Rafael del Pino highlights performance by the main assets and Ferrovial’s solid financial position Published on 06/04/2017
- Rafael del Pino, Chairman of Ferrovial, emphasized revenue growth and the good financial position at the end of the year.
- Meeting in Madrid, the shareholders approved all of the items on the agenda, including the new Ferrovial Flexible Dividend program, and confirmed Philip Bowman and appointed Hanne Sørensen, both as independent directors.
Speaking at the Annual Meeting, Ferrovial Chairman Rafael del Pino told shareholders that 2016 was another good year for the company and its business, and he emphasized its strong financial position. He drew attention to the performance of the company’s main assets, such as highway 407 ETR in Toronto, the managed lanes in Texas, and Heathrow Airport, which “increased traffic and operating profit and distributed more dividends than the previous year,” he said. Del Pino also detailed the acquisitions and major new contracts during the year.
The shareholders approved all of the items on the agenda, including the financial statements and the new Ferrovial Flexible Dividend program, and confirmed Philip Bowman and appointed Hanne Sørensen, both as independent directors.
The Chairman referred to the company’s good performance, with revenues up 10.9% to 10.759 billion euro. EBITDA amounted to 944 million euro and net profit to 376 million euro, which, adjusting for one-off impacts, would have represented a 3% increase year-on-year.
Del Pino also discussed the backlog in Services and Construction, which set another record at 33.519 billion euro, 78% of which is located outside Spain. “We obtained contracts not only in Ferrovial’s traditional markets but also in more recent territories, such as Australia and New Zealand, and we seized opportunities in other countries, such as Slovakia, that offer a window of opportunity for the company,” he added.
“Broadspectrum is a highly strategic acquisition for Services since it provides a leading position in Australia and New Zealand, plus penetration in the United States and a stronger presence in Chile. Integration of Broadspectrum is proceeding on schedule,” he noted.
Following the Broadspectrum acquisition, Australia is now a core market for Ferrovial, alongside the United Kingdom, the United States, Canada and Poland. Those countries, together with Spain, account for 93% of the company’s revenues on a proportionate consolidation basis.
The Chairman emphasized the company’s conservative approach and its financial discipline, while it continues to pursue investment opportunities in its target businesses and markets. The net cash position at end of 2016, excluding infrastructure projects, was 697 million euro, while consolidated net debt amounted to 4.266 billion euro. That figure includes 4.963 billion euro of infrastructure project debt, which declined from the previous year’s figure of 6.057 billion euro. In 2016, Ferrovial invested 985 million euro, excluding infrastructure projects, including a notable 706 million euro in Services.
Operating cash flow excluding infrastructure projects and before income tax amounted to 995 million euro. Services and Construction maintained their strong cash flow: 395 and 245 million euro, respectively. Toll roads provided 290 million euro in dividends, and Airports 134 million euro, due to good performance by 407 ETR and Heathrow airport. Ferrovial allocated 544 million euro to shareholder remuneration in 2016, 2.3% more than the previous year.
Rafael del Pino noted that “Integrity and transparency are our guiding principles in terms of corporate governance, since we believe them to be fundamental for building trust, managing risk and generating shareholder value.” During the year, Ferrovial updated its compliance model, approved a new Compliance Policy and amended its Crime Prevention Model and its Risk Control and Management Policy. It also amended its Internal Code of Conduct with regard to the Securities Markets to adapt it to EU regulations on market abuse and to CNMV recommendations on transactions with own shares.
The Chairman emphasized the company’s “unbending commitment to society,” as evidenced by its inclusion in the Dow Jones Sustainable Index (for the 15th consecutive year), FTSE4Good (12th year) and the Carbon Disclosure Project (9th year).
Traffic growth and new contracts
Ferrovial CEO Íñigo Meirás emphasized the good performance by the company’s main assets, including growth in traffic on toll roads in the US, Canada and Europe, and at Heathrow airport and the UK regional airports. He discussed business results and order intake in new markets.
The CEO listed the major new contracts obtained by Ferrovial during the year, such as a section of California High-Speed Rail; enabling works for high-speed rail in the UK; Interstate 66 in Virginia; the Bratislava bypass, in Slovakia; the Olsztyn bypass, in Poland; and the contract, obtained just last week, to build an 85 km stretch of the Grand Parkway in Houston.
Íñigo Meirás told shareholders that Ferrovial and its subsidiaries diversified funding sources in 2016 by tapping the capital markets, which reduced their dependency on bank loans, cut funding costs and extend their debt maturities. The CEO also noted that the company’s “zero accidents” target had resulted in a reduction of 25% in accident frequency and 23.2% in accident severity.
Lastly, Meirás discussed the company’s priorities for 2017, which include a continuing commitment to sustainable growth and financial discipline, focusing particularly on cash flow and operational management.
The shareholders ratified the appointment of Philip Bowman and approved the appointment of Hanne Sørensen, both as independent directors.
They also approved a shareholder remuneration program (flexible dividend) in similar terms to the previous three years, to be implemented in the form of two scrip issues. Based on Ferrovial’s share price, they are equivalent to the payment of a dividend of approximately 0.740 euro per share, exceeding that paid in 2016. The Board also proposed that the Shareholders’ Meeting approve a program to buy back a maximum of 19 million own shares, at a cost of at most 275 million euro; the shares would subsequently be cancelled.