FCC reduced losses to 52.7 million euro in the first half of 2014, 91.3% less than in the same period of 2013. The effect of the adjustments which commenced last year and greater profitability of the international activities are beginning to be felt: EBITDA increased by 32.2% with respect to the year-ago period, to 381 million euro.

 In March, a consortium including FCC Construction was awarded the contract to design and build line 2 of Lima Metro and a branch of line 4 for 3.3 billion euro. The projected execution period is five years, after which the 30-year operation period will commence. Additionally, an FCC Construction-led consortium has been awarded a contract in the Middle East to build the Red line of Doha metro (Qatar) for 250 million euro.

These contracts are only very partially reflected in the backlog, which increased to 6.306 billion euro at the end of June, guaranteeing more than 30 months' work, thanks to other international contracts in selected markets, such as Costa Rica, where the company will build a hydroelectric power plant and a sewer for 70 million euro. The Group's backlog amounted to 33.430 billion euro at year-end, 0.3% more than in 2013.

The collection periods from government sector clients also continued to normalise in the first half of 2014. FCC, the Citizen Services Group, received 71 million euro under the second phase of Spain's Second Supplier Payment Fund, which was approved in July 2013.
This Plan, together with new laws on trade accounts payable and electronic invoicing in the public administrations, aims to reduce the average period of payment by the public sector to its suppliers. Nevertheless, at 30 June, FCC had close to 400 million euro in past-due trade receivables from public administrations in Spain.

Income statement
Revenues totalled 2.966 billion euro in 2014, 3.7% less than in the same period of 2013. This change is due almost entirely to the temporary 14.5% contraction in Construction revenues, where international activity is expected to increase its contribution in the short term due to the commencement of contracts (e.g. Lima and Riyadh metros) in the second half. As a result, the 5.3% decline in Group revenues in Spain due to the adjustment in public spending on infrastructure in the Construction and Cement areas is expected to be gradually offset.

Additionally, the good performance of the Environmental Services and Water divisions broadly compensated for the ongoing decline in construction in Spain, which is still lagging other activities that are more advanced in the cycle. In the second half, the large volume of new contracts obtained outside Spain is expected to feed into revenues as the construction cycle in Spain progressively stabilises, providing growth in consolidated revenues for the year as a whole.

The EBITDA margin was 12.9%, compared with 9.4% in the same period last year. This performance reflects the impact of adapting the production structure of the construction business in Spain and a more moderate increase in the Water area, along with stable performance by the Environmental Services division.

Another milestone in the period was completion of the Group's refinancing process. As a result, net interest-bearing debt maturities had been extended at the end of June, and just 21.8% was classified as short term. This debt is concentrated mainly in the Cement area and in project finance, all of which is without recourse to the core business. At the end of June, a 450 million euro convertible bond issued by FCC, S.A. was classified as short-term debt; however, an agreement was reached in May to roll that bond over for a 6-year period (to October 2020), and it will be classified as long-term debt once the agreement is formally filed.

Nevertheless, net interest-bearing debt in June totalled 6.413 billion euro, 7.5% more than at December 2013; that figure does not yet reflect the impact of asset sales under way or the elimination of the seasonal increase in working capital in the first half, both of which are expected in the second half of the year.
 

KEY FIGURES (million euro)

REVENUES BY GEOGRAPHIC AREA