Ferrovial, the world-leading manager of infrastructure and services for cities, obtained net profit of 267 million euro in the first half of 2015, an increase of 59% year-on-year. EBITDA increased by 24% to 538 million euro on the back of 14% growth in revenues to 4.736 billion euro, due to good business performance by all of the divisions, which registered double-digit growth, and to the currency effect, due to appreciation against the euro by the currencies in which the most of the company's assets operate. International revenues increased by 19% to account for 71% of the total. The economic improvement in Spain was reflected by traffic growth, as well as an increase in revenues in Services and Construction.
Ferrovial collected 206 million euro in dividends from the main assets in which it holds a stake. Heathrow Airport Holdings (HAH) and the 407 ETR increased their dividends by 11% and 7%, respectively, in local currency terms, and the regional airports (AGS) paid dividends for the first time.
In terms of operating performance, traffic increased at Ferrovial's main assets—both toll roads and airports—in the US, Canada and Europe: 407 ETR (+2.9%), SH-130 (+17.1%), Ausol I (+10.7%), M4 (+6.3%), Heathrow (+1.3%) and Glasgow Airport (+13.8%).
The total backlog remained high, reaching 31.500 billion euro, of which 23.810 billion relate to Services and 7.690 to Construction. International exposure continued to rise in the first half, supported by the currency effect, with the result that 74% of the backlog is located outside Spain (73% in the case of Services and 77% in Construction). Notable new contracts in the period include the 407 East Extension Phase 2 in Canada, several sections of the S3 and S7 expressways in Poland, upgrades to the road connectivity of Northern Beaches Hospital (Australia), and the Trafford services contracts (UK) among others.
Cintra was awarded two new projects after first-half close: the Toowoomba Second Range Crossing toll road in Australia, for some 1.100 billion euro, and the Bucaramanga-Barrancabermeja-Yondó toll road in Colombia, for 880 million euro. Ferrovial Agroman will take part in the construction of both projects.
In the second quarter, the Indiana Toll Road was sold to fund manager IFM Investors, providing proceeds of 50 million dollars.
Furthermore, the first half brought financial closure of the 407 East Extension Phase 2 in Canada and the I-77 in North Carolina, and the A-66 Benavente-Zamora project, in Spain, was refinanced.
Greater flexibility and lower financial costs
Ferrovial ended 1H15 with a net cash position (excluding infrastructure project debt) of 1.450 billion euro. Consolidated net debt amounted to 6.199 billion euro. The parent company does not have significant debt maturities until 2018.
Commencement of liquidation of the Ocaña-Roda toll road, in March 2015, resulted in an accounting gain, with no cash impact, of 64 million euro as a result of reversing the losses recognised in previous years in excess of the capital invested, and the deconsolidation of 567 million euro in debt.
As part of its funding strategy, 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.
Steady growth by the main assets
EBITDA increased significantly at the company's two main assets: the 407 ETR in Canada and Heathrow Airport. Traffic also continued to increase: by 2.9% on the 407 ETR, which boosted revenues by 14% and EBITDA by 15.3% in local currency terms. Heathrow registered 1.3% growth in traffic, to 35.5 million passengers, which yielded an 6.2% increase in revenues to 1.308 billion pounds, and a 10.2% rise in EBITDA to 749 million pounds.
The NTE in Texas continued to perform according to plan. Revenues totalled 22 million dollars, up 33% compared with the previous quarter, and EBITDA was up by 46%. The road registered 5 million trips, an increase of 24% with respect to the period between January and March 2015. The dynamic tolling system, which adapts tolls to traffic flows, became operational on 2 April. The LBJ, the second managed lanes project in Texas, will be inaugurated in the second half of 2015.
Services maintained growth in all geographies and key figures. Revenues and EBITDA increased by 12%. Revenues in Spain increased by 6.1% due to new contracts obtained in the fourth quarter of 2014, which include waste collection and street lighting and traffic light maintenance for Madrid City Government, and street cleaning and waste collection in Huelva and in Orense Hospital. Including contracts recognised by the equity method, the backlog reached another record of 23.810 billion euro, i.e. a 6.4% increase, enhanced by the currency effect.
Toll Roads experienced traffic growth on most assets. The US, Spain, and other European countries registered an improvement across the board. Revenues jumped 23% to 245 million euro with a particularly strong performance by the NTE in Texas and the Chicago Skyway, where revenues and EBITDA growth exceeded 40%. The SH130, which continues in the ramp-up phase, registered a 17% increase in traffic. In the first quarter, the company was awarded the 407 East Extension Phase 2 contract in Canada, and in the last weeks it secured two new projects in Australia and Colombia.
In Construction, profitability was maintained by a disciplined approach to bidding and to cost management. Revenues totalled 2.105 million euro, an improvement of 17%, and EBITDA expanded by 29%. The backlog amounted to 7.690 billion euro, with 1.300 billion euro pending inclusion from new contract intake. International activity continued to gain in importance, due to the good performance by Budimex and contributions from new countries. The international business accounted for 78% of revenues and 77% of the backlog. Budimex registered strong growth in revenues (13%), EBITDA (51%) and the backlog (17%). Ferrovial Agroman performed solidly, with revenues up 24% and EBITDA increasing 19%.
As for Airports, HAH experienced 6.2% growth in revenues and an 10% increase in EBITDA, both in local currency terms. The regional airports (Glasgow, Aberdeen and Southampton) registered growth of 5.3% in revenues and 12% in EBITDA, in local currency terms. The number of passengers using those airports increased by 7.4%. In the first half, these airports paid dividends for the first time, with the company receiving 18 million euro.