- Revenues expanded by 2.8% to 3.758 billion euro, supported by solid performance in the international businesses, which now account for 67% of the total. EBITDA amounted to 415 million euro.
- The company completed noteworthy transactions in the first half of 2013, including the acquisition of Enterprise in the UK and Steel Ingeniería in Chile, two bond issues, the sale of Stansted Airport, as well as landing major projects such as the NTE Extension in Texas.
- The backlog reached a new record high of 23.695 billion euro, supported by adjudications in the Services division after the integration of Enterprise as well as new contracts in the UK and Spain; 66% of the backlog is located outside Spain.
- 407 ETR and Heathrow Airport performed well, with notable improvements in sales and EBITDA. In the first half of 2013 Ferrovial collected 127 million euro in dividends from investments in Toll Roads and Airports.
- The net cash position (excluding infrastructure projects) was 427 million euro.
Ferrovial, the world-leading infrastructure and city operator, obtained 287 million euro in net profit
in the first six months of 2013, an improvement of 12% year-on-year.
EBITDA in the first half totalled 415 million euro
, compared with 439 million euro in the same period last year.
Revenues expanded by 2.8% in the period, to 3.758 billion euro
. Revenues outside Spain increased by 11.8% compared with the first half of 2012, to account for 67% of the total.
The company's main businesses outside Spain performed well and partly offset the decline in the domestic market. Ferrovial obtained notable adjudications, among them a contract to design, build, finance and operate the extension of the North Tarrant Express
in Texas. Other major contracts include street cleaning in Madrid, municipal services in London and Liverpool, the construction of a railway line in Poland, and the construction, operation and maintenance of a desalination plant in Oman.
Ferrovial ended the first six months of 2013 with a record Construction and Services backlog of 23.695 billion euro
, reflecting the growing prominence of international activity. International contracts accounted for 66% of the total backlog (64% in Services and 70% in Construction). EBITDA increased notably at the company's two main assets: by 10% at the 407 ETR
and by 18.2% at Heathrow Airport
(in local currency terms in both cases). Heathrow experienced a 2.4% increase in traffic in the first half.
Services expanded revenues by 17.7% at constant exchange rates and attaining a record backlog of 15.592 billion euro. This is broadly due to the acquisition of Enterprise
, one of the UK's leading providers of services to utilities and the public sector. Financial closure of this deal was achieved on 8 April 2013 and, therefore, this is the first time that it is consolidated in Amey's results. The company also began operating in services for the mining sector in Chile, following the acquisition of 70% of Steel Ingeniería
in March, and obtained other major contracts in Spain, the UK, Qatar, Portugal and Poland in recent months .
Toll Roads increased revenues by 10.8% like-for-like in the first half, while Construction performed well in North America and improved its prospects in Poland, where Budimex increased its backlog by 10.9% in like-for-like terms.
Robust financial position
At the end of June 2013, the net cash position (excluding infrastructure project debt) was 427 million euro. Including infrastructure projects, consolidated net debt totalled 6.460 billion euro. The increase in this item with respect to December 2012 is mainly attributable to capex on toll road construction in the US.
407 ETR increased its dividend to 230 million Canadian dollars in 1H13, while Heathrow Airport Holdings (HAH) distributed 128 million pounds to shareholders. These figures do not reflect the most recent dividend from 407 ETR, amounting to 200 million Canadian dollars, which was paid in July, i.e. after the end of the period. In the first half of 2013 Ferrovial collected 127 million euro in dividends from its investments in Toll Roads and Airports.
With regard to divestments, Heathrow Airport Holdings (HAH) completed the sale of Stansted airport to Manchester Airports Group (MAG) for 1.5 billion pounds. The deal provided Ferrovial with 138 million euro in capital gains.
Ferrovial Services UK subsidiary, Amey, sold 40% of the company that groups its PFI projects to Dutch mutual fund DIF for 37 million pounds in March. Amey maintains a 10% stake in that company and operates the contracts. Capital gains totalled 20 million euro.
As part of the company's long-term strategy of funding through the capital markets and early refinancing, in January and May Ferrovial successfully completed two 500 million euro corporate bond issues (the first at 5 years and the second at eight) with an annual coupon of 3.375%. Demand for the bonds was strong: they were oversubscribed 11 and 6 times, respectively. The funds were used to optimise the parent company's maturity calendar, reduce its funding cost and practically eliminate bank debt. In May, rating agency Standard & Poor's upgraded Ferrovial's investment grade rating to BBB.
Additionally, 407 ETR issued a 40-year 200 million Canadian dollar bond in the first half. Following this operation, more than one-third of the toll road's debt matures in over 25 years. The company does not have any major debt repayments until 2015.
Services: Sales increased by 18% and the backlog reached a new record high
Ferrovial Services increased its revenues by 17.7% at constant exchange rates, to 1.681 billion euro, and its EBITDA by 7.6%, to 138 million euro. The Services backlog is at a record high of 15.592 billion euro.
This notable improvement is primarily due to the inclusion of Enterprise's earnings. The acquisition of the UK company was completed on 8 April. The integration of Enterprise into Amey will create one of the most diversified companies in its sector, with over 21,000 employees and annual revenues in excess of 2 billion pounds.
Amey obtained revenues of 943 million euro in 1H13, an increase of 32.3% compared with 1H12, and EBITDA expanded by 18.2%. including Enterprise numbers on a proforma basis in both cases. The Services backlog in the UK amounted to 9.744 billion euro, up 37.5%.
These good figures also reflect the major contracts obtained recently in the UK, including municipal building maintenance in three London boroughs, street maintenance and cleaning in Liverpool, and the design, construction and operation of a waste treatment complex in Milton Keynes.
Revenues in Spain were in line with the same period of 2012. The company also commenced new contracts, including health centre maintenance in the Madrid region, maintenance of Telefónica's Data Processing Centre
, and street cleaning in Madrid.
The Services backlog also reflects the commencement of activity in services for the mining sector in Chile, following the acquisition of 70% of Steel Ingeniería in March; the first adjudications in Poland to maintain roads and buildings; and renewal of a waste collection contract in Portugal. Ferrovial Services activities outside the UK and Spain contributed 189 million euro to the backlog.
Toll roads: revenues up 11%
Toll Road revenues rose by 10.8% with respect to the same period last year, to 206 million euro. EBITDA totalled 125 million euro, a decline of 17% due to the release in 2012 of 20 million euro in provisions at Autema in connection with VAT.
Canada's 407 ETR, which is equity-accounted, stood out in particular, with revenues increasing by 7.8% and EBITDA by 10.3%, both in local currency terms. These figures reflect higher tolls since 1 February, sound traffic performance, and improvements in efficiency. Average tolls per trip increased by more than 9% with respect to 2012.
In the US, traffic continued to recover on the Indiana Toll Road, while heavy vehicle traffic improved on the recently inaugurated SH 130 following an agreement with local authorities to reduce tolls. Traffic remained stable on the
Chicago Skyway despite an average 17.5% increase in tolls in January. This increased revenues by 12.7% in the first half of 2013
The trend in Europe in recent quarters persisted, due to the economic situation and the higher price of fuel. However, there are clear signs of a recovery in traffic on the M4 in Ireland, in line with economic improvements there.
The slight rebound in development by public administrations in some of Ferrovial's priority markets suggest an improvement in the outlook for the Toll Road business. Consortia including Cintra are currently bidding on several contracts, including the contract to upgrade the M8, M73 and M74 in Scotland, and the second phase of the 407 ETR East Extension in Canada.
Construction: 75% of revenues comes from outside Spain
The Construction division obtained 1.859 billion euro in revenues and 155 million euro in EBITDA, a decline of 7.8% and 4%, respectively, in proforma terms. Positive performance by the international business, especially in the US, partly offset the lower activity in Spain. International revenues accounted for 75% of the total in the first half of the year.
A total of 70% of the backlog is located outside Spain, in such projects as Crossrail in the UK, and toll roads in Canada (407 East Extension), Texas (LBJ, NTE) and Virginia (US 460). The backlog declined by 6.1% in proforma terms, to 8.102 billion euro (not including the 760 million euro contract to extend the NTE, which is pending financial closure).
Webber's revenues expanded by 27% and EBITDA by 66%, both in proforma terms, due to the greater level of execution of the LBJ and NTE toll roads in Texas.
Ferrovial's growing presence in North America is positioning it as a leader in the development of highly-complex projects.
Poland saw a change in trend following the notable decline in public tenders in 2012. The adjudication of new projects between April and June increased Budimex's backlog to 1.249 billion euro, an improvement of 10.9% in proforma terms with respect to the same period of 2012. Recent contracts include the construction of a section of the A4 highway and a new train line in Gda?sk. Budimex revenues totalled 476 million euro in 1H13.
Airports: HAH revenues increase by 10%
HAH attained 1.230 billion pounds in revenues, a 10.2% increase, while EBITDA amounted to 633 million pounds, a 17.3% increase (both in proforma terms). In Heathrow Airport, revenues amounted to 1.147 billion pounds, a 10.9% increase Traffic increased by 2.4% to 34.4 million passengers.
Heathrow was recently named Best Airport in 2013 at the ACI Europe Awards in the "Over 25 million passenger" category. Terminal 5 was named the world's Best Airport terminal by the prestigious Skytrax World Airports Awards for the second year in a row.
There was a notable increase in traffic on most long-haul routes, including the Middle East, the Far East, and America, due to the use of larger aircraft. A total of 40.2 million passengers used HAH's airports in the first half of 2013.
|Net capital expenditure
|Consolidated net debt
|Net debt excl. infra. projects
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