OHL sales grow by 23% to September 2015
November 13, 2015
OHL has concluded the first nine months of the 2015 financial year with 22.9% growth in sales, to 3.1 billion euros, driven by the good performance of the Group’s three business lines: concessions, engineering & constructionm and developments.
Despite the excellent operating performance, the sharp drop in the inflation rate in Mexico, when comparing the first nine months of 2015 to the same period in the previous financial year, has significantly reduced the contribution by OHL México to the Group’s EBITDA and attributable net profit in terms of guaranteed IRR (by 92.1 and 54.6 million euros, respectively), which explains the decrease in these two figures on the consolidated level by 7.5% and 19.9%, respectively.
OHL’s determined wager on internationalization, with a presence in 31 countries on all 5 continents, has led it to generate 80.1% of its turnover and 98.8% of EBITDA outside of Spain. Likewise, these two parameters reflect a focus on the home markets, Canada, the U.S.A., Mexico, Peru, Chile, Colombia, Spain and the Czech Republic, accounting for 84% and 85%, respectively, in line with the geographical balance sought by the Strategic Plan 2020.
The first nine months of this financial year have been marked by two significant milestones:
-
Launch of the Strategic Plan. Presented in March of this year, the Plan’s main lines of action are to ensure cash generation and the financial self-sufficiency and sustainability of each division, place the Group’s engine of growth and center of gravity in its home markets, which will concentrate 85% of the Group’s total revenues in 2020, maintain a balanced backlog and build on its human capital, CSR and RDI.
- Capital increase in the amount of 1 billion euros. Completed with a 7.2x demand on October 30. This transaction opens a new stage for OHL characterized by sustainable cash generation, through the reinforcement of the mechanisms of risk control and the strengthening of the capital structure for addressing future growth.
Performance of the business lines
In terms of the development of the main business lines, it is important to mention the strong growth of Concesiones in the concession business lines, with sales and EBITDA from tolls up 17.3% and 20.3%, respectively, thanks to the excellent performance of the concessions in Mexico, which advanced 26.3% and 44.8%, respectively, in local currency.
In addition, Engineering & Construction achieved 23.8% growth in sales, to 2.6 billion euros, and has maintained EBITDA above 140 million euros, an amount very similar to the figure for the same period in the previous financial year.
Once again, international operations, particularly in the United States and in the Middle East, in the context of the Mecca-Medina project, have driven the activity of the Construction division. During the first nine months of 2015, awards were obtained worth more than 1.9 billion euros. In addition to the new contracts in the United States and Canada, the entry of the Group into the Norwegian market stands out with the award of the Ski project, a high-speed railway contract in the amount of 261.7 million euros.
This division’s short-term backlog is placed at 7.4 billion euros, representing approximately 28.4 months of sales, with 81.1% in home markets and only 21% involving large-scale projects (those worth more than 300 million euros). Of this backlog, 19.5% refers to work to be performed for the Group’s own concessions.
Financial sphere
In the financial sphere, mention should be made of the positive trend in the net recourse borrowings to September 2015 which, in homogeneous terms, that is, excluding financial transactions, increased by 488 million euros, in comparison to 719 million euros during the same period in 2014, improving 32.1%.
This improvement, which marks a change in trend, is the result of the application of the principles of the Strategic Plan 2020 to the Engineering & Construction business.
An additional highlight is the improvement in the average cost as well as the maturity profile of the Eurobonds. Thus, following the 325-million-euro transaction carried out this past March, the weighted average cost of the Eurobonds dropped 120 basis points (from 7.03% to 5.83%), and the debt maturities in the capital market have been eliminated for the next 5 years, up to 2020.
Likewise, another development to be considered is the offer for the buy-back of bonds in a maximum amount of up to 303 million euros, launched this past October and tied to the Company’s capital increase. Due to the positive impact of the increase on OHL’s credit risk, evidenced by the rise in the share Price of the three issues, the final result has meant the acceptance of only 37.6 million euros of the 2020 issue and 8.1 million of the 2023 issue.
As part of its mature asset rotation and recourse debt control policy, the Group has the sale of a number of non-strategic assets, belonging to the Engineering & Construction Division for the most part, currently in an advanced stage of negotiation, with the expectation that, taken together, these assets will contribute a net cash amount of around 250 million euros. As of this day and date, somewhat more than 75% of that target amount is already firmly committed (through the signature of purchase and sale agreements or mandatory offers), while the rest is expected to be achieved prior to the end of the year.
| Key figures (MM euros) | 9M15 | 9M14 | Var. (%) |
|---|---|---|---|
| Sales | 3.132,2 | 2.547,9 | 22,9 |
| EBITDA % /sales |
718,8 22,9 % |
777,1 30,5 % |
-7,5 |
| EBIT % /sales |
493,6 15,8 % |
660,4 25,9 % |
-25,3 |
| Attributable Net Profit % /sales |
70,1 2,2 % |
87,5 3,4 % |
-19,9 |