area's backlog reached 15.917 billion euro, a new record for the division, due to the acquisition of Enterprise and the obtainment of new contracts. The Toll Road business increased revenues by 8.5% in the first nine months, supported by traffic numbers in North America. Construction performed well in international markets, especially in the US, where Webber increased revenues by 23%.
Sound financial position
At the end of 9M13, the net cash position (not including infrastructure project debt) amounted to 835 million euro
, after net capex of 621 million euro and dividend payments of 273 million euro. Including infrastructure projects, consolidated net debt totalled 6.076 billion euro. The increase with respect to December 2012 is mainly due to capex in connection with ongoing toll road construction in the US.
During the period, Ferrovial collected 355 million euro in dividends from its Toll Roads and Airports investments.
In addition to the divestments announced during the first nine months, Ferrovial reached an agreement on 22 October, after the end of the third quarter, to sell 8.65% of FGP Topco Ltd., the parent company of Heathrow Airport Holdings (HAH), to Universities Superannuation Scheme Limited (USS)
for 392 million pounds (463 million euro). As a result, and as will be visible in its annual results, Ferrovial's indirect stake in HAH is now 25%. The funds from the sale greatly enhance the company's flexibility to undertake new investments oriented towards international expansion.
As part of the company's long-term strategy of funding through the capital markets, Ferrovial successfully completed two 500 million euro bond issues, in January (5 years) and May (8 years), both paying a 3.375% coupon. The issues were oversubscribed 11- and 6-fold, respectively. The funds raised were used to optimise the corporate debt maturities calendar, reduce its cost and practically eliminate all bank debt. In May, Standard & Poors upgraded Ferrovial's investment grade rating to BBB.
Year-to-date, 407 ETR has issued two 40-year bonds, each for 200 million CAD. Following those two transactions, more than one-third of the toll road's debt matures at over 25 years.
Services : Revenues increase by 21% and the backlog reaches a record high
In the first nine months of 2013, Ferrovial Services expanded revenues by 21%, to 2.659 billion euro, and EBITDA was 212 million euro. The Services backlog reached an all-time high of 15.917 billion euro. This notable increase is attributable largely to the consolidation of Enterprise and Steel Ingeniería.
The business in the UK obtained revenues of 1.554 billion euro in the first nine months of 2013, an increase of 37% year-on-year, while Amey's EBITDA remained flat. The Services backlog in the UK totalled 10.159 billion euro, up 36%.
These good figures also reflect major contracts obtained recently in the UK. In the first half of 2013, the division obtained municipal services contracts in Liverpool and three London boroughs, as well the contract to build and operate a waste processing complex in Milton Keynes. It landed additional contracts in the third quarter, including notably road maintenance in East Anglia, water infrastructure management in Yorkshire and Wales, and the operation of a gas grid for Northern Gas.
Revenues in Spain were in line with the same period last year. New contracts include notably cleaning several hospitals belonging to the Madrid Health Service, street cleaning for Madrid city government, and facility maintenance for Iberia in Barajas airport. The Services backlog also reflects new contracts for the mining industry in Chile and maintenance of the S-7 expressway in Poland.
Toll Roads: revenues up 8.5%
Toll road revenues rose 8.5% with respect to last year, to 318 million euro. EBITDA totalled 200 million euro, down 12% due to the release in 2012 of 20 million euro in provisions for value added tax at Autema.
Canada's 407 ETR stood out in particular, with revenues increasing by 9.1% and EBITDA by 11%, both in local currency terms; this investment is equity-accounted. These figures reflect the combined effect of higher tolls as from 1 February, sound traffic performance, and more efficient management. Average revenues per trip increased by close to 8.9% with respect to 2012.
The US market continues to show positive signs. Traffic continues to recover on the Indiana Toll Road, having increased by 2% with respect to the same period of 2012, and Chicago Skyway revenues expanded by 11% in the first nine months of the year.
The general upward trend observed in Europe in recent quarters persisted, due to the economic situation. Traffic on the M4 in Ireland has been recovering steadily for the last six months, and the decline in traffic on Spanish toll roads decelerated.
The slight upswing in development activity by public administrations in North America, Europe, Australia and Latin Americapriority markets for Ferrovialpoint to an improvement in the outlook for the Toll Road business. Consortia led by Cintra are currently competing for several contracts, among them Interstate 77 in North Carolina, the SH 183 in Texas, and the second phase of the Highway 407 East Extension project in Canada.
Construction: international activities account for 76% of revenues
The Construction division obtained 2.943 billion euro in revenues (-7.1%) and 221 million euro in EBITDA (-8.2%) in the first nine months of 2013. Positive performance by the international business, especially in the US, partly offset the lower activity in Spain. International revenues accounted for 76% of the total in 9M13.
A total of 73% of the Construction backlog is outside Spain, related to the Crossrail project in the UK, and toll roads in Canada (407 East Extension), Texas (LBJ, NTE), and Virginia (US 460). The backlog amounts to 8.496 billion euro, which includes the contract to extend the NTE, worth around 735 million euro, after financial closure of the project was attained in September.
Consortia led by Ferrovial Agroman obtained notable contracts in the third quarter, including construction of the first cable-stayed bridge in Ontario (Canada), the highway connecting Medellín with the Pacific Ocean in Colombia, and the main section of a road linking Oman with the United Arab Emirates. In September, a consortium including Cadagua reached financial closure of a project to build and operate a desalination plant in Muscat, Oman.
As a result of the good pace of project execution in the US, Webber increased revenues by 23% and EBITDA by 24%.
There was a noticeable change in trend in Poland following the sharp contraction in public tenders in 2012 due to the temporary halt of European Union structural and cohesion funds. Based on the EU's new budget for 2014-2020, the Polish government announced a roads plan for which bidding will start in 2014.
The award of new projects since April enabled Budimex to maintain its backlog, which amounted to 1.144 billion euro at the end of September. Notable contracts include the construction of the A-4 and S8 roads, and a train line in Gdansk. Budimex reported revenues of 800 million euro in the first nine months.
Airports: HAH increases revenues by 12%
HAH attained 1.967 billion pounds in revenues, a 12% increase, while EBITDA amounted to 1.079 billion pounds, up 21%. A total of 64.5 million passengers used HAH's airports in the first nine months of 2013, i.e. 3.4% more than in the same period of 2012.
Heathrow Airport revenues expanded by 12%, to 1.832 billion pounds, and passenger traffic totalled 54.8 million, a 3.5% increase.
Traffic on European routes increased by a notable 5.7% year-on-year in 9M13. There was also a significant increase in most long-haul routes, especially Asia-Pacific and the Middle East, due to the availability of larger aircraft.
Heathrow received many accolades in 2013: it won "Best Airport of the Year" in the over 25 million passenger category at the ACI Europe Awards, and T5 was distinguished for the second year in a row as the world's best airport terminal at the prestigious Skytrax World Airports Awards.