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FCC Group ends first half with a 54.8 million euro net profit

29/07/2016

FCC Group ends first half with a 54.8 million euro net profit

  • EBITDA increased by 1.3% to 374.6 million euros
  • Environmental activities (services, waste management and water) accounted for 84.3% of EBITDA 
  • Net interest-bearing debt has been cut by 1,069.8 million euro (19.5%) since end-2015, to 4,403.8 million euros, predominantly as a result of the equity issue
FCC Group ends first half with a 54.8 million euro net profit

FCC, the Spanish environmental services, infrastructure and waste management group, achieved  54.8 million euros in net profit in the first half of 2016, contrasting with a loss of 11.9 million euros in the same period of 2015. The improvement was driven by higher returns in the business areas and a sharp reduction in structural and administrative expenses, the contribution by affiliates, and the positive effect of repaying Tranche B debt using a Dutch auction procedure.

Affiliates contributed 72.8 million euros in income, mainly as a result of the haircut on Realia debt agreed upon with the lenders. This enabled the investee to contribute 44.8 million euros, and 16.4 million euros in dividends from a stake in a renewable energy company. Another extraordinary item was the sale of a 10% stake in Malaga Metro for 27.7 million euros. This transaction follows the receipt of the first payment of 83.8 million euros in the first quarter for the sale of 50% of Globalvia; the remainder, approximately 127 million euro, is due by February 2017.

Revenues declined by 8.7% year-on-year in the first half of 2016, to 2,887.7 million euro, mainly as a result of lower construction work in Spain. Other factors were the depreciation of sterling and the reduction of revenues due to the completion and entry into service, in May, of a water treatment plant (both in the Environmental Services area).

Net financial debt was reduced by 1,069.9 million euros (19.5%) since 2015 year-end, to 4,403.8 million euros. That reduction was due to the capital increase performed in March 2016 and also to containment of costs and capital expenditure, the sale of investees, receipt of the advance for commissioning a waste treatment plant, and  measures to protect and enhance cash flow.

Environment and Water
EBITDA increased by 1.3% to 374.6 million euros as profitability increased in all business areas and structural and administration expenses were reduced sharply; Corporate Services made a net positive contribution of 6.2 million euros in the first half of the year, contrasting with a negative contribution of 11 million euros in 2015. Environmental activities (services, waste management and water) are still the mainstay of EBITDA, accounting for 84.3%. The backlog amounted to 31,497.3 million euros at 30 June 2016, slightly below the figure at the same date in 2015.
 

MILESTONES IN 1H16

Expansion of FCC Board and appointment of Managing Director
The Shareholders' Meeting on 28 June approved a motion to expand the Board of Directors of FCC from 11 to 15 members. Four new directors were appointed: Carlos M. Jarque, first executive and CEO of FCC, who was appointed as member of the Board and CEO, and Miguel Ángel Martínez Parra, General Manager of Organisation and Finance, as executive directors; and Antonio Gómez García and Alfonso Salem Slim, as nominee directors.

Grupo Carso owned 61.11% of FCC upon completion of the takeover bid 
The mandatory takeover bid by Inversora Carso for FCC, which was launched in March, concluded on 15 July. Following settlement of the bid, 25.6% of capital which was owned by minority shareholders had accepted. Based on disclosures to the CNMV, Grupo Carso now owns 61.11% and is the largest shareholder of FCC, while Esther Koplowitz, with 20%, is the second-largest shareholder.

FCC Aqualia achieves record backlog after landing two new international contracts
FCC Aqualia ended the first half of 2016 with a backlog of over 15 billion euros, its largest ever. It achieved this record after obtaining two contracts to build water treatment plants. In Bogotá (Colombia), it will build and operate a wastewater treatment plant worth 96.4 million euros, which will serve 3 million people, and in El Alamein (Egypt), it will develop a desalination plant worth 114.6 million euros. 

FCC and Carso obtain first joint contract, in Mexico
This first contract is for the construction of a gas pipeline, with a budget of 225 million euros. It will be delivered by a joint venture between Carso and FCC Industrial, the company which heads this area of FCC's Construction division. The 630 km gas pipeline will supply power plants in northern and north-eastern Mexico by linking them to the existing gas grid.

Another divestment: sale of 10% of Malaga Metro for 27.7 million euro
In April, 10% of the Malaga Metro line 1 concession was sold for 27.7 million euros. This transaction follows the receipt of the first payment of 83.8 million euros in the first quarter for the sale of 50% of Globalvia; the remainder, approximately 127 million euros, is due by February 2017.
 

KEY FIGURES (million euro)