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01/11 04:47
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with a 7.4% revenue growth and a 19.1% increase in adjusted EBITDA. The net cash position and comfortable order book add to the positive outlook. Despite some declines in specific areas, the company maintains optimistic guidance and a solid order pipeline. The Q&A highlights strong growth in average revenue per transaction and promising prospects in U.S. Managed Lanes. The focus on shareholder returns and strategic investments further supports a positive sentiment, likely leading to a stock price increase of 2% to 8% over the next two weeks.
Highways revenue Grew by 14.9% in the first half on a like-for-like basis. Adjusted EBITDA improved 17.1%, driven by strong performance from U.S. assets. U.S. highways revenue grew by 15.9% and adjusted EBITDA increased 14%. The growth was attributed to higher toll rates, increased traffic volumes, and targeted rush hour driving offers.
407 ETR revenue Revenue grew by 19.7% in the first half compared to the same period last year. EBITDA grew at double digits (13%) despite higher operating expenses due to Schedule 22 provision. Growth was driven by higher toll rates, increased account fees, and higher lease and enforcement fees.
Construction revenue Revenues reached EUR 3,453 million in the first half, 2.6% above the same period last year on a like-for-like basis. Adjusted EBITDA was EUR 191 million, up 4.2%, and adjusted EBIT totaled EUR 119 million, an increase of 11.2%. The adjusted EBIT margin was 3.5%, in line with the long-term target. Growth was attributed to strong performance in Budimex and improved margins in Ferrovial Construction.
Dalaman Airport revenue Revenue grew 10.4% in the first half while adjusted EBITDA increased 10.9%. Growth was driven by higher commercial income per passenger, partially offset by higher operating expenses due to inflation.
Net debt position Ended the first half with a net debt position of negative EUR 223 million for ex-infrastructure project companies. This figure does not include proceeds from the divestment of Heathrow, which was closed in early July.
Operating cash flow Negative EUR 104 million in the first half compared with negative EUR 53 million in the same period last year. The decline was primarily due to the lack of advanced payments in the first half of the year.
New Terminal One at JFK Airport: Construction advanced 72% by the end of Q2 2025, with key milestones and system integrations progressing. Secured commitments from 21 airlines, including 13 agreements and 8 letters of intent. Issued $1.4 billion in long-term green bonds for refinancing Phase A.
North American Highways: Revenue grew 14.9% in H1 2025, with adjusted EBITDA up 17.1%. U.S. highways contributed 88% of total highway revenues and 97% of adjusted EBITDA. Dividends from North American highways totaled EUR 240 million.
407 ETR in Canada: Acquired an additional 5.06% stake for CAD 1.99 billion, increasing ownership to 48.29%. Revenue grew 19.7% in H1 2025, driven by higher toll rates and traffic volumes. EBITDA grew 13% despite higher operating expenses.
Construction Division: Revenues reached EUR 3,453 million in H1 2025, up 2.6% year-over-year. Adjusted EBIT margin was 3.5%, in line with long-term targets. Record high order book of EUR 17.3 billion, with 45% in North America.
Operational Cash Flow: Negative EUR 104 million in H1 2025, impacted by lack of advanced payments and seasonality in working capital.
Divestments and Acquisitions: Divested entire stake in AGS Airports for EUR 533 million and mining services business in Chile for EUR 42 million. Acquired additional stake in 407 ETR for EUR 1.3 billion.
Strategic Focus on U.S. Highways: Shortlisted for bidding on I-24 Southeast Choice Lanes in Tennessee. Continued focus on U.S. highways with upcoming bids for I-24 in Nashville and I-285 East Atlanta in 2026.
Adverse Weather Impact: Heavy rain and adverse weather events negatively impacted the performance of U.S. Managed Lanes, leading to reduced traffic and revenue in some areas.
Construction Disruptions: Capacity improvement construction works affected traffic on NTE and LBJ highways, leading to declines in traffic and revenue.
Schedule 22 Provision: The 407 ETR accrued a provision of CAD 45.2 million in the first half of the year, impacting operating expenses and profitability.
Energy Plant Downtime: The Allerton energy-from-waste plant in the U.K. experienced unplanned downtime due to leaks in the boiler system, requiring repairs and future replacement of superheater tubes.
Inflationary Pressures: Higher operating expenses were noted in some areas, such as Dalaman Airport, due to inflation, which could impact profitability.
Negative Operating Cash Flow: The construction division reported a negative operating cash flow of EUR 104 million in the first half, primarily due to the lack of advanced payments.
Traffic Decline at Dalaman Airport: A slight decline in traffic at Dalaman Airport, particularly in domestic passenger volumes, could affect revenue growth.
U.S. Highways Outlook: Continued attractive pipeline of U.S. highways assets with bids for I-24 in Nashville and I-285 East Atlanta expected in the first half of 2026.
New Terminal One (JFK Airport): Construction remains on schedule and on budget, with 72% completion as of Q2 2025. Key milestones, system integrations, and advanced negotiations with airlines are planned for 2025. An additional EUR 63 million investment is pending for 2026.
407 ETR Performance: Promotions and demand segmentation strategies will continue to enhance value and maximize EBITDA growth. Dividends of CAD 450 million are planned for 2025, representing a 12.5% increase compared to the previous year.
Construction Order Book: Record high order book of EUR 17.3 billion, with 45% in North America. Limited exposure to inflation is anticipated.
NTO (New Terminal One) Financing: No additional capital investment required for the remainder of 2025. Some investment planned for 2026.
Dividends from North American highways: EUR 240 million in the first half of the year compared with EUR 339 million in the same period last year.
407 ETR dividends: CAD 200 million was paid in the first half and another CAD 250 million was approved to be distributed in the third quarter, representing a 12.5% increase compared to the same period last year.
NTE dividends: $108 million in the first half at 100%.
LBJ dividends: $52 million in the first half of 2025.
NTE 35 West dividends: $99 million in the first half.
I-66 dividends: $64 million in the first half at 100%.
I-77 dividends: $22 million in the first half at 100%.
Shareholder distributions: EUR 334 million distributed to shareholders in the first half of the year.
The earnings call summary highlights strong financial performance with record-high construction orders and plans for increased dividends. The Q&A session reveals optimism about future performance, despite some uncertainties in pricing and strategy. The company's strategic plans, such as highway bids and data center acquisitions, indicate growth potential. The shareholder return plan, including a significant buyback, further supports a positive outlook. However, some management responses lacked clarity, which tempers the sentiment slightly. Overall, the sentiment leans positive due to strong financials, strategic growth initiatives, and shareholder returns.
The earnings call reveals strong financial performance with a 7.4% revenue growth and a 19.1% increase in adjusted EBITDA. The net cash position and comfortable order book add to the positive outlook. Despite some declines in specific areas, the company maintains optimistic guidance and a solid order pipeline. The Q&A highlights strong growth in average revenue per transaction and promising prospects in U.S. Managed Lanes. The focus on shareholder returns and strategic investments further supports a positive sentiment, likely leading to a stock price increase of 2% to 8% over the next two weeks.
The earnings call summary presents a mixed outlook. Financial performance shows growth, with increased revenue and EBITDA, but competitive pressures and regulatory issues pose risks. The Q&A reveals management's reluctance to provide specific guidance, and analysts' concerns about traffic projections and governance details. Although shareholder returns are positive with dividends and buybacks, uncertainties in market demand and execution risks temper enthusiasm. The absence of a market cap and the presence of both positive and negative factors lead to a neutral prediction for stock price movement.
The earnings call reveals solid financial performance with revenue growth and surpassing EBIT margin targets. Share buybacks and a strong dividend increase also contribute positively. Despite some uncertainties in the Q&A, the overall sentiment is optimistic with a focus on growth and investment opportunities. The stock price is likely to react positively over the next two weeks.
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