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ACS Group obtained a net profit of 330 million euros in the first half of 2022

28-07-2022
  • Sales reached € 15,415 million, growing by 15.6% compared to the previous year
  • EBITDA stood at € 816 million, up 10.7%
  • Backlog grew by 15.7% to € 69,397 million
  • Strong financial position with net cash of € 1,044 million, following the completion for CIMIC’s takeover bid for € 985 million euros

1. Consolidated Results

ACS Group’s net attributable profit in 1H 2022 amounted to € 330 million. Not considering in 2021 the contribution of the Industrial Services activity sold in December (215 million euros), as well as the negative impact (94 million euros) of  the value changes on the financial instruments linked to ACS’ shares, the Group’s Net Profit growth amounted to 43.7%.

All activities showed a good operating performance, highlighting the traffic recovery on Abertis’ highways over pre-pandemic levels. Specifically, Abertis’ contribution to the Group’s EBITDA and Net Profit improved by € 32 million and € 27 million, respectively.

Concessions’ activity, which included Abertis’ contribution (€ 52 million) and Iridium’s Net Profit, obtained a Net Profit of € 79 million.

On its side, Construction’s Net Profit grew by 8.0% to € 170 million.

The Services area, developed by Clece, obtained a Net Profit of € 16 million, up by 13.1%.

In 2022, the results from the sale of renewable energy assets, mainly 25% of the photovoltaic plants in Spain sold to Galp were included in the Corporation’s financial results.

2. Operating Results

EBITDA reached € 816 million, 10.7% higher than the previous year; Abertis’ contribution amounted to € 64 million euros (double than the previous year). EBIT stood at € 547 million, 13.6% higher than the previous year.

3. International Diversification

ACS Group sales in the first half of 2022 amounted to € 15,415 million, up 15.6% compared to the previous year, with all activities showing a solid performance; adjusted by exchange rates, sales grew by 7.9%.

Backlog as of June 2022 stood at € 69,397 million, growing by 15.7% (+6.5% adjusted by exchange rates).

4.  Results per Areas of Activity

4.1.  Construction

Sales in construction amounted to € 14,358 million, an increase of 16.1% compared to the same period of the previous year, thanks to the recovery of activity in both Dragados and Hochtief, as well as for the appreciation of the US dollar. Adjusted by exchange rate, sales grew by 7.9%.

North America’s sales, which represented 65% of total Construction sales, reached € 9,369 million showing a solid recovery after the impact of the pandemic in 2021, up 18.8% (7.5% adjusted by exchange rate). Meanwhile, sales in Asia Pacific amounted to € 3,336 million, continuing the recovery trend shown in previous quarters growing by 13.1%. Europe also grew by 10.6% thanks to the positive performance of the main countries in the region, Spain, Germany and the UK.

International sales reached € 13,664 million, representing 95% of the Construction activity’s total turnover, with North America and Australia being the most important markets. Sales in Spain represented 4.8% of the total.

Backlog as of June 2022 amounted to € 66,666 million, 95% international, with a 16.3% growth (6.6% adjusted by exchange rate).

Construction’s EBITDA accounted for € 669 million, with a 4.7% margin on sales.

The Construction business obtained a Net Profit of € 170 million, 8.0% more than the previous year.

4.2.  Concessions

Concessions reported a Net Profit of € 79 million compared to € 42 million in the previous year, improving both Abertis’ and Iridium’ performance.

Abertis

Abertis confirmed the recovery path with an average daily traffic growth of 17.5% compared to the same period of 2021, outperforming pre-pandemic levels (+3.5% vs. 2019). This recovery in average daily traffic, as well as the contribution of the new concession acquired, rose revenues to € 2,427 million (+7.4%) and EBITDA to € 1,697 million (+9.2%), offsetting the loss of revenues due to the expiry of concessions in 2021 (Acesa, Invicat and Sol). Abertis’ Net Profit before amortization of the PPA (“Price Purchase Allocation”) and the financial costs of the hybrid bonds amounted to € 285 million, 8.5% more than the previous year.

In 1H 2022 Abertis’ contribution to ACS’s Net Profit reached € 52 million, compared to € 25 million in the previous year.

Iridium

On its side, Iridium, the Group’s concession development company, obtained a Net Profit of € 27 million, with a higher contribution from recently initiated concession projects.

During the first half of the year, 75% of the interest (33%) in the Windsor Essex concession in Ontario, Canada was sold.

4.3.  Services (CLECE)

Services to citizens division’s sales amounted to € 905 million, up 10.7% compared to the same period of the previous year and reaching pre-pandemic operating margins.

Net profit amounted to € 16 million, 13.1% higher than in the previous year.

Services’ current backlog reached € 2,731 million, equivalent to 19 months of activity, 3.9% more than in the previous period. Moreover, it is worth highlighting the weight it is gaining in the UK, where the backlog in 1H grew by 25.0% to € 256 million.

5.   Financial Situation

At June-end 2022, the ACS Group held a Net Cash position of € 1,044 million, compared to Net Debt of € 2,976 million 12 months ago.

In the last twelve months, the Group’s financial performance was determined by the sale of the Industrial Services business (€ 4,902 million in December 2021) and the recent takeover bid for Cimic (€ 985 million in May 2022).

Total remuneration to the Group’s shareholders in the last twelve months amounted to € 1,075 million, including the acquisition of treasury stock and the distribution of dividends both in ACS and to the minority shareholders of Hochtief and Cimic.

6.   Investments / divestments

During 1H 2022, in adittion to the acquisition of 22% of Cimic through a public takeover bid for a total amount of € 985 million, the Group invested in:

  • Equipment and machinery for the development of the Construction and Services businesses: € 91 million
  • € 87 million in the development of joint ventures in America
  • € 24 million in the acquisition of services for citizens’ businesses in the United Kingdom
  • € 20 million in concessions and energy projects

The Group also continued its assets rotation policy, divesting the following assets in 2022:

  • € 386 million related to the sale of SCE’s energy assets, mainly the sale of 25% of the photovoltaic plants in Spain, 75% of which were sold to Galp in 2020, and the associated pipeline.
  • Iridium’s concessional assets divestments amounted to € 84 million, including the sale of 75% of its stake in Windsor Essex Ontario in Canada.