- Revenues up 6.6%
- International revenues accounted for 39.5% of the total
FCC's revenues in the first half of 2008 amounted to 7,047.5 million euro, a 6.6% increase on the same period of 2007.
FCC's internationalization strategy is an ongoing success, and international revenues now account for 39.5% of the total, 6 percentage points more than last year. Europe accounted for 86% of foreign business, the USA for 6%.
Operations outside Spain performed well despite the exchange rate effect: sterling depreciated by 11.2% against the euro in the period, which particularly affected the Services division, and the US dollar depreciated by 13.1% against the euro, which had a negative impact on the Cement business.
The backlog of works and services amounted to a record 35.823 billion euro at 30 June 2008, 6.9% more than at 30 June 2007.
BREAKDOWN OF REVENUES BY BUSINESS (million euro) | | |
|---|
| June-08 | June-07 | % Change | % of 1H08 revenues |
|---|
| Environmental Services | 1,911.7 | 1,847.5 | 3.5 | 27.1 |
|---|
| Versia | 467.3 | 475.9 | -1.8 | 6.6 |
|---|
| Construction | 3,658.4 | 3,241.2 | 12.9 | 49.0 |
|---|
| Cement | 820.6 | 978.1 | -16.1 | 11.6 |
|---|
| Realia | 235.1 | 132.4 | n,a, | 3.3 |
|---|
| Torre Picasso | 12.9 | 10.0 | 29.0 | 0.2 |
|---|
| Concession | 5.2 | n,a, | n,a, | 0.1 |
|---|
| Other | -63.7 | -72.5 | -12.2 | -0.8 |
|---|
| TOTAL | 7,047.5 | 6,612.5 | 6.6 | 100 |
|---|
Servicios Medioambientales
Environmental Services (waste collection and elimination, street cleaning, water management, industrial waste treatment, etc.) increased revenues by 3.5% due to growth in Spain (+4.5%), while international revenues were negatively impacted by the depreciation of the pound sterling against the euro. Nevertheless, international revenues accounted for 37.3% of the total. Over half of international revenues were generated in the United Kingdom, where FCC is the leading municipal waste manager.
Versia
Versia, which covers non-environmental municipal services, experienced a slight decline in revenues. The main reason for the decline was the sale of the urban bus company in November 2007, coupled with the impact of the truckers' strike in June, which had a considerable negative effect on the logistics business. Urban Furniture (CEMUSA) and Vehicle Testing were the most dynamic areas, expanding by over 10%.
Construction
Construction experienced 12.9% growth, primarily as a result of 47.6% expansion in the international area, which amply offset the decline in business in Spain. The international business now accounts for 43.4% of total revenues in FCC's Construction division, focused mainly in the European Union countries in Central and Eastern Europe.
Cement
Consolidated revenues decreased by 16.1% as a result of poor performance in Spain, where sales fell by 17.3% as a result of lower cement consumption caused by a deceleration in residential building. The international business, which accounts for 25% of the total, was impacted by the adverse dollar/euro exchange rate and by good performance by consumption and prices in Tunisia, Argentina and Uruguay.
Real Estate
- Realia. FCC has fully consolidated Realia only since June 2007. Revenues decreased by 42.9% in the first half of 2008. The rental business expanded by 14.1% due to rent reviews and to higher occupancy rates in Realia's office buildings in Paris and Madrid.
In contrast, the residential arm was affected by shrinking demand in Spain. - Torre Picasso has been fully consolidated since 25 July 2007, after FCC acquired the 20% it did not own. The occupancy rate is 100%.
Infrastructure concessions
Starting in the first half of 2008, Globalvía (GVI) and FCC's other infrastructure concessions are presented together as a separate business area; previously, they were presented as part of the Construction division. Globalvía is proportionately consolidated, in line with FCC's 50% stake.
At 30 June, GVI's assets are: Sóller Tunnel (56.5%), Autopista Central Gallega (54.6%), Barajas Metro (100%), Castellón Multi-Purpose Port Terminal (78.7%) and Port Vell Marina (7.61%). Other concessions owned by FCC will be transferred to GVI in the coming months.
Earnings
EBITDA increased by 1.9% to 963 million euro.
BREAKDOWN OF EBITDA BY BUSINESS (million euro) | | |
|---|
| Amount | % of total | EBITDA margin (%) |
|---|
| Environmental Services | 318.7 | 33.1 | 16.7 |
|---|
| Versia | 46.1 | 4.8 | 9.9 |
|---|
| Construction | 198.6 | 14.3 | 5.4 |
|---|
| Cement | 250.6 | 26.0 | 30.5 |
|---|
| Realia | 123.3 | 12.8 | 52.4 |
|---|
| Torre Picasso | 11.1 | 1.2 | 86.1 |
|---|
| Infrastructure concession | -1.5 | -0.2 | -28.8 |
|---|
| Other | 16.1 | 1.7 | |
|---|
| TOTAL | 963 | 100% | 13.8 |
|---|
EBIT amounted to 611 million euro, just 0.3% lower, while earnings before taxes (EBT) totalled 372 million euro, compared with 761.9 million euro in the first half of 2007, which included 258.5 million euro in extraordinary gains on the Realia IPO.
Earnings attributed to the parent company amounted to 201.8 million euro in the first half of 2008, i.e. 59% less than the 491.7 million euro reported in 1H07; 73% of the decline is due to the aforementioned extraordinary gains.
At 30 June, the net financial debt amounted to 8,982.6 million euro. One-third of the debt is without recourse (project finance). Net financial debt with recourse amounted to 6,006.1 million euro, i.e. 2.9 times 2007 EBITDA.
Proforma earnings
Between January and May 2007, FCC carried its 49.16% stake in Realia by the equity method. After Realia's IPO in June 2007, FCC's 28.34% stake was fully consolidated.
For a homogeneous comparison between the first half of 2007 and 2008, proforma accounts were drawn up for the first half of 2007 in which the 28.34% stake in Realia is fully consolidated, and the extraordinary gains on the sale of part of Realia are eliminated.
This homogeneous comparison including the extraordinary gains from Realia reveals that revenues would have increased by 2.3%, EBITDA would have declined by 12.5%, EBIT would have been 19.1% lower, and net profit attributed to the parent company would have been 24.6% lower.
