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FCC first-half profit up 6.7%


FCC first-half profit up 6.7%

FCC attained 100.9 million euro in net profit in the first half of 2011, a 6.7% increase over the same period of 2010. This result was underpinned by solid performance in the Environmental Services area (municipal and industrial waste management, street cleaning, park and garden maintenance, and end-to-end water management), where EBITDA increased by 11.8%. The group continues to expand its international activities, which provided 2.713 billion euro in revenues, almost 50% of the total. The international backlog also performed well, having expanded by 12.5%; as a result, the group's total backlog amounts to 37.034 billion euro, equivalent to over three years' billings.
FCC first-half profit up 6.7%

Baldomero Falcones, Chairman and CEO of FCC: "These first-half results evidence our major efforts to improve efficiency in all areas of the group; this initiative is essential not only to enable us to defend market share in countries where we are the main operator, but also to make us more competitive as we internationalise".

Revenues amounted to 5.480 billion euro in the first half, 4.1% less than in the same period of 2010. This was the result of steady growth in environmental services (2%) and international construction (10.3%), combined with a decline in the infrastructure business in Spain. The Energy division experienced a seasonal downturn in revenues due to lower wind levels.

Additionally, Versia's lower revenues were the result of divesting certain businesses at the end of 2010. In like-for-like terms, Versia's revenues expanded by 1.6%. The application of international accounting standards to operating permits for certain Versia contracts resulted in the downward adjustment in 1H10 figures, to a final figure of 94.6 million euro net profit.

Activity outside Spain continued to grow, accounting for 49.5% of Group revenues, an increase of 8.3%. International revenues are concentrated in Europe, which accounted for 83.7%, principally in the Construction and Environmental Services divisions. The remaining 16.3% comes from America (5.1% in the US and 6.1% in Latin America) and Asia together with Africa (5%).

Improved operating margin and lower debt
Operating expenses declined by 219 million euro, i.e. by almost the same proportion as revenues. As a result, EBITDA amounted to 678 million euro, practically the same as in the first half of 2010, while the EBITDA margin improved by 0.5 percentage points to 12.4%. EBITDA in the most recurring businesses (Services and Energy) increased 6% and set a new 6-month record, representing 61.2% of the total. EBIT amounted to 320 million euro in the first half, a 1.1% increase over 1H10.

Net profit totalled 100.9 million euro, 6.7% more than in the first half of 2010, while earnings before taxes (EBT) amounted to 127 million euro. That figure is 7.6% lower than last year, although income from equity-accounted affiliates increased to 20.2 million euro (compared with -2.5 million euro in 2010).

Net capital expenditure amounted to 269 million euro, mostly for maintenance. Notable investments in growth include 44 million euro in the Energy division, to build two solar thermal plants. The largest divestment in the period was at Versia, which raised 14.3 million euro from the sale of underground car parks under an agreement signed at the end of last year.

One of the notable interyear changes is in the FCC Group's interest-bearing debt. Net debt amounted to 8.313 billion euro at 30 June 2011, 3% less than at the same date in 2010.


FCC obtained international infrastructure projects worth over 2.200 billion euro
In the first six months of the year, FCC was awarded many large infrastructure contracts worldwide that are worth more than 2.200 billion euro in total. Among major railway contracts, the group is to build a 66-kilometre railway line in Algeria (1.232 billion euro).

FCC strengthened its environmental services backlog with new waste collection and treatment contracts
Notable contracts obtained in the first half of 2011 include the design, construction, and commissioning of a Waste Management Centre in Guipúzcoa plus a contract to operate it for five years, extendible for additional periods of 5 years (322 million euro). Additionally, in January San Sebastián city government chose FCC once again to provide municipal solid waste collection and transport services in the city for 10 years, with the possibility of an extension. The contract represents total revenues of 46 million euro.

Alliance with Commodore to develop infrastructure in the United Arab Emirates
FCC and Commodore, an Abu Dhabi company, have signed a strategic alliance to bid jointly for infrastructure development projects in the UAE. The alliance seeks to take advantage of plans for infrastructure development in the region (railways, ports, airports, roads and social amenities). Commodore is interested in FCC's experience in tunnel construction and high-speed rail.

Another bond issue by Alpine
In June, Alpine, the subsidiary that heads FCC's operations in Central Europe, successfully completed a 90 million euro bond issue with a 5.25% coupon. Strong demand led the company to increase the issue from the initial 75 million euro. This is FCC Group's third bond issue in the last year and a half, and Alpine's second, after having successfully raised 100 million euro in June 2010.

Strategic agreements to develop mobility with electric vehicles
FCC signed a strategic agreement with Siemens to develop and implement electric mobility technology. FCC will participate in Siemens' research projects and will be responsible for implementing the necessary infrastructure in the future. FCC also signed a partnership agreement with Citroën España and BlueMobility to promote electric vehicles in Spain. FCC will build the electrical installations for the charging points at Citroën vehicle dealerships, providing Automóviles Citröen España with battery charging equipment for its own fleet of electric and hybrid vehicles.


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+0.3 p.p

Income attributable to equity holders of the parent company