Ferrovial ended 1H05 with considerable growth in revenues, earnings and margins in all its business areas, more diversification into recurring activities, and a greater international presence. The company´s investment capacity remains intact despite the fact that it invested more in 1H05 than in FY2004.
Net income in the period amounted to 198.2 million, i.e. 44.7% more than in 1H04. Eliminating the effect of non-recurring earnings (sale of 5% of Ausol and release of the provision at Autopista del Maipo, Chile), net income increased by 18.8%.
EBIT increased 19.4% to 408.9 million, driven by higher revenues, improved margins and performance by recurring activities (infrastructure and services), which grew nearly 25% and now account for 60% of the total. Construction continued to perform strongly, with EBIT rising 19.8%. EBITDA increased 18.3% to 559.5 million.
Revenues totalled 4,073.8 million, i.e. up 16%, boosted by all the activities: construction revenues rose 17.9% due to good performance by construction outside Spain (Poland, Portugal, Ireland, Italy and Chile) and an improvement in the domestic market; services revenues rose 15% due to Amey (which also added an additional 33% of Tube Lines) and positive performance in Spain; infrastructure revenues increased 21.4% due to traffic growth at toll roads and airports and the entry into operation of the Chicago Skyway and R-4 toll roads; and real estate revenues climbed 3.3% due to greater deliveries of homes and land sales.
International sales amounted to 1.63 billion (a 28.4% increase) and represented 40% of the company´s total sales. The foreign countries making the greatest contribution to group revenues were the UK (22%), Poland (7%), Canada (3%), Portugal (3%) and Chile (3%).
Gross capital investment in 1H05 amounted to 623.4 million: three times more than in 1H04 (208 million) and more than in full-year 2004 (389 million). Investments in the period were mainly to acquire Chicago Skyway (376 million), an additional 33% of the London Underground concession company (139 million) and machinery, mainly tunnel-boring machines. Additionally, in 1H05, Ferrovial acquired land worth 128 million euro for homebuilding.
As a result of these investments, the company had a net debt position of 184.5 million at 30 June 2005, representing 6% leverage, and maintained its investment capacity intact.
Construction: international activity surged, margins increased and the backlog was strengthened
Strong growth in construction revenues, which rose 17.9% to 1.98 billion, was due mainly to intense activity in projects in other countries such as Poland, Portugal and Ireland; production in Spain increased by 8%.
This division´s EBIT reached 91.2 million in the first half of 2005, a 19.8% increase, and the EBIT margin was 4.6% (4.5% in 1H04).
The construction backlog increased by 8.7% to 6.886 billion, equivalent to 21 months´ work. Capital expenditure increased 3.5-fold due to the acquisition of heavy machinery, principally tunnel-boring machines.
Polish subsidiary, Budimex, increased revenues by 53.6% to 261.5 million euro and expanded its backlog by 17.5% to 578 million.
Infrastructure: growth in traffic and margins, and commencement of operations in the US
Revenues in the Infrastructure division, which comprises toll roads, airports and car parks, increased by 21.4% to 350.8 million, driven by good performance by the toll roads and airports and a growing contribution from car parks. Commencement of operation of the Chicago Skyway and the R-4 (Madrid) also contributed.
Infrastructure EBIT rose by 24.4% to 139.1 million and the EBIT margin was 39.7% (38.7% in 1H04), mainly because of the improvement in the car park business.
Traffic performance on the main corridors boosted toll road revenues by 22.8% to 262 million and EBIT by 23.3% to 118.6 million. The 407 ETR's performance is significant: EBIT rose by 25.7% on 15% growth in revenues, and traffic increased by 5.8% despite a toll increase on 7 February (peak toll