- The recovery in traffic was confirmed in the third quarter at both Ferrovial Aeropuertos and Cintra. Heathrow airport saw passenger numbers rise between June and September, while Chicago Skyway saw increased traffic for the seventh consecutive month, and the Canadian toll road 407 ETR ended the quarter with a negligible decline.
- EBITDA in the Airports division (i.e. BAA) increased by 20% in local currency terms due to higher fees, greater retail sales per passenger and a reduction in operating costs.
- The international construction division continues to attain double-digit growth in EBITDA (+20.7%), supported by the performance of Budimex (Poland) and Webber (USA).
- Amey registered a solid 5.1% increase in EBITDA in local currency terms.
- Net income (-206 million euro) was shaped by a 369 million euro fair value adjustment, meaning an extraordinary impact. Excluding the sale of Gatwick, net income would have been positive: 163 million euro.
Madrid, 29 October 2009. Ferrovial’s EBITDA amounted to 1.946 billion euro in the first 9 months of 2009, (+7.4% in like-for-like terms) while EBIT increased by 6.9% to 1.183 billion euro. Likewise, it obtained revenues of 9.045 billion euro, just 2% less excluding exchange rate fluctuations.
In this period there has been a notable recovery in traffic levels for the principal assets of the company, positive results in the international construction division and sustainable growth in Amey. BAA increased EBITDA by 20% in local currency terms, bringing its margin to 50% in the third quarter. The international construction division increased EBITDA by 20% in like-for-like terms, supported by good performance at Budimex and Webber. Amey also increased EBITDA by a notable 5.1%.
Net income was affected by fair value adjustments amounting to 369 million euro (no cash impact) and the fact that capital gains on asset divestitures were comparatively lower than in 2008. The adjustments are due to marking financial hedging instruments to market and from recognizing impairment of certain BAA assets. Excluding those factors, net income would have been 163 million euro, contrasting with the reported loss of 206 million euro.
Ferrovial’s geographic and business diversification strategy has been maintained in recent years and is reflected in its income statement. International business accounted for 65% of revenues and 84% of EBITDA respectively.
The Airports division contributed approximately 53% of EBITDA, Toll Roads 25%, Services 13% and Construction 9%.
Consolidated net debt amounted to 22.203 billion euro, compared with 21.178 billion euro at 2008 year-end. Excluding infrastructure projects, net debt amounted to 1.632 billion euro. As part of the company’s strategy to simplify its financial structure, on 30 June Ferrovial arranged a 3-year 3.300 billion euro syndicated loan with 35 banks. The loan will be closed once the merger with Cintra is completed (scheduled for early December).
On 20 October, Ferrovial’s Shareholders’ Meeting approved the merger with Cintra, the toll road subsidiary; Cintra’s shareholders approved the transaction on 22 October. The merger will create a leader in the fields of transport infrastructure and services, with a presence in 49 countries and close to 107,000 employees.
Airports: Recovery of air traffic
BAAs results have been marked by a recovery in air traffic, particularly at Heathrow. Heathrow airport is performing well: its traffic fell just 2.3% in the first nine months, which is much lower than the other major European airports. In the third quarter it even managed to record growth of 0.3%. Heathrow, the UKs largest airport, attained 1,231.2 million pounds in revenues and 554.9 million pounds in EBITDA. BAAs passenger numbers reached 111.1 million in the first nine months of the year, and traffic performance has improved steadily as the year progressed. In the third quarter, traffic was down 3% compared to 10% in the first quarter.
BAA’s revenues amounted to 2,346.2 million euro in the first nine months of 2009, an 8.9% increase in like-for-like terms (i.e. at constant exchange rates). EBITDA in the period amounted to 1,045.6 million euro, 20.4% more in like-for-like terms.
This increase was due mainly to the increase in fees at Heathrow and Gatwick on 1 April, higher retail sales per passenger (+6.1% at the London airports) and a reduction in operating costs.
On 21 October 2009, it was agreed to sell Gatwick to Global Infrastructure Partnership for 1.510 billion pounds (1.657 billion euro). The transaction will be completed on 3 December. The sale will enable BAA to reduce net debt and strengthen its financial position.
Toll Roads: Merger with Ferrovial, and sale of the car parks business
Cintra obtained 726.8 million euro in revenues between January and September, in line with the same period of 2008, in like-for-like terms. EBITDA amounted to 484.9 million euro, while EBIT increased by 9.4% to 403 million euro.
Traffic performance was affected by the world economic situation. Nevertheless, the pace of decline has slowed as the year advanced. Chicago Skyway has had seven consecutive months of growth, while 407 ETR’s 3Q09 figures were almost the same as last year (-0.6%).
On 24 October, the Extraordinary Shareholders’ Meeting approved the merger with Grupo Ferrovial. This transaction will foreseeably be completed early in December.
Notable events in 2009 include the refinancing of all the debt that matures this year, reflecting the quality of this division’s assets.
Cintra has been awarded three new concessions that represent an investment of close to 5 billion euro: the A1 in Poland, and the North Tarrant Express and IH-635 in Texas in the U.S.
As part of the plan to rotate mature assets, the car parks business was sold on 27 July for 451 million euro.
Services: Backlog rose to 9.931 billion euro
The Services division is performing very strongly in 2009. Revenues through September amounted to 2,736.3 million euro, just 3.4% lower. Revenues were actually stable at constant exchange rates (60% of revenues are obtained in currencies other than the euro, 25% in pounds sterling).
EBITDA amounted to 251 million euro and EBIT to 160.3 million euro. Profits margins were similar to 2008.
At the end of the quarter, the backlog had increased by 8.8% to 9.931 billion euro. Amey’s backlog increased by 21.8% in pounds sterling, while Ferrovial Servicios in Spain registered a 9.9% increase.
By business, Amey increased revenues by 7% to 675.4 million pounds, and EBITDA by 5.1% to 53.3 million pounds.
Swissport increased its EBITDA by 1.1% to 49.9 million euro on revenues of 837 million euro. Gross profit margin for the airport handling company has grown significantly over the year and in the third quarter amounted to 8.8%.
Revenues in Spain amounted to 1,136.2 million euro (-1.3%), while EBITDA was 140.9 million euro (-2.7%).
Construction: International activity registered double-digit growth
Construction obtained 3,351.5 million euro in revenues and 181.3 million euro in EBITDA in the first nine months of the year. At the end of September, the backlog amounted to 7.994 billion euro, 44% of which was from outside Spain.
International activity continues to grow rapidly in 2009. Revenues increased by 8.6% in like-for-like terms, to 1,423.4 million euro. This figure represents 42% of the division’s revenues, i.e. four percentage points more than a year ago.EBITDA increased by 20.7% in pro forma terms to 71.6 million euro.
In Poland, Budimex obtained 537.5 million euro in revenues. EBITDA increased to 30.6 million euro, and the backlog expanded by 50% in like-for-like terms to 1,100.5 million euro. In the US, Webber’s revenues increased by 30.6% to 327.1 million euro, while its EBITDA rose 33.7% to 17.5 million euro. The backlog amounted to 523 million euro at the end of the quarter.
Construction revenues in Spain amounted to 1,952.4 million euro, and the backlog was 4,507.6 million euro. The backlog was reduced by 10% due to the reduction in new building contracts in 2008 and the lower volume of civil engineering work in 2009. Moreover, the company maintains its policy of selective bidding in order to maintain returns and not impair working capital.
FERROVIAL
Ferrovial is one of the world’s leading infrastructure groups, with over 100,000 employees, a presence in 49 countries and operations in a range of complementary industries such as construction, airport and toll road management and maintenance, and municipal services. The company owns two of the world’s leading private transport infrastructures: Heathrow airport, in London, and 407 Express Toll Route, in Toronto. Over 60% of Ferrovial’s revenues come from outside Spain, mainly from other OECD countries. The company, which is listed on the Madrid Stock Exchange, is a member of the prestigious Dow Jones Sustainability Indices and FTSE4Good.
