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Sun August 18 2019

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Ferrovial slashes its losses

31 Jul Ferrovial has reported a loss of €6m (£5.5m) for the first half of the year compared to last year's €72m loss for the same period.

The managed lanes roads projects in Texas are doing well
The managed lanes roads projects in Texas are doing well

Revenue totalled €2.603bn, 82% of which was obtained outside of the group’s home territory of Spain. Earnings before interest, tax, depreciation and amortisation (EBITDA) amounted to a loss of €116m due to a potential €345m charge in the construction division, relating to possible losses on some construction contracts in the United States. But for that effect, EBITDA would have been €229m. EBITDA was also affected by the services division being classified as “available for sale”.

The company said that its main infrastructure assets continued to perform well, particularly the managed lanes roads projects in Texas. EBITDA increased at 407 Express Toll Route (ETR) (+7.1%), Heathrow Airport (+7%) and Texan toll roads North Tarrant Expressway (NTE) (+45.4%) and Lyndon B Johnson Highway (+23.7%), in local currency terms in all cases.

Ferrovial collected €244m in dividends from the assets in which it holds a stake: 407 ETR distributed CA$500m (£312m), Heathrow GBP 200m and AGS GBP 20m. Dividend coming from toll roads increased  10%. The company also announced that NTE will distribute a dividend this year for the first time.

Net cash, excluding Infrastructure projects but including the Services division, amounted to €482m at the end of the period. Consolidated net debt amounted to €3.926bn.

The construction backlog stood at €11.405bn, a new record, 88% of which is outside Spain - particularly the United States and Poland. That figure does not yet include €1.250bn in international construction projects.

In the second quarter, Cintra reached an agreement to sell 65% of the Ausol concession company to Meridian infrastructure fund for €447m. Cintra will retain a 15% stake in the concessionaire. This deal will provide €474m in capital gains that are not accounted for in the first-half results.

Services reported €3.597bn in revenues (+10.5%), with EBITDA of €168m (+9.4% excluding Amey's problems in Birmingham). Spain performed well, with revenues up 2.8%, driving 5.3% growth in EBITDA. Revenues in the United Kingdom increased by 22.7%, with EBITDA amounting to €18m. International revenues, from such countries as the US, Poland, Chile and Portugal, amounted to €331m, an increase of 31.1% in like-for-like terms. Broadspectrum, the Australian subsidiary, reported €816m in revenues in the quarter.

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