- The construction and services backlog increased 22% with respect to December, to a record 22.871 billion euro. The international business increased its share of the backlog to 61%
- Ferrovial's international businesses continued to grow in the first six months of the year, accounting for 84% of EBITDA and 67% of revenues.
- Excluding infrastructure projects, net debt was 922 million euro in the period, compared with 1.809 billion euro in June 2009.
- The company refinanced 3.200 billion euro, confirming the market's confidence in high-quality assets.
- Traffic on the 407 ETR increased by 6% and revenues by 12% in comparable terms. In the first half of the year, revenues increased by 13.2% in International Construction, 5.9% at Swissport, 13.3% at Amey and 2.6% in the Airport division.
Ferrovial, a global infrastructure and services company, obtained EBITDA of 1.178 billion euro in the first half of 2010, i.e. an increase of 3% with respect to the same period of 2009 in like-for-like terms. Revenues totalled 5.766 billion euro, slightly higher (+0.4%) in like-for-like terms than the same period last year.
Net income improved by 41% year-on-year to -164 million euro. This figure reflects a negative accounting impact of 167 million euro resulting from various fair value adjustments, primarily due to the decline in Ferrovial's share price in June compared with the end of 2009 (from 8.23 euro to 5.35 euro) This effect does not entail any cash outflow.
Ferrovial ended the first six months of 2010 with a record construction and services backlog amounting to 22.871 billion euro, i.e. up 22% with respect to December 2009, ensuring future earnings visibility. The international backlog continues to gain in importance, accounting for 65% of the Construction division total and 58% in Services. International contracts now account for 61% of the total backlog.
The performance by the business divisions reflects signs of economic recovery. Traffic would have expanded by 2.3% in like-for-like terms at London's Heathrow Airport, while Canada's 407 ETR toll road registered 6% growth. The cargo volume handled by Swissport increased 36% and UK subsidiary Amey reported a 13% improvement in revenues.
Excluding infrastructure projects, consolidated debt also improved considerably, amounting to 922 million euro at the end of June 2010, compared with 1.809 billion euro in June 2009. Consolidated net debt totalled 24.485 billion euro, on par with June 2009 and 10% more than in December 2009. This increase is due to depreciation of the euro with respect to the pound sterling and the US and Canadian dollars.
In recent months, the company refinanced 3.200 billion euro, evidencing the market's confidence in Ferrovial's sound assets. Financing deals in the period included the LBJ highway in the US, the 407 ETR in Canada, and Ausol in Spain. Ferrovial's geographic and business diversification strategy has been maintained in recent years and is reflected in its income statement. The international business accounted for 67% of revenues and 84% of EBITDA.
Airports contributed 45% of EBITDA, Toll Roads 31%, Services 15% and Construction 9%. Ferrovial maintained its asset rotation policy in the first half of the year, selling BAA's stake in real estate company APP (244 million pounds) and divesting Tube Lines (206 million pounds). In July the company announced the sale of 50% of Trados 45, which manages a section of Madrid's M-45 highway, for 68 million euro.
Services: Swissport and Amey, robust growth
The Services division attained 1.896 billion euro in revenues in the first half of 2010, i.e. 4.7% more in like-for-like terms, while EBITDA amounted to 175 million euro, an increase of 3.3% like-for-like.
The backlog increased 14.6% to a record high of 11.426 billion euro. Swissport registered strong growth: in like-for-like terms, revenues increased by 5.9% to 616 million euro and EBITDA by 65% to 43 million euro. The Cargo business increased its contribution, handling 36% more tonnage. UK subsidiary Amey increased revenues by 13.3% like-for-like to 547 million euro.
The backlog amounted to 6.548 billion euro, up 29%, following attainment of a contract to maintain roads and other infrastructure in Birmingham. Business in Spain is proving to be very resilient in the current situation: revenues declined by 1.9% to 734 million euro and EBITDA by 4.5% to 95.5 million euro. The backlog (4.878 billion euro) was similar to last year's figure.
Toll roads: 407 ETR revenues expanded 12%
In like-for-like terms, toll road revenues rose 3.8% with respect to last year, amounting to 488 million euro. EBITDA increased by 6.8% in like-for-like terms to 361 million euro. Canadian toll road 407 ETR stood out in particular, with traffic increasing 6%.
Revenues (214 million euro) increased 30.9% in euro (12% proforma) and EBITDA rose 36% (16.7% proforma) to 175 million euro.
In Europe, the positive trend noted at the end of 2009 continued, although Spain is still registering declines, especially on roads whose traffic is closely linked to holiday travel, such as Radial 4 and Madrid-Levante. In Ireland, where Cintra recently inaugurated its second toll road, traffic has recovered quickly on the M4-M6 (+4.2% in 1H10).
Traffic on the Chilean toll roads expanded notably in the second quarter (between 8.7% and 14.2%) following the 27 February earthquake, which had led to losses in the first quarter. On 29 December, Cintra reached an agreement to sell 60% of its Chilean subsidiary to Colombian company ISA; the deal is expected to be completed in the second half of the year. On 11 March 2010, Cintra commenced steps with a view to selling 10% of the 407 ETR concession company.
The company is in the process of receiving binding offers. Financial closure for the LBJ highway (US), amounting to 2.800 billion euro, was completed in the first half of the year. This is Cintra's fifth venture in the US, where it manages investments worth 9.800 billion euro.
Construction: the international backlog expanded 60%
The Construction division obtained 2.049 billion euro in revenues and 105 million euro in EBITDA in the first half of 2010. The backlog at 30 June was a record 11.434 billion euro, up 30% due to international contracts including the LBJ highway in Texas and the new T2 terminal at Heathrow Airport.
The international business contributed revenues of 1.027 billion euro, i.e. 13.2% more like-for-like than in the first half of 2009, and EBITDA of 51 million euro, up 14.5% in proforma terms. The international backlog expanded by 60% to 7,429.9 million euro, i.e. accounting for 65% of the division total.
Polish subsidiary Budimex reported a 1.7% increase in revenues in proforma terms (to 367 million euro) and an 11.5% improvement in EBITDA (21 million euro). While the first quarter was affected by harsh weather conditions, activity revived in the second quarter with the commencement of major construction work, such as the A2 and A4 motorways.
US subsidiary Webber expanded revenues 8.5% like-for-like to 229 million euro; however, EBITDA declined 5.2% to 12 million euro due to the increasing trend towards subcontracting, contrasting with Webber's traditional approach of using its own resources. Operating profit, however, expanded 38.8% to 6 million euro.
In Spain, the decline seen in the first quarter (-22%) persisted due to a smaller volume of building and civil engineering projects. The backlog, which amounted to 4.014 billion, fell slightly (-4.1%) with respect to December. Revenues amounted to 1.030 billion euro and EBITDA to 55 million.
Airports: revenues and EBITDA increased despite the effects of the Icelandic volcano
Revenues at Ferrovial Aeropuertos totalled 1.282 billion euro, a 2.6% increase like-for-like, while EBITDA rose 3% to 528 million euro in proforma terms.
UK airport activity was affected during the period by the adverse weather conditions (specifically the eruption of the Icelandic volcano), which closed UK airspace from 15 to 20 April, and by the 34-day strike by British Airways employees in the first half of the year. Heathrow, the company's largest airport, reported a 3.5% decline in traffic (to 30 million passengers); under normal circumstances, it would have registered 2.3% growth.
A total of 50 million passengers used BAA's airports, i.e. 5.1% less. Retail revenues per passenger were notable, increasing 10.2% at regulated airports and 11.3% at Heathrow. Long-haul flights gained ground at UK airports, accounting for 35% of the total, compared with 21% at Spanish airports and 44% at European airports.
The new UK government announced a halt on new runway construction in southern England and, on 21 July, the Department for Transport commented that the upcoming economic regulation for airports does not include changes in the fixed tariff system at Heathrow and Stansted.
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