- The income statement reveals solid business performance, with 8% growth in revenues to 8.800 billion euro and a 5% increase in EBITDA to 980 million euro.
- The total backlog reached a record 30.460 billion euro, of which 71% corresponds to international contracts. Major adjudications include the extension of the London Underground, a section of the Pacific Highway in Australia, and several urban services contracts with Madrid City Government.
- The principal assets maintained their robust performance: traffic continued to increase on the 407 ETR and at Heathrow Airport, and both registered growth in revenues; EBITDA increased by more than 10% in local currency terms. Ferrovial received 565 million euro in dividends from its investment in these assets.
- In the fourth quarter, the company completed the acquisition of Glasgow, Aberdeen and Southampton airports, in line with its strategy focused on profitable growth and on strengthening the Airports division, with the result that investments outstripping divestments in 2014.
- The company allocated 510 million euro to shareholder remuneration. The total shareholder return was 22% in 2014.
Ferrovial, a global infrastructure operator and manager of municipal services, obtained 983 million euro in EBITDA in 2014, a 5.2% increase, on 7.8% growth in revenues to 8.802 billion euro, due to good business performance in Services, full integration of Enterprise, and the international Construction area. International revenues increased by 9% to account for 69% of the total. Ferrovial received 595 million euro in dividends from the assets in which it holds a stake. The Board of Directors called the next Shareholders’ Meeting for 27 March.
Net profit amounted to 402 million euro, compared with 727 million euro in 2013, which included extraordinary items such as the sale of Stansted airport, the divestment of 8.65% of HAH, and the sale of Danwood and of 40% of the Amey subsidiary that groups its PFI projects. Net profit would have increased by 8.7% excluding non-recurring impacts in both years.
The backlog reached a record 30.460 billion euro, of which 22.369 billion relate to Services and 8.091 to Construction. The company increased its international exposure in 2014, with the result that 71% of the backlog is located outside Spain (70% in Services and 76% in Construction). Notable new adjudications include a 28-year contract for a treatment plant in North Yorkshire, expansion of London Underground, end-to-end management of non-medical services at the Ourense University Hospital Complex, several urban services contracts with Madrid City Government, the Pacific Highway in Australia, and a number of road projects in Poland.
Driving the profitable growth strategy
As part of a consortium in which it owns 50%, Ferrovial agreed to acquire Glasgow, Aberdeen and Southampton in a deal worth 1.048 billion pounds (about 1.317 billion euro).
Capital expenditure totalled 581 million euro in 2014, the bulk of which was used for the Airports division and for toll road projects in the US.
Financial strength
Ferrovial ended 2014 with a net cash position (excluding infrastructure project debt) of 1.632 billion euro. Consolidated net debt amounted to 6.230 billion euro.
In 2014, Fitch Ratings upgraded the parent company’s debt to BBB, with stable outlook, the same rating that Standard & Poor’s had assigned to the company previously. In July, Ferrovial successfully completed its third bond issue: 300 million euro at 10 years paying a 2.5% coupon. The funds were used to optimise the corporate debt maturity calendar and reduce its cost, while also enhancing the company’s investment capacity.
Also this year, Ferrovial arranged a new 5-year liquidity line amounting to 750 million euro which currently costs 80 basis points.
Steady growth by the main assets
EBITDA increased by more than 10% (in local currency terms) at the company’s two main assets: 407 ETR in Canada and Heathrow Airport. Traffic also increased throughout the year: 3.4% on 407 ETR, including growth in the number of trips and vehicle-kilometres travelled, while Heathrow reported 1.4% growth in passenger numbers to 73 million.
These results enabled Heathrow Airport Holdings (HAH) to distribute 1.075 billion pounds in dividends, including an extraordinary dividend from the sale of the unregulated airports. Ferrovial collected 341 million euro in total from HAH. The 407 ETR increased its shareholder remuneration last year to 730 million Canadian dollars, of which the company received 224 million euro. Ferrovial obtained 595 million euro in dividends from its investments which, together with the operating cash flow from Services (302 million euro) and Construction (236 million euro) and excluding infrastructure projects, exceeded 1.000 billion euro for the second consecutive year.
The NTE in Texas was inaugurated on 4 October, nine months ahead of schedule. The road uses an advanced system of managed lanes on which tolling is dynamic. This concession runs for 52 years and required an investment of 2.100 billion dollars. The second managed lane project, the LBJ in Texas, is expected to be inaugurated in the second half of 2015.
Business units
In Services, the integration of Enterprise and new contracts in the United Kingdom, Spain, and other countries established the division as Ferrovial’s largest in terms of revenues and EBITDA, both of which increased by 20% in the period. The backlog reached another record high, 22.369 billion euro, including contracts recognised by the equity method; that is an 20% increase on 2013.
Toll Roads experienced traffic growth on most assets. The situation in Spain, Ireland and Portugal is gradually improving. Revenues totalled 432 million euro and, most notably, the NTE in Texas entered into service while Chicago Skyway registered strong performance, with traffic rising steadily throughout the year. The SH130, which is in the ramp-up phase, registered an increase in traffic of 18.5%. The company recently obtained adjudications in Phase 2 of the 407 East Extension in Ontario and the I-77 in North Carolina; financial closure for both is still pending.
In Construction, international activity continued to gain in importance, accounting for 76% of revenues and 76% of the backlog. Budimex registered notable growth in revenues (5%), EBITDA (24%) and the backlog (36%). During the year, Ferrovial Agroman landed major projects in Australia, Saudi Arabia and Brazil, as well as several road contracts roads in Poland. Total revenues amounted to 3.942 billion euro, mainly as a result of completion of projects in the UK, while EBITDA increased by 1.7%. The backlog amounted to 8.091 billion euro, an increase of 2.9% year-on-year.
As for Airports, HAH experienced 8.8% growth in revenues and a 12.5% increase in EBITDA, both in local currency terms. More than 86 million passengers used the group’s four airports in 2014. Heathrow continues to obtain record-high satisfaction indices, reflecting the improvements achieved in punctuality, safety and immigration processes. The unregulated airports (Glasgow, Aberdeen and Southampton) attained growth of 5.9% in passenger numbers, 4.5% in revenues and 5.2% in EBITDA.
Shareholders’ Meeting
The Board of Directors meeting held today called the Shareholders’ Meeting for 27 March. Issues that will be addressed include approving the 2014 accounts, presenting the corporate governance and director remuneration reports, and proposing shareholder remuneration for 2015. With respect to the latter, the Shareholders’ Meeting will be asked to approve two scrip dividends, which, based on Ferrovial’s share price on Friday, 20 February, would be equivalent to a dividend of approximately 0.696 euro per share, compared with the 0.672 euro per share paid in 2014. A share buyback programme capped at 18 million shares and 250 million euro will also be proposed; the shares will be retired.
