Without the extraordinary expenses deriving from the merger of the construction businesses, net profit would be up by 94%
Ferrovial ended the third quarter of 1999 with net profit attributable to the controlling company of Ptas 12.05 billion (Euros 72.4 million), an increase of 40% on the Ptas 8.62 billion of September 1998. If the extraordinary expenses deriving from the merger of the construction businesses is eliminated, net profit would have risen by 94%. Profit before tax amounted to Ptas 20.71 billion (Euros 124.5 million), up 54%.
The positive performance of the results of Grupo Ferrovials business is reflected in the 76.7% increase in operating income, which rose to Ptas 20.92 billion (Euros 125.8 million); with a share of 57% in this, businesses other than construction are gaining weight and notable amongst them are infrastructure concessions, which contributed 38% of the total. Ordinary income totaled Ptas 21.33 billion (Euros 128.2 million), an increase of 100%.
Consolidated sales amounted to Ptas 314.21 billion (Euros 1,888.5 million) in the third quarter of the year, 14% more than in September 1998, reflecting the growth in all the business divisions: sales rose by 7% in construction, by 28.8% in the real estate division, by 200% in infrastructure concessions and by 37.3% in services.
The rapid process of integrating the Groups construction businesses in Ferrovial Agromán produced non-recurrent extraordinary expenses of Ptas 4.63 billion (Euros 27.8 million) at the end of September 1999, which implies that over 90% of the costs of the merger foreseen for the whole year have been posted. The annual savings expected as a result of this integration process amount to between Ptas 4 and Ptas 5 billion (Euros 25-30 million), which will be obtained in their totality as from the year 2000. The saving to be obtained in 1999 is estimated at some Ptas 1 billion (Euros 6 million).
In 1999, Grupo Ferrovial has made a major investment effort, with investments amounting to Ptas 111.6 billion (Euros 670 million) in September 1999, outstripping the figure for the whole of business year 1998. By divisions, infrastructure concessions account for 60% of capital expenditure (Ptas 67 billion), which largely went to Canadas H407 Motorway and to the management of nine airports in Mexico.
Sharp increase in sales
All the business divisions present large increases in their sales figures: construction, with Ptas 263 billion, outstrips the figure for September 1998 by 7%. As of 30 September 1999, the construction backlog totaled Ptas 638 billion (Euros 3,838 million), a 7% increase on September 1998.
In the real estate business, sales totaled Ptas 21.5 billion, up 28.8%. The figure corresponding to committed sales amounts to Ptas 56.7 billion, 65% more than in September 1998 and outstripping the sales commitments for the whole of 1998.
Sales in the infrastructure concessions business, run by Cintra, rose by 200% to reach Ptas 21.48 billion (Euros 129.1 million) as of 30 September. In this business, motorways account for 60% of the total.
The most notable feature of this business is the long-term financing of 73% of the bridging loan obtained to purchase the concession of the H407 Motorway in Toronto. The loan amounts to Canadian $ 2.3 billion and was financed through bond issues, which received an “A” rating from Standard&Poors, in only 5 months, way below the 3-year period foreseen. It is estimated that the remainder of the financing will be closed in the first half of next year.
Sales in the services business rose sharply to reach Ptas 10.9 billion, 37.3% more than in the same period last year. The backlog of services totals Ptas 100.8 billion, 29% more than in September 1998.
