Ferrovial reports 387 million euro net profit, a 39% increase, in the first nine months of 2017

Ferrovial, the world-leading infrastructure operator and manager of services for cities, reported 387 million euro in net profit in the first nine months of 2017, a 39% increase on the figure of 279 million euro in the same period of 2016. This was due to positive performance by the equity-accounted assets, which contributed a larger amount of dividends, and to the sale of toll road stakes (51% of Norte Litoral and 49% of Algarve).

EBITDA amounted to 711 million euro, 9.5% more than in the same period of 2016, while revenues totaled 9,194 million euro, a 19.5% increase, due to consolidating Broadspectrum –an Australian company acquired in 2016- for a longer period and to the contribution by Budimex. International business accounted for 77% of total revenues.

Ferrovial collected 366 million euro in dividends from the assets in which it holds a stake, a 11.9% increase. During the period, Ferrovial sold 3.9% of Budimex for 59 million euro, reducing its stake in the Polish construction company to 55.1%. It also divested 51% of the Norte Litoral toll road and 49% of the Algarve toll road, which provided 104 million euro and 58 million euro, respectively, in revenues.

The company also acquired 6.3% of NTE and 3.6% of LBJ from Dallas Fire & Police Pension Scheme, raising its stakes to 62.97% and 54.6%, respectively.

In terms of operating performance, traffic increased at practically all of Ferrovial’s assets — both toll roads and airports — including notably: 407 ETR (+2.7%), LBJ (+11%), NTE (+10.2%), Ausol I (+9.7%), Heathrow (+3.1%) and Glasgow airport (+6.7%).

The order book was close to 30,000 million euro, of which Services accounts for 20,706 million euro and Construction for 9,045 million euro; 77% of the backlog is located outside Spain (74% in the case of Services and 84% in the case of Construction). Notable new contracts in the period include the Grand Parkway (Houston); tunnel maintenance in Washington D.C.; a liquefied gas plant in Australia; several roads in the US and Poland; and railway projects in Poland. The backlog does not yet include over 3,100 million euro in projects, including the I-66 in Virginia and remodeling Denver Airport.

Main funding transactions

Ferrovial ended September 2017 with a net cash position (excluding infrastructure project debt) of 268 million euro. Consolidated net debt amounted to 4,495 million euro.

The company issued an 8-year 500 million euro corporate bond paying 1.375%, one of the lowest rates achieved by a Spanish bond issue in the period. 407 ETR also issued senior bonds, maturing in 27, 16 and 5  years.

AGS refinanced 793 million pounds in the period, which enabled it to improve its funding structure and extend debt maturities.

The main assets and traffic figures continue to rise

The NTE highway in Texas reported a 35.3% increase in EBITDA year-on-year, to 56 million dollars, on a 26.7% increase in revenues. LBJ, the second managed lanes project in Texas, achieved 59 million dollars in EBITDA (+40.5%), while its revenues increased by 33.8%. The two toll roads’ EBITDA in the first nine months of 2017 matches that achieved in 2016 as a whole.

EBITDA increased significantly at the company’s main assets: by 12.3% at 407 ETR in Canada and by 5.8% at Heathrow Airport (in local currency terms in both cases). Traffic growth on 407 ETR provided a 12.3% boost to revenues in local currency terms. Heathrow handled 59 million passengers, resulting in a 3.2% increase in revenues.

These results enabled HAH to distribute 281 million pounds in dividends in the first nine months, of which Ferrovial collected 79 million euro. Highway 407 ETR distributed 630 million Canadian dollars to shareholders in the period, 8% more than in 2016, of which Ferrovial received 195 million euro. Additionally, the highway’s Board of Directors declared a dividend of 215 million dollars to be distributed in the fourth quarter.

Business units

Toll Roads experienced traffic growth on most assets. Revenues amounted to 339 million euro due to the higher contribution from the Texas managed lanes projects, where EBITDA increased strongly, by 20.6% in like-for-like terms. The US now accounts for 37.5% of revenues and 43.1% of EBITDA.

In the Airports division, HAH experienced 3.2% growth in revenues and a 5.8% increase in EBITDA, both in local currency terms. The AGS regional airports (Glasgow, Aberdeen and Southampton) achieved a 15% increase in EBITDA, in local currency terms. The number of passengers using those airports increased by 5.7%. They distributed 112 million pounds in dividends, of which Ferrovial collected 64 million euro.

Construction division revenues amounted to 3,394 million euro (+11.9%), mainly from core strategic markets, such as the US and Poland. Budimex performed very well, increasing revenues by 8.6% and EBITDA by 32.9%. Webber increased revenues by 11.9% while its backlog expanded by 26.5%. International business accounts for 83% of Construction revenues and 84% of its backlog. The division’s EBIT margin was 4%,.

Revenues in Services increased by 25.9% with respect to the same period of 2016, to 5,430 million euro, due to integrating Broadspectrum, although they were affected by depreciation of the pound sterling and budget cutbacks by local governments in the UK. Adjusting for the exchange rate effect and for consolidating Broadspectrum, revenues would have increased by 4.1%. Spain performed well, with 8.8% growth in revenues due to the higher contribution from the industrial maintenance and infrastructure businesses. In the United Kingdom, the company is applying a strict policy of selecting the projects for which to bid. Revenues from international business in such countries as the US, Chile, Poland and Portugal expanded to 339 million due to the addition of Broadspectrum’s US business in this area, and the backlog amounted to 1,564 million euro.