Ferrovial, the world-leading infrastructure operator and manager of services for cities, reported 240 million euro in net profit in the first half of 2017, a 27% increase on the figure of 189 million euro in the same period of 2016. This result was due to good performance by the assets, which increased their dividend contribution, and to the sale of 51% of Norte Litoral toll road.
EBITDA amounted to 469 million euro, 11% more than in the first half of 2016, while revenues totaled 6,059 million euro, a 29% increase, due to consolidating Broadspectrum and to the contribution by the International Construction business. This impact was offset by the sterling exchange rate effect. International business accounted for 77% of total revenues.
Ferrovial collected 259 million euro in dividends from the assets in which it holds a stake, a 10% increase, including a special dividend from AGS. 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 obtained authorization to divest 51% of the Norte Litoral toll road, which provided 104 million euro in revenues.
In terms of operating performance, traffic increased at Ferrovial's main assets — both toll roads and airports — in North America and Europe, including notably: 407 ETR (+4.3%), LBJ (+14.4%), NTE (+10.6%), Ausol I (+10.8%), Heathrow (+3.9%) and Glasgow airport (+7.3%).
The order book totaled 31,600 million euro, of which Services accounts for 22,211 million euro and Construction for 9,400 million euro; 78% of the backlog is located outside Spain (74% in the case of Services and 85% in the case of Construction). Notable new contracts in the period include the Grand Parkway (Houston); waste collection in Surrey; installation of the Chorus optical fiber network in New Zealand; a number of roads in the US and Poland; and railway projects in Poland. A number of new contracts, such as the I-66 in Virginia, have not yet been added to the backlog.
Main funding transactions in the quarter
Ferrovial ended the first half of 2017 with a net cash position (excluding infrastructure project debt) of 509 million euro. Consolidated net debt amounted to 4,310 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.
AGS refinanced 793 million pounds with a syndicate of 9 financial institutions during the period, which enabled it to enhance its funding structure and extend debt maturities.
The main assets and traffic figures continue to rise
EBITDA increased significantly at the company's main assets: by 15% at 407 ETR in Canada and by 6.8% at Heathrow Airport (in local currency terms in both cases). Traffic growth on 407 ETR provided a 14.6% boost to revenues in local currency terms. Heathrow handled 37 million passengers, with the result that revenues increased by 4.1% to 1,375 million pounds.
These results enabled HAH to distribute a dividend of 188 million pounds in the period, of which Ferrovial collected 55 million euro. Highway 407 ETR distributed 415 million Canadian dollars to shareholders in the period, of which Ferrovial received 131 million euro.
The NTE highway in Texas reported 45 million dollars in revenues (+29.8%) and 37 million dollars in EBITDA, a 39% increase year-on-year. The road registered 7 million trips, an increase of 13% with respect to the same quarter of 2016. The LBJ, the second managed lanes project in Texas, achieved 39 million dollars in EBITDA (+49.9%) on 48 million dollars in revenues (+39.9%). The road logged 10.4 million trips (+7.2%).
Services revenues increased by 40.1% with respect to the first half of 2016, to 3,654 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 3.7%. Spain performed well, with 9.6% growth in revenues due to the higher contribution from the industrial maintenance and infrastructure businesses. Revenues from international business in such countries as the US, Chile, Poland, Portugal expanded to 229 million due to the addition of Broadspectrum's US business in this area, and the backlog tripled to 1,831 million euro.
Toll Roads experienced traffic growth on most assets. This trend gained strength in North America, Spain and other European countries. Revenues increased to 221 million euro due to the higher contribution from the Texas managed lanes projects, and EBITDA surged by 22.9% in like-for-like terms. Ausol I experienced 10.8% growth in traffic, driven by rising tourism and the general improvement in the economy.
Construction division revenues amounted to 2,169 million euro (+16%), mainly in core strategic markets, such as the US and Poland. Budimex (revenues +10.8%, EBITDA +41%) put in a very strong performance. Pepper Lawson contributed 80 million euro in revenues in the first half. International activities continued to gain in importance, accounting for 83% of revenues and 85% of the backlog. The division's EBIT margin was 4%, in line with the industry.
As for Airports, HAH experienced 4.1% growth in revenues and a 6.8% increase in EBITDA, both in local currency terms. The AGS regional airports (Glasgow, Aberdeen and Southampton) achieved a 19.1% increase in EBITDA, in local currency terms. The number of passengers using those airports increased by 6.2%. They distributed 101 million pounds in dividends, of which Ferrovial collected 58 million euro.