- Ferrovial reported solid business performance in 2015, with 10% growth in revenues to 9.7 billion euro and a 4.5% increase in EBITDA to 1.027 billion euro.
- The principal assets maintained their robust performance: 407 ETR and Heathrow Airport continued to increase traffic, revenues and EBITDA. Traffic on the NTE and LBJ, the new managed lanes projects in Texas, is exceeding expectations.
- The total backlog remains at record highs—31.5 billion euro—of which 75% corresponds to international business. Ferrovial landed additional contracts in core markets, such as the US, the UK, Poland and Canada, and also in new markets, such as Australia and Colombia.
- Dividends from Airports and Toll Roads assets amounted to 399 million euro; combined with cash flow in Services and Construction, they raised operating cash flow to 889 million euro.
- The total shareholder return was 31% in 2015, and shareholder remuneration increased by 4.4%.
Ferrovial, a global manager of infrastructure and services for cities, obtained 720 million euro in net profit in 2015, an increase of 79% on the 402 million euro reported in 2014. Revenues totalled 9.700 billion euro, a 10% increase, while EBITDA rose 4.5% to 1.027 billion euro.
These numbers are the result of good business performance, including outstanding growth in airport and toll road traffic and a considerable increase in Toll Road and Construction revenues and EBITDA. International revenues increased by 15% to account for 72% of the total. Net profit was boosted by the sale and deconsolidation of toll roads, including the Indiana Toll Road, among other extraordinary items. However, revenues from asset rotation transactions, such as the sale of Chicago Skyway and the M3 and M4 toll roads in Ireland, are not included as the deals have not yet been closed.
The backlog reached a record of over 31.500 billion euro, of which 22.800 billion relate to Services and 8.731 to Construction. International exposure expanded in 2015 to 75% of the total (73% in Services and 81% in Construction). The company obtained contracts such as the Toowoomba toll road, in Australia; the Ruta del Cacao toll road, in Colombia; the I-285, in Atlanta; a new extension to 407 ETR, in Toronto; the Thames Tideway Tunnel, in London; and a waste treatment contract on the Isle of Wight.
Financial strength
Ferrovial ended 2015 with a net cash position (excluding infrastructure project debt) of 1.514 billion euro. Consolidated net debt amounted to 4.542 billion euro, compared with 6.230 billion euro in 2014. This decline is due mainly to reclassification of Chicago Skyway and the Irish toll roads as available for sale, and deconsolidation of the R4 and AP36 toll roads.
The company, which does not have significant debt maturities until 2018, maintains a policy of reducing interest expenses and extending debt maturities. Ferrovial expanded and extended its liquidity line from 22 banks to 1.250 billion euro for a term of 5 years with a possible 2-year extension, while the spread was reduced to 50 points. Additionally, Heathrow, 407 ETR and the A-66 Benavente-Zamora toll road issued bonds.
Fitch and Standard & Poor’s maintained an investment grade rating for Ferrovial’s corporate debt: BBB, outlook stable.
Steady growth by the main assets
The company’s two main assets—Canadian toll road 407 ETR and Heathrow Airport—maintained strong growth in revenues, EBITDA and traffic. 407 ETR increased revenues by 13% and EBITDA by 14% in local currency terms. Traffic increased by 3.3%, boosted by growth in the number of trips and distances travelled. These numbers were driven mainly by the improved economy and the decline in oil prices. The road beat its daily trip record twice during the year, exceeding 460,000 trips. 407 ETR distributed 750 million Canadian dollars in dividends. Ferrovial collected 242 million euro for its stake in this asset.
Heathrow Airport set another traffic record: 75 million passengers, 2.2% more than in 2014. The increase was due mainly to the use of larger aircraft. Traffic growth drove a 2.8% increase in revenues to 2.767 billion pounds, and a 19.7% increase in EBITDA to 1.845 billion pounds. As a result, this company distributed 300 million pounds in ordinary dividends, of which Ferrovial collected 95 million euro.
After its first full year in operation, the NTE, in Texas, attained 52 million dollars in revenues and 38 million dollars in EBITDA, with average daily traffic (ADT) of 25,553 vehicles. The managed lanes are performing well, having registered 5.7 million transits in the fourth quarter of 2015, 42% more than in the first quarter.
The LBJ, which was inaugurated in September 2015, ended its first full quarter of operation with 7 million vehicle transits, an ADT of 12,861. Although both roads are in the launch phase, they are performing better than expected.
Ferrovial obtained 399 million euro in dividends from its Airports and Toll Roads assets which, together with the operating cash flow from Services (289 million euro) and Construction (272 million euro) and excluding infrastructure projects, resulted in 889 million euro in operating cash flow.
Business units
Toll Roads registered traffic growth in all regions. Revenues increased by 19% year-on-year to 513 million euro. The company recently achieved financial closure of Phase 2 of the 407 East Extension in Ontario; the I-77 in North Carolina; and the Toowoomba toll road in Australia. The most recent new contracts, signed in the last few weeks, include the Ruta del Cacao toll road, in Colombia, and the Bratislava bypass, in Slovakia.
Services revenues increased by 11% (5% in Spain and 14.2% in the UK), boosted by the exchange rate effect. The division’s international area, which includes Chile, Qatar, Portugal and Poland, improved revenues by 36%. The backlog, including equity-accounted projects, amounted to 22.800 billion euro, a 1.9% increase on 2014. Ferrovial’s takeover bid for Australian services company Broadspectrum, made late in 2015, is still under way.
Construction increased revenues by 8.8%, EBITDA by 13% and the backlog by 7.9%. This trend was underpinned by good performance by Budimex in Poland, which increased EBITDA by 23% and its backlog by 38%. International revenues increased by 14% due to contributions from new markets such as Australia and the Middle East, as well as continuing performance in established countries such as the US and the UK. The backlog expanded by 7.9% to 8.731 billion euro, 81% of which is international. The main contracts include the Thames Tideway Tunnel, in London; highway I-285, in Atlanta; and several sections of the S7 and S3, in Poland.
As for Airports, the UK regional airports (Glasgow, Aberdeen and Southampton) increased passenger numbers by 5.1%, revenues by 4% and EBITDA by 10%. In particular, Glasgow saw passengers numbers rise 13% year-on-year to 8.7 million, due to new connections with London and other European cities. A total of 75 million passengers used Heathrow in 2015. A number of Asian airlines transferred their operations from Gatwick to Heathrow. The airport received record user satisfaction ratings in 2015, while expanding non-aeronautical revenues.
Shareholders’ Meeting
The Board of Directors expects to propose that the Shareholders’ Meeting, notice of which will be given in due course, approve a flexible dividend programme in similar terms to 2014 and 2015. It would be implemented in the form of two scrip issues. Based on the closing price of Ferrovial’s share on 23 February 2016, they would be equivalent to the payment of a dividend of approximately 0.719 euro per share, compared with the 0.702 paid in 2015. The Board also plans to propose a plan to buy back up to 19 million shares, at a cost of at most 275 million euro; the shares would subsequently be retired.
