EBIT increased by 27.9% to 523.1 million euro:
EBITDA amounted to 745.1 million euro, i.e. 33.2% more
- Infrastructure and Services increased EBIT by 21%, to 56% of the total
- EBIT obtained outside Spain rose by 42% to represent 49% of the total
Revenues increased sharply, by 28.8%, to 5,245 million euro:
Growth is assured by the backlogs: Construction +12.7% to 7,762 million euro; Real Estate +7.4% to 1,136 million euro; and Services +34.5% to 7,746 million euro. Positive traffic performance (toll roads and airports) and an increase in the number of parking spaces (+13.3%)
- growth in all areas: construction (+22.8%), infrastructure (+19.6%), real estate (+14.4%) and services (+42.9%)
- overseas revenues increased by 56.4% to 2.550 billion euro and account for 49% of the total
Capital expenditure amounted to 3,081.5 million euro in the first half of 2006, five times the 1H05 figure
Madrid, 31 July 2006. Ferrovial ended the first half of 2006 with considerable growth in all lines of business and having made major progress with diversification into Services and Infrastructure divisions and other countries; nearly half of revenues and EBIT were obtained outside Spain. Net income in the period amounted to 237.4 million euro, i.e. 19.8% more than in 1H05.
EBIT increased by 27.9% to 523.1 million euro, boosted by growth in revenues and improved margins, mainly in Construction, Infrastructure and Real Estate. EBIT in the more recurring activities (Infrastructure and Services) grew by 21% year-on-year and now account for 56% of the total. Activities outside Spain contributed 49% of EBIT, after expanding by 56.4% in 1H06.
EBITDA increased 33.2% to 745.1 million euro.
Revenues totalled 5,254.7 million euro, a 28.8% increase, based on strong growth in all lines of business: Construction expanded by 22.8% due to good performance in Spain and Poland (Budimex) and the addition of Texas construction company Webber; Services (+42.9%) was boosted by the addition of Swissport (handling) and Owen Williams (UK) as well as strong organic growth both in Spain and abroad; Infrastructure (+19.6%) reflected good performance in its three segments (toll roads, car parks and airports) and the entry into service of new toll roads; and Real Estate (+14.4%).
International sales amounted to 2.550 billion euro (a 56.4% increase) and represented 49% of the company's total sales. In addition to the UK (18%), the other countries making the greatest contribution to Ferrovial revenues were Poland (7%), the rest of Europe (Ireland, Switzerland, Italy and Portugal: 14%) and North America (USA and Canada: 7%).
During the first half of 2006, gross capital expenditure reached a record 3,081.5 million euro, nearly five times the 1H05 figure (623 million euro). Capital expenditure in the period was mainly in Infrastructure, specifically to acquire UK airport company BAA (up to the end of June, 27.78% of BAA had been acquired at a cost of 2,563 million euro) and the Indiana Toll Road concession (302.9 million euro), among others; and Services, with the acquisition of Owen Williams (35 million euro). The Group also spent 157.9 million euro to buy land for real estate development.
As a result of these investments, the company had a net debt position of 3,317.3 million euro at 30 June 2006, representing 106% leverage.
Construction: positive performance in Spain and other countries, and improved margins
Rapid growth in Construction revenues, which rose 22.8% to 2,430.7 million euro, was due mainly to good performance in Spain and Poland (via subsidiary Budimex) and the addition of Webber (Texas).
This division's EBIT reached 123.2 million euro in the first half of 2006, a 35.1% increase, and the EBIT margin increased to 5.1% (4.6 % in 1H05).
The construction backlog increased by 12.7% to 7,762 million euro.
Polish subsidiary, Budimex, increased revenues by 23.9% to 324.1 million euro and expanded its backlog by 32.6% to 766 million euro. Webber contributed 166.5 million euro in revenues and 453 million euro in backlog.
Infrastructure: creating the world's largest infrastructure group
Revenues in the Infrastructure division, which comprises toll roads, airports and car parks, increased by 19.6% to 419.7 million euro, boosted mainly by good performance by the existing toll roads and airports, the entry into service of new toll roads, and a notable increase in the number of parking spaces under management.
EBIT in Infrastructure increased by 22.9% to 171 million euro, and the EBIT margin improved to 40.7%.
Traffic performance on the main toll roads plus the entry into service of new assets boosted toll road revenues by 23% to 322 million euro, with EBIT rising 21.8% to 233 million euro. Canadian toll road 407 ETR increased revenues by 22.5% and EBIT by 27.9% due to increases of 3.3% in vehicle numbers and 3.2% in the average distance travelled, despite raising tolls on 1 February (+8.7% at peak hours).
Highlights of this area in the period:
- Ferrovial strengthened its footprint in the US by commencing operation of the Indiana Toll Road (3.8 billion USD) and signing a concession agreement for sections 5 and 6 of State Highway 130, as part of the Trans-Texas Corridor (1.3 billion USD). In the United States, Cintra also has a 99-year concession to operate the Chicago Skyway and is strategic partner of the State of Texas in the development of the Trans-Texas Corridor.
- entrance into the Greek concession market after being selected as provisional contractor to design, build, finance and operate the Ionian Roads project under a 30-year concession (1,160 million euro).
Car park revenues increased by 9.2% to 64.3 million euro and the number of managed parking spaces increased by 13% year-on-year to 242,700. EBIT increased by 6.1% to 14.7 million euro.
The improvement in the airport business (revenues +11.7% and EBITDA +44%) was due mainly to strong growth in traffic, including a 10% increase at Bristol airport.
In June 2006, a consortium headed by Ferrovial took control of BAA, the world's largest airport management company, thereby becoming the world's leading private sector infrastructure operator.
On 17 July, the consortium, which comprises Ferrovial Infraestructuras, Caisse de Dépôt et Placement du Québec and an investment firm managed by GIC Special Investments Pte Ltd., attained 93.28% of the capital of BAA and commenced the process of delisting the UK company's shares and convertible bonds.
This acquisition is a further transformation of Ferrovial's business profile and its international presence, increasing both its size and profitability: once it has fully integrated BAA, Ferrovial's revenues will exceed 14 billion euro and its EBITDA will amount to over 3 billion euro, ranking it first among the world's infrastructure groups. The infrastructure and services businesses will then account for 60% of Ferrovial's revenues and 85% of its EBITDA, and it will obtain 60% of total revenues and 80% of total EBITDA outside Spain.
The offer, which was supported by the Board of Directors of BAA, amounted to 950.25 pence per share, including a dividend of 15.25 pence declared previously by BAA.
BAA is owner and manages 7 airports in the UK (Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton) which are used by close to 145 million passengers each year. BAA recently announced the acquisition of 75% of Budapest airport and has interests in Naples airport and in several airports in Australia and the USA.
Real estate: presales up 20% and backlog up 7.4% (1.136 billion euro)
Ferrovial's Real Estate business reported 14.4% growth in revenues in 1H06, to 435.8 million euro, boosted by the sale of the stake in the Omega business park in Madrid and land sales (Valdebebas, Madrid).
EBIT increased by 51.4% to 110 million euro and the EBIT margin reached 25.3% (19.1% in June 2005).
Pre-sales increased by 20% and the real estate backlog rose by 7.4% to 1.136 billion euro.
The company's land purchasing and management policy has changed as a result of a defensive strategy regarding real estate risk and maintaining the hurdle rate for investments. The purchase of more land for medium-term development and less fully-zoned land led to a 30% reduction in the number of homes for sale, which will have an impact on commercial sales in the coming months. The land bank is also being managed actively via sales.
Services: This area expanded rapidly, and overseas operations now account for 70% of revenues and 45% of EBIT
The Services area has established itself as the group's second-largest generator of revenues and EBIT: accounting for 39% and 24%, respectively, of the total.
The key figures in this area expanded rapidly; operations in other countries now account for close to 70% of revenues and 45% of EBIT. In 1H06, the Services area reported 2,056.3 million euro in revenues, a 42.9% increase, boosted by good performance in Spain and the UK and the consolidation of Swissport (handling) and Owen Williams. EBIT totalled 127 million euro, a 19.4% increase.
The Services backlog amounted to 7,746 million euro, 34.5% more than at the end of June 2005. The backlog does not include Tube Lines (maintenance of three London Underground lines for 30 years), which would increase the figure by approximately 14,632 million euro.
Through Amey, the Services division has consolidated its presence in the UK, a market which represents 44% of the division's total revenues (908.1 million euro, +4.5%) and slightly over half of its EBIT (60 million euro, +8.4%). Amey's backlog increased by 18.6% to 4,206 million euro. Handling company Swissport contributed 527.7 million euro in revenues in the period (26% of the Services division's total) and 9.4 million euro in EBIT.
Revenues in Spain increased by 8.9% to 620.5 million euro and EBIT by 12.9% to 57 million euro.
(amounts in million euro)
|Net financial debt
|Gross capital expenditure
|Real estate backlog
|Services backlog (*)
(*) Does not include the contract to maintain three lines of London Underground (Tube Lines).