Sacyr : earns a net profit of 89 million euros (+25.6%)

11/11/2016

The Sacyr Group achieved a net profit of €89.4 million in the first nine months of 2016, representing an increase in comparable terms of 25.6% on the same period for 2015. EBITDA has increased by 6.1%, up to €261.6 million.

These figures are confirmation that the group has implemented the right strategy, increasing its overall company profile while applying a strict system of risk management and cost control.

Total revenue grew by 1.8% up to €2,161.2 million, thanks to the strong push from international activity. 52% of revenue comes from outside of Spain.

The gross margin continues to improve, going from 11.6 % to 12.1%

The revenue backlog reached €26,240 million in September, comprising mostly recurring business: Sacyr Concesiones, with €12,895 million, makes up 49% of the total, and Valoriza, with €6,516 million, 25%. Portfolio size will increase in the final quarter following the successful award of important contracts, such as the construction and concession of Routes 2 and 7 in Paraguay, worth €1,300 million, and lot 2 of Madrid refuse collection service, which will contribute €87 million to the portfolio.

52 % of the total portfolio now comes from international activity, even though important contracts such as the Pedemontana-Veneta concession in Italy or the Mar 1 freeway in Colombia are not within the consolidation boundary. Within the construction business, this figure reached 83% as a result of the intense tendering activity outside Spain, while concessions represent 59%, services represent 29%, and industrial represents 21% of the portfolio.

RELEVANT FACTS

The most relevant facts for the company over recent months are:

• Completion of a derivatives operation on 20 million Repsol shares, eliminating the risk of variations in the market price of Repsol below 10.7 €/share. The funds obtained means the debt associated to the petrol company's shareholding has been reduced by €213 million, from 1,301 million to 1,088 million.

• Award of the 186 km Roma-Latina highway in Italy, with envisaged investment of €2,800 million and a concession period of 43 years.

• Award of the construction and operation of Routes 2 and 7 in Paraguay with investment amounting to $520 million and a forecast income portfolio of $1,470 million over a concession period of 30 years.

• Inauguration of La Pampilla refinery upgrade in Peru, carried out by Sacyr Industrial.

BUSINESS PERFORMANCE:

Sacyr Construcción.- Revenue in this division was around €997 million, a drop of 15.2%. Ebitda was €38 million, an encouraging figure given the difficult economic environment in this sphere in Spain, Portugal and other markets. To overcome this situation, the company has overseen a redundancy process (which includes the non-recurring negative impact of -25.5 million due to restructuring of personnel in Spain and Somague) and other business model transformation measures to improve efficiency and productivity over the upcoming months.

The work portfolio is around €4,280 million, of which 83% corresponds to international projects. In this regard, the portfolio will be significantly increased and have even greater international emphasis thanks to the contracts awarded for Paraguay, and others which are still to be signed in Chile and Mexico, among others.

Sacyr Concesiones.-This division has continued to increase the number of concessions of the group, whilst improving its portfolio and financial structure.

Turnover for concessions operated by Sacyr Concesiones improved by 14.9% to €232.9 million, a highly positive figure which has come about thanks to the evolution of traffic in Spain (+5%) and the concessions in Chile (+8%).

Construction revenue was €168.3 million, a 19% decrease due to the progress of the concessions in Chile.

In total, comparable turnover reached €401.2 million, eliminating the effect of the disinvestments, representing an increase of 1.4%.

Ebitda amounted to €158.3 million (16.8% up on last year, in uniform terms) whilst margin was stable around 69 %. Net profit was €26.2 million. The activity portfolio is around €12,895 million, with 59% of future revenue from overseas.

As part of its regular strategy of asset rotation, in the first nine months Sacyr Concesiones closed disinvestment in three hospitals in Portugal for €113 million including debt, but maintains its minority shareholding which will allow it to continue to offer hospital management services. Moreover, the Aunor concessions were refinanced through a bond issue amounting to €54 million, and the Moncloa and Plaza Elíptica transport hubs in Madrid were also refinanced with 25-year debt of €190 million. Both these cases benefited from the best conditions now available on the financial markets.

Valoriza -The services subsidiary has consolidated its high level of turnover and contracts while maintaining suitable profitability.

Valoriza amounted to €654 million (+15.4%), led by increases in the Environment (+12.5%), Multiservices (+25.7%) and water (+1%) businesses. The ebitda reached €52.5 million, which represents a margin of 8%. The breakdown of revenue by area was: Environment, €262 million; Multiservices, €281.7 million; and Water, €108.4 million.

Valoriza's revenue backlog increased to €6,516 million (+8%), of which 29% involves international projects. The following contract awards are notable during this financial year:

- Valoriza Agua: Sohar desalination plant in Oman for $1,200 million;

- Valoriza Servicios Medioambientales: street cleaning and refuse collection in Albacete for €164 million over 15 years; refuse collection and transport in eastern Madrid for €87 million;street cleaning and refuse collection in Ibiza for €68, among others.

- Valoriza Servicios a la Dependencia: home-help services in the 5 Madrid districts for €154 million over 3 years, and in the Gracia and El Ensanche districts in Barcelona for €29 million over 2 years;

- Valoriza Facilities:cleaning services for hospital and health center buildings and facilities in Elche, Alcoy and Requena for €15 million; cleaning of Madrid Metro rolling stock, lots 1 and 2, for €21 million over 4 years; cleaning of vehicles and facilities of ALSA transport company for €18 million, among others.

Sacyr Industrial.- The youngest division in the group maintains its high rate of growth and meets all forecasts.

Sacyr Industrial's turnover grew by 53% up to €289.7 million, most notably the Oil and Gas segment, where turnover has grown by 145%, up to €171.7 million, due to the progress of the projects currently under way and despite the fact the generation area (-21%) has been affected by the lower prices of the electricity pool.

Ebitda was €22.4 million, with a significant increase of 82%. This means a business margin of 7.7%, an improvement on the 6.5% of last year.

The portfolio has also recorded a positive evolution (+6%) up to €2,548 million, with the international component, which has grown by 55% up to €526 million, being particularly notable.

In the first nine months of the year, Sacyr Industrial was awarded its first contract in Ecuador: the construction of a cement plant in Chimborazo for €150 million. It has also entered Chile thanks to maintenance contracts for electricity grids and the construction of substations, and has extended the portfolio of Sacyr Nervión in maintenance of installations, and that of EPC with Sacyr Fluor.

At 30th September, the financial results (€-154.6 million) have improved by 17%. The group's net financial debt following the derivatives operation amounts to €4,021 million. Of the total debt, €2,380 million are related to company activities, of which €1,855 million correspond to concessional projects (87% of it is very long-term financing), which is covered with the cash flows generated by the operations (ebitda of €261.6 million up to september). A further €1,088 million correspond to the credit for the 8.4 % shareholding in Repsol, the financial cost of which is covered with the dividend and whose surplus is set aside for successive partial amortizations.