Grupo ACS reaches a net profit in 2010
Turnover reached 15,380 million euros, virtually identical to that of 2009.
- Ordinary net profit for continuing operations amounted to 923 million euros, 10.3% up on the previous year.
- The works and projects order book sat at 28,777 million euros, 42.4% of this being international
Grupo ACS turnover in 2010 reached 15,380 million euros, which matched last year's figure. International sales represented 31.8% of the total, translating as a 23.1% increase.
Gross operating profit rose by 5.3% to 1,505 million euros, with a profit margin of 9.8%, a rise of 50 basis points.
Net profit reached 1,313 million euros - 32.6% less than in the same period of 2009, due to this period including extraordinary profit originating by the sale of 35.3% of Union Fenosa, 1,001 million euros, whilst capital gains of 384 million euros from the sale of 15.5% of Abertis was also included into 2010 figures.
Listed investee companies Abertis, Hochtief and Iberdrola contributed net profit amounting to 159 million euros.
Ordinary profit from continuing operations, i.e. excluding contributions from discontinued operations, was 923 million euros, which was 10.3% up on the previous year. Ordinary earnings per share rose by 14.6%.
The total works order book at the end of 2010 stood at 28,777 million euros, 0.7% more than two months ago and with a growth of 22.7% in the international order book, which now amounts to 42.4% of the total Grupo ACS order book.
Results by Business Area
The Construction division registered sales of 5,593 million euros, a drop of 8% on 2009. Yet during 2010, international sales grew by 34.6%, thus representing 33.4% of total turnover.
Gross operating profit for the area reached 393 million euros, thus maintaining the margin of 7% on sales, whilst net profit stood at 220 million euros, entailing a margin of 3.9% on sales figures.
The works order book at the end of 2010 was worth 11,087 million euros, equating to 24 months of production. A highlight is the development of the international order book, which now represents 49% of the total order book, having growth of 27.1% in the last twelve months, rising to 5,378 million euros.
Highlights from the results obtained in the international division in Europe include the construction of two 11.9 km long twin tunnels for the London underground railway line. Awarded projects worthy of note in North America include the construction contracts for the Windsor Essex highway, which connects the 401 highway in Ontario with the Interstate 75 in Michigan, the Fulton Street and 72nd Street subway stations in New York, the South Fraser Highway in Vancouver, a highway in the county of Maricopa, Arizona, and the canalization of the Puerto Nuevo river in Puerto Rico.
In South America, significant contracts have been secured such as that of the construction of a new container terminal in the Port of Buenos Aires, the section of the Route 5 motorway between Puerto Montt and Pargua in Chile and, in the same country, the Mapocho water treatment plant.
Important projects have also been contracted in Spain, including the extension of the M-509 motorway in Madrid, the AVE Levante section between San Isidro and Orihuela in Alicante, the La Sagrera station and the construction of a car park in Barcelona's Boqueria Market. The construction of a number of waste water purification stations in Castellón and Madrid have also been contracted, as well as the Malaga II Penitentiary Centre and projects in the ports of Gijón, La Coruña and Escombreras, Murcia.
The Environmental Services area registered sales of 2,562 million euros, a growth of 3.7%. This positive progress is principally due to the good performance of Facility Management, whose sales are up 6.7%. Sales in the Environmental Services division grew by 0.8%, supported by the expansion in the international market whose sales increased by more than 10%.
Gross operating profit in Environmental Services reached 311 million euros, which represents an increase of 2.2%, thus placing the profit margin on sales at 12.1%. Net profit increased 4.1% to 152 million euros.
The current order book for this area stands at 10,844 million euros, equivalent to 51 months of activity, and 1.1% up on that registered 12 months ago.
Most relevant projects awarded in the year include the project and works for the Antequera treatment plant, the renewal of the management contract of the Alicante treatment plant, and the Ceuta transfer station in Spain. Highlights in the international market include the construction and exploitation of a waste valorization point in Bayonne, France, waste collection in the Community of Vale do Sousa, Portugal and the towns of La Rochele and La Challeville, France, or the extension of the waste collection and treatment contract in the county of Hereford and Worcester, United Kingdom.
The Industrial Services division increased its sales by 4.5% to 7,158 million euros, with solid international activity representing 37% of turnover following a 16% increase.
Gross operating profit grew 19.6%, to reach 821 million euros. Net profit rose to 400 million euros, equating to 15.2% more than in the same period of the previous year.
The division closed the year with a works order book valued at 6,846 million euros , the equivalent to one year of production, which represents 5% more than last year and 50% of which originates from international contracts.
Some of the most important projects awarded during the last year in America include the renovation of the Manzanillo thermal power station, and the construction of a seaside terminal for liquid gas storage and distribution in Tuxpan, both in Mexico; in Brazil, the construction of a 120 Mw wind farm and the construction of a high voltage line (500kv) in the municipality of Araraquara; the construction of hydro-electric plants in Barro Blanco and Alto Maipo in Panama; and the installation of intelligent transport systems in I-595 expressway in Florida (USA).
In Europe, contracts obtained include the construction of the 400 MW combined cycle plant in Mittelsbüren, Germany; the expansion of the South Arne offshore oil platform; the construction of two topsides for a North Sea oil platform (Norway; and the construction of two water purification plants in Romania.
Highlights in the national market include the extension of the BBG regasification plant in Bilbao, the construction of a gas pipeline between towns of Linares, Obeda and Villacarrillio in Jaen, the implementation of signalling, communications, traffic control and protection and security systems in the Orense railway line, and the contract for maintenance of overhead power lines for the Madrid-Valencia high speed rail.
Indebtedness and net investment
Cash flow from operations before working capital adjustments amounted to 1,188 million euros, 5.6% more than in 2009. The positive progress of working capital has allowed cash flow from operations in 2010 to reach 1,377 million euros.
Grupo ACS continues developing its investment plan, which in 2010 totalled 5,112 million euros, principally focused on infrastructure and energy concession projects as well as the purchase of 477.5 million Iberdrola shares, equivalent to 8.7% of the electrical company's share capital, which entailed an investment of 2,753 million euros. Disposals, in turn, which amounted to 2,788 million euros, fundamentally corresponded to the sale of 15.5% of Abertis.
Total net indebtedness of Grupo ACS as at 31 December 2010 was 8,003 million euros. This figure implies a reduction for the year of 1,086 million euros, i.e. 12% and does not include debt associated with assets held for sales at the end of the year, principally renewable energy projects. Non-recourse financing accounted for 7,046 million euros whilst the rest of the Group held net debt of 957 million euros.
Of the total non-recourse debt, 1,481 million euros originated from the financing of concessions projects. The remainder (5,565 million euros) corresponds to debt of vehicles used for the acquisition of Hochtief and of 20.2% of the shares of Iberdrola that the Group held at 31 December 2010, which on said date has a stock market value of more than 7,725 million euros.
The financing of projects corresponds to the already mentioned important investment plan in concession assets. Specifically, investments in the Concessions areas in 2010 amounted to 729 million euros, including more than 181 million euros invested in the I-595 toll expressway in the US, and 226 million euros in the Diagonal Axis on Barcelona, whilst in Industrial Services 1,389 million euros have been invested principally in renewable energy projects, such as thermal solar plants in Spain, transmission lines in Brazil and wind farms in Mexico.
Lastly, in the Construction and Environment divisions net investment has been made to the value of 80 and 105 million euros respectively.