The OHL group ends the third quarter with 8.2% growth in EBITDA

The OHL Group has obtained satisfactory results in the first nine months of 2014, both in operating terms (EBIT and EBITDA) and profit before taxes, as reflected in the following growth figures:

• Sales: -1.8 %
• EBITDA: +8.2 %
• EBIT: +11.8 %
• Profit before taxes: +11.2 %

Together with this positive performance, the attributable net profit has been weighed down by the tax on profits and by greater minority interests (following the capital increase by OHL México), as well as by certain non-recurring charges and higher financial expenses. Excluding these effects, the recurring attributable net profit totals 105.7 million euros, declining 26.6%.

At the same time, sales totaled 2.5 billon, falling slightly by 1.8% with respect to the figure in the same period during the previous year, although at a constant exchange rate this figure would have shown 2.2% growth.

In the Concessions Division, toll revenues grew 14.6% thanks to the positive trend in traffic flows and toll rates, although in the division overall sales were down 3.9% due basically to the reflection in the books of the downturn in construction activity (both the division’s own activity as well as work subcontracted to third parties) in Mexico with respect to the previous period, due to the completion and start-up of the concessions.

Sales by OHL Construcción were up 2.1% driven by the Group’s international operations (particularly in Latin America, the U.S. and the Middle East), which account for 81.6% of the total. This growth has taken place both outside of the country as well as within Spain.

International operations continue to play a highly significant role within the Group and accounted for 75.7% of sales, 96.3% of EBITDA and 87.3% of the total backlog. The breakdown by geographical area of the sales is set out below:

• Central and South America 26.7 %
• Spain 24.3%
• U.S.A. and Canada 18.1 %
• Central and Eastern Europe 14.4 %
• Middle East and North Africa 15.3 %
• Others 1.2 %

The 8.2% growth in EBITDA (13.9%, at a constant exchange rate) is due, basically, to the Concessions business where EBITDA increased 15% thanks to the contribution by Mexico. This strong growth has taken place despite the 5.4% devaluation of the Mexican peso against the euro, which eroded 29.8 million euros from the EBITDA obtained by this division, which would have grown 20.5% at a constant exchange rate.

 

The attributable net profit totalled 87.5 million euros, because it includes non-recurring losses already recognized at the end of June 2014. Excluding these effects, the recurring attributable net profit totals 105.7 million euros, 38.3 million euros less than in the same period of 2013. 

 

In the context of contracting, the Group ended the third quarter with a total Construction backlog worth 8.5 billion euros, up 5.6% with respect to December 2013 and with significant international projects. Major awards obtained during 2014 include: the Atizapán-Atlacomulco toll road, for 337 million euros, the Bicentennial Viaduct (100 million), the Mexico-Toluca interurban train (242 million) and the Guadalajara light rail (97 million), in Mexico; the Eastern Américo Vespucio expressway and the Industrial Bridge over the Biobío River in Chile, for 284 and 100 million euros, respectively; the SR-826 and SR-93 express lanes and I-75, in Florida (U.S.A.) for 226 million euros taken together. These contracts, which total overall 1.4 billion euros, together with other awards on a smaller scale, have added 2.4 billion euros to the backlog since the beginning of the year.

The long-term backlog has reached the figure of 61 billion euros, representing a 19% increase with respect to December 2013. The award of 5 new concessions in 2014 deserves particular mention: two in Chile (the Eastern Américo Vespucio expressway and the Industrial Bridge over the Biobío River, not yet included in the backlog as the effective award is initially expected to take place in December), two in Mexico (the Atizapán-Atlacomulco toll road and the Puebla Elevated Bypass) and its first concession in Colombia (the Magdalena River 2 toll road). With these awards the OHL Group has reinforced its presence in Chile and Mexico and has entered the Colombian market, in which it had expressed its interest. With this, the number of direct toll road concessions of the Group has increased to 14, with a total of 1,001.5 km.

In the financial context, subsequent to the close of accounts for the third quarter, in October, the OHL Group sold 5% of its stake in Abertis to Inmobiliaria Espacio (head company of the Villar Mir Group). Likewise, the two parties signed a syndicate agreement for the coordinated exercise of the voting rights pertaining to their Abertis shares. Following this transaction, the OHL Group’s percentage in Abertis is now 13.925%, while the direct or indirect stake of the Villar Mir Group in Abertis is maintained at 18.925%.

This transaction is set in the framework of the OHL Group’s financial policy of maintaining the net recourse debt/recourse EBITDA ratio under 3x and has signified an influx of funds in the amount of 705 million euros which will be used for the reduction of debt in the following manner:

• Non-recourse, by 277 million (lifting the pledge on the 5% in Abertis)

• Recourse, by the remaining amount (after expenses and fees)

In addition, this transaction will bring about an appreciation (after taxes and expenses) of approximately 210 million euros in the 2014 financial year.

 

The Group continues to enjoy a sound financial position, based on the comfortable profile of maturity dates and the strong liquidity position (1.4 billion euros of recourse liquidity available at the close of accounts at the end of September 2014).  This position has been reinforced during the year through:

• An issue of Eurobonds in the month of March in the amount of 400 million euros, maturing in 2022

• The renewal of the Commercial Paper program (currently, 250 million euros)

The OHL Group in January-September 2014

The OHL Group in January-September 2014

Consolidated Figures	In millions of euros	Variation 3Q2014/3Q2013	Margin on sales (%)
			3Q 2014	3Q2013
Turnover	2,547.9	-1.8%	100.0	100.0
EBITDA	777.1	8.2%	30.5	27.7
EBIT	660.4	11.8%	25.9	22.8
Net profit	87.5	-41.0%	3.4	5.7
Recurring net profit	105.7	-26.6%	4.1	5.6
Total backlog	69,947.9	17.5%

Performance by Activity

Performance by Activity

Activities	Sales in millions of euros	Variation 3Q 2014 / 3Q 2013	EBITDA	Variation 3Q 2014 / 3Q 2013
Concesiones	343.5	-3.9%	626.8	15.0%
Construcción	1,929.2	2.1%	152.1	-9.4%
Otras actividades	275.2	-20.6%	-1.8	n.a.
TOTAL	2,547.9	-1.8%	777.1	8.2%