Ferrovials net profit rose 12% to 137.3 million euros in the first half

Press releases

Including the extraordinary effect of the sale of 40% of Cintra in the first quarter of 2002, net profit would have fallen 58%

Operating profit grew 27.7% to 278.4 million euros and the operating margin was 11.6% vs. 9.4% in June 2002

Consolidated revenues reached 2,408.6 million euros, up 4.2%: Construction (-2.9%), Infrastructure (+17.8%), Real Estate (+20.2%) and Services (+24.1%)

The Construction backlog was 6,126 million euros; the Real Estate backlog was 924 million euros and the Services backlog was 866 million euros.

Gross investment in the period amounted to 226 million euros.

The acquisition of British services company Amey, Belfast City Airport and the signing of the N4/N6 toll road concession in Ireland were among the most significant operations in the period

Madrid, 29 July 2003. Ferrovial´s net profit rose 11.9% in the first half of 2003, to 137.3 million euros. Including the effect of the extraordinary revenues generated by the sale of 40% of Cintra (Ferrovial´s toll road concessions subsidiary) in the first quarter of 2002, net profit would have fallen 58%.

Between January and June 2003, most business areas continued to expand, with good performance in margins and the main operating aggregates (backlog and toll road traffic), guaranteeing activity in the coming months.

Operating profit grew 27.7% to 278.4 million euros and the operating margin was 11.6% vs. 9.4% in June 2002. Non-construction activities represented 74% of total operating profit.

Net revenues were 2,408.6 million euros at June 2003, up 4.2% year-on-year (excluding the negative exchange rate effect, net revenue would have risen by 7.6%). By business area, Construction suffered a downturn in revenues (-2.9%), due mainly to the negative impact of the appreciation of the euro.

Good performance by domestic toll roads and opening to traffic of new toll roads meant that Infrastructure division revenues grew 17.8%. Revenues were up 20.2% in Real Estate and 24.1% in Services.

At June 2003, foreign revenues were 519 million euros and represented 22% of total revenues, with notable contributions from Portugal, Poland, Canada and Chile.

Gross investment amounted to 226.1 million euros, mainly in Services (acquisition of Amey) and Infrastructure (Belfast City Airport concession, among others). Additionally, a further 255 million euros investment was made to acquire land for property development.

At June 2003, net debt amounted to 196 million euros, contrasting with 122 million euros in net cash at June 2002, representing 12% leverage.

Construction and Infrastructure
The Construction division registered a 2.9% fall in revenues to 1,663.9 million euros in the first half, due to the negative exchange rate effect from the appreciation of the euro (excluding this effect, revenues would have risen 1%) and the comparative effect of the strong pace of production in 2002 (execution of construction work on concessions) (construction in Spain grew 24% in the first half of 2002, compared to the current 4%). At June 30, the construction backlog amounted to 6,126 million euros, up 0.1% and covering 22 months. Year-to-date growth is 3.5%.

Despite the negative effect of the exchange rate on concessions in other countries, the Infrastructure division posted 17.8% growth in revenues, to 239.8 million euros, with strong growth in revenues from Spanish toll roads (Autema +10% and Ausol I +34%) and the integration of the M-45 and Ausol II (Estepona-Guadiaro section) toll roads during the entire half-year (which were opened to traffic in May 2002 and August 2002, respectively).

Ferrovial strengthened its presence in the airport market in the UK in May 2003 by acquiring a 125-year operating concession for Belfast City Airport (BCA) in Northern Ireland. The N4/N6 Kinnegad Kilcock Motorway concession (Ireland) was also signed in the period.

The 30-year concession, the first in Ireland to be privately managed and financed, represents a total investment of 400 million euros.

The 407 Express Toll Route (ETR) in Canada -the world´s first all-electronic toll road with fully-deregulated tolls- applied its first unrestricted toll increase in February (between 5% and 25%). The traffic response in the first half of the year was positive: revenues grew 11% in local currency (but fell 2% when translated to euros, due to appreciation by the euro).

Significant increases in Real Estate and Services divisions
There was also significant growth in the Real Estate division, with a 20.2% increase in revenues to 380.5 million euros, as a result of the strong pace of home deliveries. Realty brokerage (Don Piso) revenues grew 38%.

The real estate backlog amounted to 924 million euros (+7.6%), guaranteeing revenues for the next 18 months, and year-to-date pre-sales grew 12% to 333 million euros.

Services division revenues grew 24.1% to 194.2 million euros and the backlog amounted to 866 million euros, 6.7% up on June 2002.

There was a significant improvement in the operating margin (5.2% vs. 4.4% in June 2002) as a result of the restructuring of acquisitions made in recent years.

In May, Ferrovial took over British services company Amey with an investment of 114 million euros. Amey will be consolidated in the Services division from 1 July 2003. Following Amey´s full consolidation, Service division revenues will account for 25% of the Group´s total revenues (vs. 7% currently) and the Services backlog will be five times greater than at present.


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