The OHL Group closes 2011, its 100 year anniversary, with very satisfactory earnings

Obrascon Huarte Lain held its 2012 Annual General Meeting of Stockholders on May 8th. Juan-Miguel Villar Mir, backed by the Board of Directors, has submitted the financial statements for 2011, the year in which Obrascón, OHL today, celebrated its 100th anniversary. The chairman described the year as “especially noteworthy and satisfactory”, despite the adverse macroeconomic environment.

Juan-Miguel Villar Mir noted that the Group has grown in all major financial indicators, highlighting the significant advances of 23% and 40% recorded EBITDA and EBIT, respectively, on the operating level, along with the 14% increase in attributable net profit, which amounted to €223.3 million on sales on €4,869 million.

The Concessions division was the main driver of the Group’s earnings this year, contributing 76% of EBITDA and 81% of EBIT. The strong growth is due to the successful implementation of the strategy published in 2002, explained Juan-Miguel Villar Mir: “[the strategy] has led us to abandon the real estate business, anticipating the current crisis, to focus our investment efforts on infrastructure concessions and the execution of large and complex construction projects worldwide. And, always with absolute rigor, safety and financial discipline.”

Backlog at all-time highs

The OHL Construction division achieved significant international awards. The Division is participating in the three largest international railway projects: Meca-Medina, in Saudi Arabia, the largest contract achieved by a Spanish construction company abroad in all time; the Marmaray railway link between European and Asiatic Turkey in Istanbul and the Polar Ural project, the largest project ever awarded to the Group, with a price tag of €1,500 million. Other important works include the CHUM hospital in Canada, the Toronto subway extension and the Jamal Abdul Nasser urban viaduct of Kuwait City.

These contracts have boosted the Group’s backlog to €8.741 million, up 60% over 2010 and reaching record highs.

Debt reduction

On the financial side, the Group has reduced the ratio of net recourse debt to EBITDA to 3x at year-end 2011 (Proforma), thanks, among other things, to the divestiture of non-strategic assets, such as the sale of the Environmental Services Division.

OHL-Abertis Memorandum of Understanding

Regarding the content of the memorandum of understanding between OHL and Abertis, submitted for final approval to the Boards of Directors of both companies and the respective Annual General Meetings, Juan-Miguel Villar Mir highlighted that Abertis will receive the assets split from OHL, including 60% of OHL Brazil, valued at €1,530 million.

In turn, OHL will receive a 10% stake in Abertis, with a value of around €1,000 million, and the cancellation of €530 million in liabilities, with the payment being assumed by Abertis. Additionally, OHL will sell Abertis its concession assets in Chile for a cash price of approximately €200 million.

The operations referred to are pending various requirements and procedures typical of such procedures.

It should also be noted that OHL has acquired another 4.95% stake in Abertis, bringing OHL’s total holdings to 14.95%. This reorganization provides significant strategic advantages. OHL become a leading shareholder of Abertis and thereby strengthens its balance sheet, doubling the equity attributable to parent company (Proforma 2011), which jumps from €1,200 million to about €2,400 million.

Meanwhile, among the economic and financial benefits, in 2012 OHL will obtain a net profit of around €1,200 million and a reduction in total net debt of 29.1% or €1,417 million.