ACS focuses on Hochtief profitability growth
Sales accounted for 28,468 euro million, a 56.3% more than in the same period of last year.
12.11.2012
International activity accounted for 23,503 euro million and now represents 82.6% of the total
Recurrent net profit accounted for 566 euro million and, after the adjustment from the financial restructuring of Iberdrola and other extraordinary results, the net result accounts for
(1,099) euro million
Hochtief generates back net profits, 92 euro million up to September 2012.
Consolidated Results
The sales volume, backlog and operating results were the highest ever accounted in the Group in September, and the operating activities keep demonstrating an outstanding international growth potential, making ACS the leading infrastructure developer in the world, with presence in virtually all markets and proficiency in all types of infrastructure, both in civil, industrial and energy projects.
The turnover of Grupo ACS in the first nine months of 2012 amounted to 28,468 euro million, 56.3% more than the previous year. Growth in comparable terms, considering Hochtief sales in the first nine months of 2011, would reach 7.3%
International sales now account for 82.6% of total, reaching to 23,503 euro million. In comparable terms, the international growth was 16.7%, while activity in Spain has fallen by 22.3% down to 4,965 euro million.
By geographic area, sales in Asia Pacific represent 40% of the total, whilst Europe and America represent almost 30% each, demonstrating the Group's geographical diversification strategy.
Total backlog in September 2012 amounted to 66,865 euro million, with a 7.5% growth. It is important to highlight the growth of the international backlog, which now represents 82.9% of the total.
EBITDA grew by 51.1% to 2,320 euro million, with a margin on sales of 8.2% Meanwhile EBIT increased by 24% 1,187 euro million, with a sales margin of 4.2%.
Grupo ACS results of the period are strongly affected by the macro situation and the capital markets evolution, which led the Group to deeply restructure of its Iberdrola investment.
Recurrent net profit of the period, which does not include extraordinary results of any kind, accounted for 566 euro million, showing a decrease of a 17.1% due to the lower contribution of the Construction activity and the disposals of some assets in Environment, like Clece and Consenur.
Hochtief is back in September 2012 to the positive net results, accounting at the end of these first nine months of the year a net profit of 92 euro million.
The different extraordinary effects that have impacted the net result are summarized as follows:
Asset disposals of the period:
Iberdrola 3.7% sale from last April, performed to significantly reduce debt, has accounted for a net capital loss of 599 euro million
Abertis 10% sale, also performed in April, granted net capital gains of 188 euro million.
Net capital gains after the disposal of other assets accounted for 46 euro million.
Additionally, in the period the company has accounted several accounting adjustments and provisions, also impacting net results:
Last June, an impairment test has been carried out on Iberdrola investment, determining a fair value of 5.6 euro per share. According to accounting principles, a net adjustment of value has been accounted for 962 euro million.
Additionally, during the month of July the Group completed a deep refinancing process of our investment vehicles on Iberdrola, allowing for risk mitigation and a reduction on margin call requirements. For these transactions, and others related to the restructuring of Iberdrola, the Group has recorded costs that accounts for 256 euro million.
Finally, other value adjustments contribute with an additional negative impact of 81 euro million.
The combined effect of all these concepts has deteriorated the period’s net result down to a negative 1,099 euro million.
Net Debt
The Grupo ACS net debt has been reduced in the last twelve months by 5% and by 30th of September, 2012, amounted to 9,214 euro million, of which 1,882 million correspond to Hochtief AG
The other activities accumulate a debt of 7,332 euro million. Out of this figure, 2,641 euro million correspond to the net debt of the vehicles used to acquire Iberdrola shares.
Additionally, ACS has refinanced the debt in these two vehicles, Residencial Montecarmelo and the Natixis “equity swap”.
In Montecarmelo, with a debt of 1,599 euro million, the margin calls have been eliminated, and by signing a derivatives contract, ACS has eliminated the downside risks of the stake held by the vehicle, whilst keeping a certain upside potential for market prices rises. The maturity of this contract has been extended to July 2015, and can be settled by shares or cash at ACS’s will.
In the case of the Natixis equity swap, of 1,434 euro million, the debt was reduced by 1 billion and the margin calls were significantly reduced. The maturity of this contract was extended to March 2015.
Cash Flow and Net Investments
Cash flows from the operating activities have been affected by the recent evolution of Hochtief, impacted by a one-off deterioration of its working capital from its affiliate Leighton, and after the Iberdrola refinancing costs assumption. Not including these extraordinary effects, the cash flows from the rest of the activities grow by 18.8% up to 493 euro million.
In the first nine months of 2012 the gross investments accounted for 1,963 euro million, whilst disposals reached 2,432 euro million.
Operating investments in Construction correspond basically to machinery acquisition for mining contracts of Leighton, for aprox. 770 euro million, whilst concessional projects account for 451 million.
Industrial Services investments have been dedicated mainly to energy projects as thermosolar plants and wind parks (111 euro million), transmission lines (129 euro million) and gas storage facilities (48 euro million).
Among the disposals, the most relevant are the sale of 263 million shares of Iberdrola for 968 euro million and the 897 euro million obtained after the sale of the 10.28% of Abertis.
Results by areas of activity
Construction
Construction achieved sales of 21,814 euro million, 9.6% more than in the first nine months of 2011 in comparable terms, including Hochtief sales in both periods.
International Construction sales have grown substantially to 20,155 euro million, a figure that now represents 92.4% of total turnover of the activity.
EBITDA of the area reached 1,511 euro million, bringing the margin to 6.9% on sales. Net profit stood at 147 euro million.
Backlog at the end of September 2012 stood at 50,118 euro million, equivalent to 20 months of production. International backlog now represents 93% of the total Construction backlog.
Amongst the most important awards of the period stand the following:
Five-year contract for the whole management of the Solomon Hub iron ore mine, including operating and maintaining the open cut mining fleet, ore handling plants and associated infrastructure (Australia)
Construction of the marine facilities for the LNG plant in Curtis Island, Australia
Project for construction of S-8 highway between Sieradz Poludnie and Lask (Poland)
Five year coal mining contract to provide services for the delivery of coal at Muara Teweh (Kalimantan, Indonesia)
Western Highway Duplication: construction of a fully divided four-lane road and a bypass to the south of the Trawalla township (Victoria, Australia)
Design and Construction of Interstate 405 Bellevue to Lynwood (Washington, USA)
Construction of a tunnel for a new Stuttgard railway station
Construction and maintenance of the high-speed railway line between Olmedo and Pedralba (Valladolid, Spain)
Construction of several tunnels (highway and railway) , Norway
Construction of Madrid-Galicia high speed railway line between Prado and Porto (Orense, Spain)
Industrial Services
Sales at Industrial Services have reached 5,391 euro million, the same level of activity than last year despite the falling domestic market activity of a 16.7%.
International sales grew by 18.3% to 3,044 euro million, and now account for 56.5% of the total. This increase comes from new production in countries like Mexico, Brazil, United States, Peru and Northern Europe.
EBITDA grew by 1.9% to 666 euro million. Ordinary net profit accounted for 329 million, growing by 0.2% compared to the previous period.
The backlog of the area accounted for 7,131 euro million, equivalent to 12 months of production, being 64.7% of the total from international contracts.
Among the most significant awards obtained during 2012 include:
Procurement and construction of an oil pipeline with an extension of 77 kilometers for the oil offshore platform Enlace Litoral
Management and construction of a high-voltage overhead transmission line between the states of Rio Grande do Sul, Santa Catarina and Parana (Brazil)
Construction of photovoltaic plant with an installed capacity of 75 MW in Postmasburg (South Africa)
Procurement, installation and commissioning of hospital equipment for the Ministry of Health of Angola.
Technical services for the Peruvian company Edelnor in medium/low tension transmission line areas (Peru)
Engineering, procurement, construction, loading and mooring a drilling platform in Campeche in the Gulf of Mexico.
EPC project for the construction of material handling infrastructures and other mining infrastructures related to the bauxite mine of Ma’aden Bauxite and Alumina Company in Saudi Arabia
Project for the construction of 4 wind farms (Marañon, Portobelo, Rosa de los Vientos and Nuevo Chagres) in Panama
Procurement of two gas turbines for the Parniaba combined cycle plant project (Brazil)
Works for the construction of pipeline gas transport between Apiay and Monterrey (Colombia)
Design, construction, operation and maintenance services for a waste water treatment plant in Australia, and development of auxiliary works related to the plant (Melbourne)
San Fermín photovoltaic plant construction with an installed capacity of 20 MW (Puerto Rico)
Improvement works for distribution networks in Dominican Republic
Contract for the Murcia street light maintenance (Murcia, Spain)
Electricity transmission line development rrachida-Tinghir II- Ouazazate (Morocco)
Environment
Environment area achieved sales of 1,286 euro million, representing a growth of 0.4%. EBITDA reached 184 euro million, with a margin on sales of a 14.3%.
The net profit accounted for 204 euro million and includes the capital gains on the partial sale of Clece.
The backlog of this area stands at 9,616 euro million, equivalent to 68 months of activity, being a 43.7% from international markets.
Among the most significant awards of the period are::
Design, construction and exploitation of mechanical-biological treatment plant for urban solid waste in Essex (United Kingdom)
Urban waste collection, transport and street cleaning services contract in Boadilla del Monte (Madrid, Spain)
Contract for the operation of La Paloma biomethanisation plant (Madrid, Spain)
Street cleaning services for several areas of Madrid (Spain)
Contract for street cleaning services and urban waste collection in Melilla (Spain)
Contract for the management of Norte Sierra de Gredos urban waste treatment plant (Avila, Spain)
Gardening services for the city of Santander (Spain)
Urban waste collection and street cleaning in the area of Communes D'Ouardgha (Morocco)
Contract for urban waste collection in Iribarren and the south area of the city of Valencia in Venezuela
Recurrent net profit accounted for 566 euro million and, after the adjustment from the financial restructuring of Iberdrola and other extraordinary results, the net result accounts for
(1,099) euro million
Hochtief generates back net profits, 92 euro million up to September 2012.
Consolidated Results
The sales volume, backlog and operating results were the highest ever accounted in the Group in September, and the operating activities keep demonstrating an outstanding international growth potential, making ACS the leading infrastructure developer in the world, with presence in virtually all markets and proficiency in all types of infrastructure, both in civil, industrial and energy projects.
The turnover of Grupo ACS in the first nine months of 2012 amounted to 28,468 euro million, 56.3% more than the previous year. Growth in comparable terms, considering Hochtief sales in the first nine months of 2011, would reach 7.3%
International sales now account for 82.6% of total, reaching to 23,503 euro million. In comparable terms, the international growth was 16.7%, while activity in Spain has fallen by 22.3% down to 4,965 euro million.
By geographic area, sales in Asia Pacific represent 40% of the total, whilst Europe and America represent almost 30% each, demonstrating the Group's geographical diversification strategy.
Total backlog in September 2012 amounted to 66,865 euro million, with a 7.5% growth. It is important to highlight the growth of the international backlog, which now represents 82.9% of the total.
EBITDA grew by 51.1% to 2,320 euro million, with a margin on sales of 8.2% Meanwhile EBIT increased by 24% 1,187 euro million, with a sales margin of 4.2%.
Grupo ACS results of the period are strongly affected by the macro situation and the capital markets evolution, which led the Group to deeply restructure of its Iberdrola investment.
Recurrent net profit of the period, which does not include extraordinary results of any kind, accounted for 566 euro million, showing a decrease of a 17.1% due to the lower contribution of the Construction activity and the disposals of some assets in Environment, like Clece and Consenur.
Hochtief is back in September 2012 to the positive net results, accounting at the end of these first nine months of the year a net profit of 92 euro million.
The different extraordinary effects that have impacted the net result are summarized as follows:
Asset disposals of the period:
Iberdrola 3.7% sale from last April, performed to significantly reduce debt, has accounted for a net capital loss of 599 euro million
Abertis 10% sale, also performed in April, granted net capital gains of 188 euro million.
Net capital gains after the disposal of other assets accounted for 46 euro million.
Additionally, in the period the company has accounted several accounting adjustments and provisions, also impacting net results:
Last June, an impairment test has been carried out on Iberdrola investment, determining a fair value of 5.6 euro per share. According to accounting principles, a net adjustment of value has been accounted for 962 euro million.
Additionally, during the month of July the Group completed a deep refinancing process of our investment vehicles on Iberdrola, allowing for risk mitigation and a reduction on margin call requirements. For these transactions, and others related to the restructuring of Iberdrola, the Group has recorded costs that accounts for 256 euro million.
Finally, other value adjustments contribute with an additional negative impact of 81 euro million.
The combined effect of all these concepts has deteriorated the period’s net result down to a negative 1,099 euro million.
Net Debt
The Grupo ACS net debt has been reduced in the last twelve months by 5% and by 30th of September, 2012, amounted to 9,214 euro million, of which 1,882 million correspond to Hochtief AG
The other activities accumulate a debt of 7,332 euro million. Out of this figure, 2,641 euro million correspond to the net debt of the vehicles used to acquire Iberdrola shares.
Additionally, ACS has refinanced the debt in these two vehicles, Residencial Montecarmelo and the Natixis “equity swap”.
In Montecarmelo, with a debt of 1,599 euro million, the margin calls have been eliminated, and by signing a derivatives contract, ACS has eliminated the downside risks of the stake held by the vehicle, whilst keeping a certain upside potential for market prices rises. The maturity of this contract has been extended to July 2015, and can be settled by shares or cash at ACS’s will.
In the case of the Natixis equity swap, of 1,434 euro million, the debt was reduced by 1 billion and the margin calls were significantly reduced. The maturity of this contract was extended to March 2015.
Cash Flow and Net Investments
Cash flows from the operating activities have been affected by the recent evolution of Hochtief, impacted by a one-off deterioration of its working capital from its affiliate Leighton, and after the Iberdrola refinancing costs assumption. Not including these extraordinary effects, the cash flows from the rest of the activities grow by 18.8% up to 493 euro million.
In the first nine months of 2012 the gross investments accounted for 1,963 euro million, whilst disposals reached 2,432 euro million.
Operating investments in Construction correspond basically to machinery acquisition for mining contracts of Leighton, for aprox. 770 euro million, whilst concessional projects account for 451 million.
Industrial Services investments have been dedicated mainly to energy projects as thermosolar plants and wind parks (111 euro million), transmission lines (129 euro million) and gas storage facilities (48 euro million).
Among the disposals, the most relevant are the sale of 263 million shares of Iberdrola for 968 euro million and the 897 euro million obtained after the sale of the 10.28% of Abertis.
Results by areas of activity
Construction
Construction achieved sales of 21,814 euro million, 9.6% more than in the first nine months of 2011 in comparable terms, including Hochtief sales in both periods.
International Construction sales have grown substantially to 20,155 euro million, a figure that now represents 92.4% of total turnover of the activity.
EBITDA of the area reached 1,511 euro million, bringing the margin to 6.9% on sales. Net profit stood at 147 euro million.
Backlog at the end of September 2012 stood at 50,118 euro million, equivalent to 20 months of production. International backlog now represents 93% of the total Construction backlog.
Amongst the most important awards of the period stand the following:
Five-year contract for the whole management of the Solomon Hub iron ore mine, including operating and maintaining the open cut mining fleet, ore handling plants and associated infrastructure (Australia)
Construction of the marine facilities for the LNG plant in Curtis Island, Australia
Project for construction of S-8 highway between Sieradz Poludnie and Lask (Poland)
Five year coal mining contract to provide services for the delivery of coal at Muara Teweh (Kalimantan, Indonesia)
Western Highway Duplication: construction of a fully divided four-lane road and a bypass to the south of the Trawalla township (Victoria, Australia)
Design and Construction of Interstate 405 Bellevue to Lynwood (Washington, USA)
Construction of a tunnel for a new Stuttgard railway station
Construction and maintenance of the high-speed railway line between Olmedo and Pedralba (Valladolid, Spain)
Construction of several tunnels (highway and railway) , Norway
Construction of Madrid-Galicia high speed railway line between Prado and Porto (Orense, Spain)
Industrial Services
Sales at Industrial Services have reached 5,391 euro million, the same level of activity than last year despite the falling domestic market activity of a 16.7%.
International sales grew by 18.3% to 3,044 euro million, and now account for 56.5% of the total. This increase comes from new production in countries like Mexico, Brazil, United States, Peru and Northern Europe.
EBITDA grew by 1.9% to 666 euro million. Ordinary net profit accounted for 329 million, growing by 0.2% compared to the previous period.
The backlog of the area accounted for 7,131 euro million, equivalent to 12 months of production, being 64.7% of the total from international contracts.
Among the most significant awards obtained during 2012 include:
Procurement and construction of an oil pipeline with an extension of 77 kilometers for the oil offshore platform Enlace Litoral
Management and construction of a high-voltage overhead transmission line between the states of Rio Grande do Sul, Santa Catarina and Parana (Brazil)
Construction of photovoltaic plant with an installed capacity of 75 MW in Postmasburg (South Africa)
Procurement, installation and commissioning of hospital equipment for the Ministry of Health of Angola.
Technical services for the Peruvian company Edelnor in medium/low tension transmission line areas (Peru)
Engineering, procurement, construction, loading and mooring a drilling platform in Campeche in the Gulf of Mexico.
EPC project for the construction of material handling infrastructures and other mining infrastructures related to the bauxite mine of Ma’aden Bauxite and Alumina Company in Saudi Arabia
Project for the construction of 4 wind farms (Marañon, Portobelo, Rosa de los Vientos and Nuevo Chagres) in Panama
Procurement of two gas turbines for the Parniaba combined cycle plant project (Brazil)
Works for the construction of pipeline gas transport between Apiay and Monterrey (Colombia)
Design, construction, operation and maintenance services for a waste water treatment plant in Australia, and development of auxiliary works related to the plant (Melbourne)
San Fermín photovoltaic plant construction with an installed capacity of 20 MW (Puerto Rico)
Improvement works for distribution networks in Dominican Republic
Contract for the Murcia street light maintenance (Murcia, Spain)
Electricity transmission line development rrachida-Tinghir II- Ouazazate (Morocco)
Environment
Environment area achieved sales of 1,286 euro million, representing a growth of 0.4%. EBITDA reached 184 euro million, with a margin on sales of a 14.3%.
The net profit accounted for 204 euro million and includes the capital gains on the partial sale of Clece.
The backlog of this area stands at 9,616 euro million, equivalent to 68 months of activity, being a 43.7% from international markets.
Among the most significant awards of the period are::
Design, construction and exploitation of mechanical-biological treatment plant for urban solid waste in Essex (United Kingdom)
Urban waste collection, transport and street cleaning services contract in Boadilla del Monte (Madrid, Spain)
Contract for the operation of La Paloma biomethanisation plant (Madrid, Spain)
Street cleaning services for several areas of Madrid (Spain)
Contract for street cleaning services and urban waste collection in Melilla (Spain)
Contract for the management of Norte Sierra de Gredos urban waste treatment plant (Avila, Spain)
Gardening services for the city of Santander (Spain)
Urban waste collection and street cleaning in the area of Communes D'Ouardgha (Morocco)
Contract for urban waste collection in Iribarren and the south area of the city of Valencia in Venezuela