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ACS Group’s net profit rose by 20.5% in the first half of 2011 to 604 million euros

Sales revenues totalled 9.473 billion euros, 26.5% more than in the same period one year before.

30-08-2011
Consolidated Earnings
ACS Group’s turnover in the first half of 2011 amounted to 9.473 billion euros, 26.5% more than one year earlier. International sales amounted to 4.977 billion euros, 52.5% of total sales, representing an increase of 117.3%.
Gross operating profit (EBITDA) grew by 22.5% to 897 million euros, with a 9.5% margin over sales. Meanwhile, operating profit (EBIT) rose by 17.2% to 650 million euros, with a 6.9% margin over sales.
Net profit amounted to 604 million euros, 20.5% higher than in the first six months of the previous year. Recurring net profit, that is, the profit from continuing activities exclusive of extraordinary profit or loss and capital gains from the disposal of assets, rose by 14.2% to 541 million euros.
The total works portfolio at the end of the first half of 2011 amounted to 64.745 billion euros, with a substantial growth of the international portfolio by 352.0%—it now represents 78.7% of the total portfolio.

Earnings by Business Areas
Construction
The Construction area achieved sales of 5.009 billion euros, 59.6% more than in 2010 thanks to the consolidation of Hochtief by the global integration method as from 1 June 2011.
Therefore, the international sales of ACS Group’s Construction activity grew nearly four times, reaching 3.0615 billion euros, which represents 62% of total revenues from this business.
Hochtief invoiced 10.375 billion euros in the first half of the year, 8.9% more than in 2010. Out of this figure, ACS consolidated 2.075 billion euros, corresponding to the month of June 2011. All of Hochtief’s business is located outside Spain, mainly in Australia, the US, Canada and Germany.
This area’s gross operating profit (EBITDA) amounted to 350 million euros, setting the margin over sales at 7.0%, while net profit totalled 134 million euros, with a margin over sales of 2.7%.
The works portfolio at the end of the first half of 2011 amounted to 48,741 million euros, the equivalent of 22 months of production. The international portfolio now represents 90% of the overall portfolio.
Among the Group’s most important awards in the first half of 2011 are the mining contracts in Australia for the extraction of coal from the Burton and Poitrel mines, worth over 1.1 billion euros, the construction of the Royal Adelaide Hospital for over 650 million euros, the construction of a railway bridge and tunnel, the stations and viaducts for the South Island railway in Hong Kong, for over 400 million euros, the contract for the design and construction of the tunnel for the SR-99 road in Seattle (USA), totalling 438 million euros, the construction of the S8 motorway stretch between Lodz and Wroclaw in Poland, valued at 112 million euros, the construction and refurbishing works on the Forth Road Bridge in Scotland, a project worth around 950 million euros, and the remodelling of the Convention Center in Oakland, California, for around 225 million euros.
In Spain the most significant awards were the construction of the A-308 motorway between the towns of Iznalloz and Darro (Granada), with an investment of 73 million euros, and the construction of the waste water purifying plant in Estiviel (Toledo) for 20 million euros.
Industrial Services
Sales in the Industrial Services area grew in the first half of 2011 by 0.4% to 3.640 billion euros. International sales rose by 30.5% to 1.702 billion euros, 47% of total sales. This strong increase is due to new production in Latin American countries such as Mexico, Brazil, Chile and Peru. Strong growth was also recorded in the Asian market, which now represents around 10% of the international sales in the Industrial Services area.
Gross operating profit (EBITDA) grew by 16.4% to 451 million euros. Net profit amounted to 308 million euros, 66.7% than in the same period one year earlier.
This area ended the period with a portfolio worth 6.669 billion euros, equal to 11 months of production and with 52% from international contracts.
Among the most important awards secured in the first half of the year are the turnkey contract for 2 support facilities for the Eldfisk II oil rig in the North Sea (Norway); the construction of facilities for the storage and transportation of natural gas in Khafji (Saudi Arabia); the construction of a sea terminal and a plant for the storage of liquefied petroleum gas in Quito (Ecuador); the design, engineering, supply, construction and blow in of the system to obtain drinking water from the Aguas Negras canal in Chiapas (Mexico); and the construction of a 200 MW open-cycle power generation plant in the Lambayeque region (Peru).
In Spain the most important contracts that were awarded are the project for the construction of a thermal solar plant with a capacity of 50 MW in Caceres, the construction of a 36 MW wind farm in Bandeleras, Salamanca, and the works consisting of the electricity and air-conditioning installation in the Penitentiary Centre of Archidona (Malaga).
Environmental Area
The Environmental area achieved sales of 855 million euros, representing a 12.2% growth. The gross operating profit (EBITDA) of the Environmental area amounted to 130 million euros, setting the margin over sales at 15.2%. Net profit amounted to 71 million euros.
The current portfolio in this area totals 9.335 billion euros, equal to 70 months of activity and with 36% located abroad. The most relevant awards include the contract for gathering waste and cleaning the streets in Viladecans and Parets del Vallés (both in Barcelona); the contract for gathering garbage and cleaning the streets in the Gosport Borough Council in the UK, and the contracts in France for gathering garbage in the Boucle de la Seine area (Ille de France) and in the town of La Ciotat (Marseille).

Borrowing and net investment
The funds generated by operating activities in the first half of 2011 grew by nearly 27% to 581 million euros, supporting by the good operating profit and the integration of Hochtief by global consolidation in the month of June.
ACS Group continues to execute the investments it had planned, which in the first semester of 2011 totalled 2.587 billion euros, while divestments amounted to 769 million euros. The largest investment item, 982 million euros, was for the acquisition of approximately 19% of the share capital of Hochtief.
Construction activity included a net investment of 832 million euros, mainly in Infrastructure concession projects via Hochtief and Iridium. Thus Hochtief invested 448 million euros in June, including the second instalment of the payment for Budapest airport (250 million euros) and investments in Leighton (184 million euros), basically in equipment for the mining business. Iridium invested 381 million euros in the first half of the year, including the I-595 highway in Florida (96 million euros), the ‘Eje Diagonal’ motorway in Barcelona (75 million euros), and the South Fraser highway in Vancouver (76 million euros).
Investment in Industrial Services amounted to 536 million euros, including investments in thermal solar plants (228 million euros) and wind farms (55 million euros), as well as in power transmission lines (152 million euros), and the Castor project for the strategic storage of gas on the Mediterranean coast (41 million euros). Funds were also raised through the divestment from a number of renewable energy plants and power transmission lines in Brazil worth 495 million euros.
ACS Group’s net borrowing as of 30 June 2011 amounted to 9.849 billion euros, representing a reduction by 3.8% over the last 12 months.
Of the total net borrowing, 7.739 billion euros correspond to financing without recourse to shareholders, of which 5.686 billion euros correspond to the debt incurred in the instruments used to acquire shares in Iberdrola, while the rest has to do with the financing of concession projects (1.256 billion euros) and the holding in Hochtief (797 million euros).