Empresas ICA SAB de CV : , S.A.B. de C.V. First Quarter 2016 Unaudited Results

1445f48d-181b-46e7-b9b4-46e662c0a797.pdf Empresas ICA, S.A.B. de C.V. First Quarter 2016 Unaudited Results

May 26, 2016, Mexico City - Empresas ICA, S.A.B. de C.V. (BMV and NYSE: ICA), announced today its unaudited results for the first quarter of 2016, which have been prepared in accordance with International Financial Reporting Standards. During the fourth quarter of 2015, the Company suspended the sale of its social infrastructure projects. Accordingly, these projects are no longer classified as available for sale, and financial statements from prior periods have been restated for comparability. In addition, ICA is no longer consolidating San Martín, effective October 1, 2015, as a result of the reduction in ICA's shareholding to 31.2% from 51%.

• Total revenues decreased 36% in the first quarter, compared to 1Q15
• A 49% decrease in civil construction revenues from 1Q15 affected results
• The Adjusted EBITDA margin of 22.6% was unchanged from 1Q15
• The gain on sale of OMA Series B shares, recorded in the stockholders' equity account, resulted in an increase in stockholders' equity of Ps. 3,519 million compared to December 31, 2015
• Financial and operating restructuring continues
• April 30, 2016 headcount was reduced by 35% from December 2015 levels, as part of restructuring process
• Comprehensive backlog was Ps. 60,757 million as of March 31, 2016 Financial and Operating Results

First quarter consolidated net revenues decreased 36% to Ps. 6,108 million from Ps. 9,501 million in

1Q15. This reduction was principally the result of lower volumes of construction work on various projects and the deconsolidation of San Martín effective 4Q15. Revenues of the Construction segment decreased to Ps. 3,062 million in 1Q16 from Ps. 6,053 million in 1Q15.

The consolidated net loss was Ps. 1,101 million in 1Q16. The net loss was principally the result of the reduction in Construction segment revenues and comprehensive financing cost. Loss per share was Ps. 2.23 (US$ 0.51 per ADS).

The gain on sale of OMA Series B shares was recorded as a direct credit to equity, and did not pass through the income statement. This gain offset the consolidated net loss, and stockholders' equity increased by Ps. 3,519 million compared to December 31, 2015.

Consolidated Results Ps. million	1Q15	1Q16	% Chg
Revenues	9,501	6,108	(36)
Operating Income	1,570	978	(38)
Consolidated Net (Loss)	(708)	(1,101)	(55)
Net Loss of Controlling Interest	(846)	(1,370)	(62)
Adjusted EBITDA	2,091	1,379	(34)
Operating Margin	16.5%	16.0%
Adjusted EBITDA Margin	22.0%	22.6%
EPS (Ps.)	(1.38)	(2.23)	--
EPADS (US$)	(0.36)	(0.51)	--

Liquidity and Debt

Total consolidated debt decreased 8% to Ps. 62,498 million as of March 31, 2016, as compared to December 31, 2015. The decrease was principally the result of loan payments to Santander, Deutsche Bank, Barclays, and Value that were secured by the pledge of OMA B shares, payment of a working capital line to BBVA Bancomer, and scheduled amortizations of debt of operating projects.

Total cash was Ps. 8,298 million as of March 31, 2016.

Comprehensive backlog

Comprehensive backlog, including ICA's share of backlog of unconsolidated affiliates and joint ventures, reached Ps. 60,757 million as of March 31, 2016, a decrease of Ps. 3,786 million compared to December 31, 2015. Consolidated backlog was Ps. 31,129 million, down Ps. 1,251 million from year-end. Total backlog of non-consolidated affiliates and joint ventures (principally at ICA Fluor) decreased Ps. 3,112 million to Ps. 62,254 million, of which ICA's proportional share was Ps. 29,628 million as of March 31, 2016.

* ICA's proportional share in ICA Fluor

** ICA's proportional share in other affiliates and joint ventures

Reduction in Costs and Expenses

During the fourth quarter of 2015, ICA entered into a process of operational restructuring, in order to reduce costs and expenses. Through April 30, 2016, the workforce had decreased 35% from the levels as of December 2015, and 51% as compared to December 2014. Independently of other efforts to reduce costs, payroll costs have decreased by 35% and 43%, compared to the levels at the end of 2015 and 2014, respectively.

Financial Restructuring Activities

ICA is currently focused on the definition of a financial restructuring plan. We continue to work with our advisors, Rothschild México and FTI Consulting, to complete this plan.

Business Segment Results Construction

Ps. million	1Q15	1Q16	% Chg
Revenues	6,053	3,062	(49)
Operating Income (Loss)	187	(387)	(307)
Adjusted EBITDA	400	(276)	(169)
Operating Margin	3.1%	-12.6%
Adjusted EBITDA Margin	6.6%	-9.0%
Dec-15	Mar-16	% Chg
Cash and Cash Equivalents	987	590	(40)
Total Debt	6,394	3,525	(45)
Construccion Backlog	32,380	31,129	(4)
Contracted Mining and Other Services	91	48	(47)

Construction revenues have decreased sharply starting in the second half of 2015, in large part as a result of the lack of liquidity that prevented project execution at optimal rates. Revenues decreased 49% to Ps. 3,062 million in 1Q16 from Ps. 6,053 million in the same period of 2015. In addition to the generalized lack of liquidity, revenues decreased principally because of: i) reduced volumes of work on Mitla-Tehuantepec because of social issues; ii) suspension of work on Barranca Larga - Ventanilla as a result of the financial unviability of the project resulting from: a) cost overruns generated by social issues, and b) an unfavorable traffic study; iii) cancellation of the Lázaro Cárdenas TECII project; and

iv) the deconsolidation of construction and mining services contracts of San Martín Contratistas Generales in Peru, effective during 4Q15, as a result of the reduction in ICA's shareholding from 51% to 31.2%. The largest contributor to revenues was the Facchina Construction Group in the U.S., with Ps. 1,075 million in revenues in 1Q16, followed by the Palmillas - Apaseo El Grande and Mitla - Tehuantepec highways.

Construction backlog decreased 3.9% to Ps. 31,129 million as of March 31, 2016, compared to Ps. 32,380 million as of December 31, 2015. New contracts and net contract additions totaled Ps. 1,567 million in 1Q16, and principally included new Facchina contracts.

Projects abroad represented 15% of construction backlog.

Construction Backlog	Ps. million
Balance, December 2015	32,380
New contracts	1,567
Exchange rate adjustments	8
Work executed	2,826
Balance, March 2016	31,129

Book and burn ratio (new contracts/ w ork executed) (1) 0.6

Construction Backlog Contracts by modality and currency, March 31, 2016
Fixed Price	48%
Unit Price	44%
Mixed Price	8%
Mexican pesos	85%
Foreign Currency	15%
Construction Backlog Contract by location and client, March 31, 2016
Projects in Mexico	85%
Projects outside Mexico	15%
Public sector clients	82%
Private sector clients	18%

Contracted Mining and Other Services
Balance, December 2015	91
New contracts	193
Exchange rate adjustments	(0)
Work executed	236
Balance, March 2016	48