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FCC obtains net profit of 200 million euro in the first nine months of the year

12/11/2010

FCC obtains net profit of 200 million euro in the first nine months of the year

FCC obtained net profit of 200.2 million euro in the first nine months of the year, on par with the same period of 2009 (201.9 million euro), and in line with company objectives. These results are attributable to the positive performance of the Services and Energy areas, which offset the decline in the Cement and Concessions business. 
FCC obtains net profit of 200 million euro in the first nine months of the year

The geographic diversification of FCC, which is controlled by Esther Koplowitz and headed by Baldomero Falcones, continued to bear fruit in the third quarter of the year. Revenues obtained outside Spain accounted for 45.4% of the total (4,013 million euro), an increase of 1.6 percentage points with respect the first half of 2010. Despite the better performance by activities outside Spain, revenues declined 5.2% to 8,845 million euro.

Services and Energy account together for 57.5% of the 1,035 million euro in EBITDA (which was 3.4% lower than in the same period of 2009). Efforts to improve efficiency and cut costs, which have been trimmed by almost the same proportion as the decline in revenues, allowed the EBITDA margin to improve 0.2 percentage points to 11.7%. 

The Environmental Services division saw solid growth in Environmental and Water activities, in addition to a recovery in Industrial Waste. The division's revenues increased 3.1% in the period to 2,740 million euro; all business lines made a positive contribution. The domestic business performed well and international business exhibited greater growth; the Water division outperformed due to the construction of two desalination plants in Algeria.

The Energy area increased revenues by 9.5% to 61.3 million euro as a result of higher wind power production (14.3%) in the first nine months of 2010. Average sale prices for wind and solar energy increased slightly with respect to the same period last year.

Despite the decline in activity in the Infrastructure and Cement areas, FCC's backlog expanded by 6.4% in the first nine months of the year, to 36,756 million euro. Activity outside Spain improved by 17.2% with respect to December 2009. Both Construction and Services registered double-digit growth, in line with the medium-term goal of increasing revenues from outside Spain to over 60% of the total (from 45.4% at the end of September 2010).

Revenues in the Construction division amounted to 4,788 million euro, i.e. an 8.7% decline with respect to September 2009. However, the division noted a significant improvement in its railway project backlog. In the first nine months of the year, FCC Construction obtained railway contracts worldwide totalling over 1,700 million euro.
At 30 September, net interest-bearing debt was 8,706 million euro, slightly more than at the end of June 2010 (8,572 million euro) and 1,051 million euro more than at the end of 2009, due primarily to a 977 million euro increase in working capital in the period. Working capital experiences seasonal fluctuations and, accordingly, is expected to decline notably in the fourth quarter, particularly in the Construction division and, to a lesser extent, in the Environmental Services divisions.

Versia: revival in demand

Municipal Services (Versia) is one of the Group's top-performing activities: revenue in the first nine months of the year expanded by 2.4% to 621 million euro. In particular, revenue from the Urban Furniture business increased by almost 20%.
 As for the two businesses with the greatest revenue, Handling and Logistics, the first saw demand gradually revive, while the second reported a 1.7% increase in revenue in the third quarter (the first improvement since the cycle changed in 2008), with the result that revenue declined by just -1.1% year-on-year in the first nine months of the year.

Highlights

The strategy to strengthen business outside Spain made great strides in the first nine months of the year. FCC Group landed close to 5.5 billion euro in new contracts in that period, ranging from the construction of a toll road in Slovenia to refurbishment of the TV broadcast building for the London 2012 Olympics.

FCC Construction is expanding rapidly in high-speed railways in Spain, clinching two projects in September worth over 120 million euro for sections of the Madrid-Lisbon line and the North-Northwest railway line in Palencia.

Aqualia was also awarded new contracts in Spain: in various cities in the provinces of Cádiz and Córdoba, totalling over 249 million euro; Castilla León and Castilla La Mancha, 217 million euro; Almería, 85 million euro; and in Moguer-Mazagón and Hinojos (both for end-to-end water management for 25 years) in Huelva, for 92 million euro.

FCC Services will manage collection of municipal solid waste, street cleaning, recycling centres, and beach cleaning in Castellón de la Plana under a 15-year contract worth 210 million euro in revenues. UK subsidiary Waste Recycling Group (WRG) was awarded a 7-year contract to manage municipal solid waste collection in Thurrock and subsequent treatment in Energy from Waste (EfW) plants. The residual waste collected will be bulked up and sent to either the Allington EfW facility in Kent or to landfill for disposal.  

On 30 June, FCC reached an agreement to sell 31 underground car parks (4 of which are under construction) to Mutua Madrileña for 120 million euro. The transaction is part of FCC Group's active asset management policy. The transaction will be booked in the fourth quarter.

In September, FCC reached an agreement with 14 financial institutions from Spain and other countries to extend the group's largest syndicated loan to 1,187 million euro. The maturity date was also extended, from May 2011 to spring 2014. The agreement extends loan maturity by three years and constitutes recognition by the markets of the financial solvency of the group, which has no major debt maturities in the next two years.