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FCC Increases profit in the first quarter by 20.8% to 40 Million euro

07/05/2010

FCC Increases profit in the first quarter by 20.8% to 40 Million euro

FCC's net attributable profit amounted to 40 million euro in the first quarter of 2010, up 20.8% with respect to the same period last year. This improvement is attributable to the increase in revenues and profitability in the areas of environmental and municipal services and renewable energies, which are recurring and are experiencing an increase in demand.
FCC Increases profit in the first quarter by 20.8% to 40 Million euro

Consolidated revenues amounted to 2,586.8 million euro in the first quarter of 2010, down 7.2% year-on-year. Growth in Environmental and Municipal Services and Energy was offset by less activity in Construction and Cement, which were particularly affected by the very adverse weather conditions in the main areas where they operate (Central Europe and Spain for Construction, and USA for the Cement division).
 
EBITDA totalled 297.9 million euro in the quarter, down just 3.1% in 1Q09 (compared with a decline of 17% year-on-year in 2009), while the EBITDA margin improved 0.5 points to 11.5%.
 
The EBITDA margin in Services (Environmental and Urban) and Energy improved, and their combined EBITDA rose 14.4% to 172.4 million euro.
 
The international area (40% of group revenues) performed in line with Spain, with revenues falling 6.3% and 7.8%, respectively, due primarily to the impact of particularly harsh weather on the Construction and Cement businesses. 
 
Recurring business areas Environmental and Urban Services and Renewable Energies accounted for 57.9% of EBITDA.
 
EBIT amounted to 116.7 million euro due to a 5.7% increase in the depreciation charge in the quarter, which will foreseeably be diluted over the year. Additionally, period depreciation includes 17.9 million euro for assets that were stepped up on consolidation in the FCC Group.
 
At 31 March, net interest-bearing debt amounted to 8,384.9 million euro, i.e. 729.7 million euro more than at 31 December 2009, due primarily to a 669.0 million euro increase in working capital in the quarter. Working capital experiences seasonal fluctuations, particularly in the Construction division, rising in the first half of the year and then declining, in line with the projected faster pace of project execution.
 
 
Milestones in the quarter

FCC, in a 50:50 joint venture with Alpine, obtained the contract for a section of the D1 motorway in Slovakia. The 1.990 billion euro contract covers construction of the road (including 10.6 km of tunnels and 7.6 km of bridges) and subsequent management. The road is part of the Trans-European Transport Network (TEN-T) and is the country's primary transverse highway, connecting it with Austria and Eastern Europe. Financing is expected to be completed in the coming months.
 
Environmental services

Revenues in the Environmental division increased 3.8% in the first quarter of 2010; all lines of the business expanded. In addition to the increase in activities in the Environmental division in Spain and in Water, revenues in Industrial Waste rose 8.6%, reflecting the incipient price recovery in the sector and the regions where the business operated (USA and Iberian Peninsula).

Industrial Waste management, which accounts for 7% of area revenues, saw an 8.6% increase in revenues in the quarter due to the gradual recovery in average prices of commodities (oil, paper and metal); this division should also see an increase in volume in the coming quarters.
 
Aqualia

Aqualia, FCC Group's subsidiary specialised in end-to-end water management, obtained a number of contracts in 1Q10 totalling over 304 million euro. The company obtained a 35-year contract for end-to-end water management in Cartaxo (Portugal) worth 277 million euro.

It was also awarded four new contracts and renewed two existing ones in Albacete, Toledo and Cuenca provinces, representing more than 27 million euro in revenues. In February, the company closed financing for its first public-private partnership in Egypt for the design, construction and management (for 20 years) of a wastewater treatment plant in Cairo, representing 360 million euro in revenues.

 
FCC Construction and Alpine

Alpine, FCC's main construction company in Central Europe, obtained a contract in February to build a city railway tunnel in Karlsruhe (Germany) for 310 million euro. Alpine will be in charge of the design and special underground engineering works, in addition to the construction of roads and tunnels. It will also be responsible for the construction of the stations and tunnel ramps. Outside Spain, FCC Construction was awarded a contract by the Panama Canal Authority to build the new access channel from the Pacific to the Panama Canal, worth 187 million euro.

The group obtained a number of civil engineering projects in Spain, including the Bergara-Antzuola section of the new railway network in Guipuzkoa (Basque Country), valued at more than 106 million euro, and construction of railway station accesses in Sagrera, Barcelona (Catalonia), valued at 223 million euro.
 
Waste Recycling Group

FCC, which is increasing its foothold in the UK waste treatment and power generation markets, was awarded a 7-year contract through its UK subsidiary Waste Recycling Group (WRG) to manage municipal solid waste collection in Thurrock and subsequent treatment in Energy from Waste (EfW) plants. Close to 35,000 tonnes per year of residual waste collected will be bulked up at the Thurrock transfer station and sent to either the Allington EfW facility in Kent or to landfill for disposal.

WRG is also planning on developing up to 80MW of onshore wind power at its more than 100 waste treatment sites in the UK. FCC already has renewable energy capacity in the UK, Austria and Spain. WRG expects to present its first projects for official approval

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