Ferrovial obtains 2.163 billion euro net profit in 2010
Net profit, including realized capital gains, maintained the positive trend observed in the third quarter of 2010.
The main assets continued to perform well: EBITDA increased in like-for-like terms by 38% at Budimex, 23% at Amey, 15% in the International Construction business, 15% at 407 ETR, 7.6% at Cintra and 7.4% at BAA.
The backlog reached an all-time record of 22.190 billion euro at year-end. The Services backlog increased by 20% to 12.003 billion euro and the Construction backlog by 16% to 10.186 billion euro. International business accounts for 60%.
Parent company debt, excluding infrastructure projects, was reduced by over 1.200 billion euro, resulting in a net cash position of 31 million euro.
Madrid, 23 February 2011. Ferrovial, the world-leading infrastructure and services company, obtained 2.163 billion euro in net profit in 2010, contrasting with losses of 74 million euro in 2009. That figure is the result of capital gains and value realization in asset rotation, internationalization, and obtaining major contracts. EBITDA amounted to 2.514 billion euro in 2010, 6.5% more than 2009 in like-for-like terms.
The income statement reflects the robustness of Ferrovial's businesses and the resilience of its main assets. EBITDA increased in like-for-like terms by 38% at Budimex, 23% at Amey, 15% in the International Construction business, 15% at 407 ETR, 7.6% at Cintra and 7.4% at BAA. These results also reflect the addition of long-term contracts such as maintenance in Birmingham (UK), waste management in Murcia, the Donarbon portfolio, financing of the LBJ (Texas), construction of the new terminal at Heathrow, and a number of projects in Poland. Traffic also performed well, rising 5.5% on 407 ETR and 3.4% at Heathrow (excluding extraordinary impacts). Ferrovial's backlog reached an all-time record of 22.190 billion euro at year-end. The Services backlog expanded by 20% to a peak of 12.003 billion euro. The backlog in Construction increased by 16% to 10.186 billion euro. The international area made a major contribution in both cases: 55% in Services and 65% in Construction. This sizeable backlog lends considerable visibility to operations and earnings in the medium and long term. The positive trend in cash flow was maintained, reaching 811 million euro (basically from Construction and Services); combined with divestments, that let to a net cash position of 31 million euro at year-end. That year-end figure does not include the proceeds from divesting Swissport or the M-45.
In a difficult economic context, Ferrovial fulfilled its plans in 2010, improved its main financial numbers and reduced parent company debt by 1.200 billion euro. Consolidated net debt, including infrastructure projects, amounted to 19.789 billion euro (-11%), reflecting deconsolidation of 407 ETR.EBIT increased by 14% to 1.514 billion euro on a 2.7% like-for-like increase in revenues to 12.170 billion euro.
Asset rotation and internationalization
In 2010, the company maintained its policy of rotating and realizing the value of assets. During the year, it divested 10% of highway 407 ETR in Canada for 894 million Canadian dollars; 60% of Cintra Chile for approximately 229 million euro; and Tube Lines, the London Underground concession holder, for 206 million pounds. Additionally, BAA completed the sale of Airport Property Partnership (APP) for 244 million pounds and 65% of Naples airport for 150 million euro. Ferrovial's geographic and business diversification strategy makes its income statement more resilient to the economic cycle. International revenues accounted for 69% of revenues (64% in 2009) and 85% of EBITDA (84% in 2009).
Services: All-time record backlog
Ferrovial Services increased profitability in 2010 as a result of new contracts in the UK plus cost controls and selection of customers in Spain. Despite the economic situation, this Division attained 3.896 billion euro in revenues, i.e. 3.1% more than 2009 in like-for-like terms. EBITDA amounted to 410 million euro, an 8.6% increase in like-for-like terms.
The backlog amounted to 12.003 billion euro, 20% more than at the end of 2009, due to the addition of a contract to maintain roads and other infrastructure in Birmingham (UK), as well as the Donarbon portfolio, whose main asset is a 28-year waste management contract in Cambridgeshire. Amey registered a 9% proforma increase in sales to 1.1 billion euro, while its EBITDA rose by 23% to 112 million euro. The backlog expanded by 30% to 6.592 billion euro at year-end.
In the Spanish market, Cespa and Ferroser together attained 1.495 billion euro in revenues and 191 million euro in EBITDA, keeping the EBITDA margin stable. The backlog expanded by 11% to 5.411 billion euro at year-end.
On 2 November 2010, Ferrovial reached an agreement to sell Swissport International AG to PAI Partners for 900 million Swiss francs. This sale was completed on 17 February 2011.
Toll roads: Good performance by 407 ETR
The Toll Roads division increased revenues by 7.2% in like-for-like terms to 869 million euro. EBITDA increased 7.6% in like-for-like terms to 630 million euro. Traffic performance in 2010 reflected the economic situation in each country. Canadian toll road 407 ETR, Cintra's largest asset, obtained 456 million euro in revenues (+11% like-for-like) and 365 million euro in EBITDA (+15%).Traffic on the road increased by 5.5% in terms of vehicle-kilometers travelled (VKT).
On 22 June 2010, Cintra closed the funding for the LBJ highway (2.8 billion dollars). 407 ETR issued bonds worth 1.500 billion dollars and had prefunded all its 2011 debt maturities by the end of the fourth quarter. In Spain, Ausol extended the maturity date of its 492 million euro syndicated loan to 19 March 2011. The R4 toll road made an arrangement with the same syndicate to extend maturity of a 197 million euro loan to 27 July 2011.
As for divestments, Cintra completed the sale of 10% of 407 ETR for 894 million Canadian dollars to Canada Pension Plan Investment Board (CPPIB). It also concluded the sale of 60% of Cintra Chile to Colombian company ISA. That transaction amounted to approximately 229 million euro.
Because of the existence of call and put options, the transaction was booked for the full value of the asset, i.e. 381 million euro, leading to consolidated net income of 274 million after taxes. In January 2011, the Group completed the sale (announced in July 2010) of Cintra's stake in the M-45 toll road for 68 million euro.
Construction: International expansion
Strong growth in the international Construction area offset lackluster performance in the domestic market. The division registered 4.525 billion euro in revenues in 2010, a 1.3% decline in like-for-like terms. EBITDA amounted to 231 million euro, 1.9% less. International revenues amounted to 2.395 billion euro, 18% higher in proforma terms. EBITDA totaled 119 million euro, a 15% increase. The international area's contribution to both revenues and EBITDA exceeded that of the domestic market for the first time.
The backlog expanded by 16% to 10.186 billion euro. The international backlog increased by 43% to 6.582 billion euro, i.e. accounting for 65% of the division total. This year, the Division added new international contracts including the LBJ highway in Texas and construction of Heathrows new Terminal. In Poland, Budimex reported 1.014 billion euro in revenues. EBITDA increased by 38% to 62 million euro while the backlog grew by 36% to 1.743 billion euro. In the US, Webber's revenues increased by 12% in like-for-like terms to 490 million euro, and its EBITDA rose by 12% to 25 million euro. The backlog amounted to 1.529 billion, a 47% increase.
Revenues in the domestic market amounted to 2.139 billion euro and EBITDA to 112 million euro.
Airports: 109 million passengers
BAA's revenues increased by 5% in like-for-like terms to 2.790 billion euro in 2010. EBITDA expanded by 7.4% to 1.282 billion euro. BAA's operations were affected by the volcanic eruption in Iceland, the strike by British Airways cabin crews, and the snowstorm in December. But for those events, Heathrow traffic would have increased by 3.4%.
Retail revenues per passenger performed very well, rising by 14.4% at Heathrow on the back of a 65% increase in point-to-point traffic. Overall, BAA handled 109 million passengers (66 million at Heathrow alone). There was a change in traffic trends between July and November, enabling Heathrow to log all-time record passenger numbers for five consecutive months.
