Ferrovial, the world-leading manager of infrastructure and services for cities, obtained net profit of 118 million euro in the first quarter of 2015, an increase of 81% year-on-year. EBITDA increased by 14.2% to 210 million euro on 10.4% growth in revenues to 2.147 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 13.7% to account for 68.1% of the total.
Ferrovial collected 90 million euro in dividends from the 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.
In terms of operating performance, traffic increased at Ferrovial's main assets—both toll roads and airports—in the US and Europe: 407 ETR (+2.4%), Chicago Skyway (+4.6%), SH-130 (+19%), Ausol I (+11.5%), M4 (+5.2%), Heathrow (+2%) and Glasgow Airport (+13.2%).
The backlog reached a record 32.150 billion euro, of which 23.450 billion relate to Services and 8.600 to Construction. International exposure continued to rise in the quarter, supported by the currency effect, with the result that 72% of the backlog is located outside Spain (70% in the case of Services and 78% in Construction). Order intake in the first quarter of 2015 included notably the 407 East Extension Phase 2 contract in Canada, a section of Expressway S3 in Poland, and services contracts with the UK Ministry of Justice, the University of Seville and the European University of Madrid.
In March, an agreement was reached to sell the Indiana Toll Road to fund manager IFM Investors; the process will be completed this year and will provide proceeds of 50 million dollars, which will be recognised in subsequent quarters.
Greater flexibility and lower financial costs
Ferrovial ended 1Q15 with a net cash position (excluding infrastructure project debt) of 1.583 billion euro. Consolidated net debt amounted to 6.405 billion euro. The company does not have any significant maturities until 2018.
As regards the Ocaña-La Roda toll road, a legal decision was handed down in March to commence liquidation of the asset, which represents a loss of effective control over this investee, which was deconsolidated as of 28 February. This resulted in an accounting gain, with no cash impact, of 63.7 million euro as a result of the 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 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: by 15% at the 407 ETR in Canada and by 11% at Heathrow Airport (in local currency terms in both cases). Traffic also increased, in line with the last few quarters: by 2.4% on the 407 ETR, which boosted revenues by 15.5% in local currency terms. Heathrow registered 2% growth in traffic, to 16.4 million passengers, which yielded an 8.3% increase in revenues to 623 million pounds.
These results enabled HAH to distribute a dividend of 75 million pounds in the quarter. The 407 ETR distributed 187.5 million Canadian dollars to shareholders in the period.
The NTE in Texas, which uses an advanced system of managed lanes on which tolling is dynamic, continued to ramp up on schedule during its second quarter in operation. Revenues totalled 9.4 million dollars, up 47% compared with the previous quarter. The road registered 4 million trips, an increase of 3.1% with respect to the period between October and December 2014. 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 expanded by 12.5%, and EBITDA by 12%. Revenues in Spain increased by 6.7% 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. Including contracts recognised by the equity method, the backlog reached a record 23.450 billion euro, i.e. a 5.3% 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 totalled 113 million euro and, notably, the NTE in Texas entered into service while Chicago Skyway registered strong performance, with traffic rising steadily. The SH130, which continued in the ramp-up phase, registered a 19% increase in traffic. The company was recently awarded the 407 East Extension Phase 2 contract in Canada.
In Construction, profitability was maintained by a selective approach to bidding. Revenues totalled 883 million euro, an improvement of 11.1%, and EBITDA expanded by 15.1%. The backlog stood at 8.600 billion euro, up 6.3%. International activity continued to gain in importance, due to the good performance by Budimex and contributions from new countries. The international business accounted for 72% of revenues and 78% of the backlog. Budimex registered strong growth in revenues (22.5%), EBITDA (79.4%) and the backlog (10%).
As for Airports, HAH experienced 8.3% growth in revenues and an 11% increase in EBITDA, both in local currency terms. The regional airports (Glasgow, Aberdeen and Southampton) registered growth of 7% in revenues and 12.9% in EBITDA, in local currency terms. The number of passengers using those airports increased by 9.3%.
On 27 March, the Shareholders' Meeting approved two scrip dividends, to be paid over the course of the year. The first will begin on 5 May, with a reference share price of 20.384 euro based on Ferrovial's share price between 23 and 29 April. Ferrovial will purchase the warrants from tendering shareholders for 0.304 euro. Additionally, a share buyback programme capped at 18 million shares and 250 million euro was approved; the shares will be retired. The buyback will extend from 26 May to 18 November 2015.