OHL increases its sales by 22.9 %, to 916.6 million euros, in the first quarter of 2015

The OHL Group ended the first quarter of 2015 with good results on the operating level. Sales grew 22.9 % with respect to the same period in the 2014 financial year, reaching 916.6 million euros, thanks to the good performance of all divisions of the Group, which present strong year-on-year growth figures.

The EBITDA figure for the first three months of the 2015 financial year was placed at 263.9 million euros, declining 5.4 % when compared to the same period in 2014, due mainly to the lower contribution by the Guaranteed Returns of the concessions division as a result of the effects derived from lower inflation. This effect will diminish in the course of the financial year in line with the forecasts for the trend in inflation.

Once again the Group’s international operations stand out, accounting for 77.5 % of its sales and 98.9 % of its EBITDA in the first quarter of 2015.

Performance by business line

The first quarter of 2015 has been characterized by strong growth in the concession business. The revenues and EBITDA from tolls increased 22.6 % and 25.7 %, respectively. Despite the good operating performance, the sharp drop in the inflation rate in Mexico during the first quarter of 2015 in comparison to the same period in 2014 (0.51 % in comparison to 1.43 %) has significantly reduced the contribution by OHL México in terms of Guaranteed Returns to EBITDA and to the attributable net profit of the OHL Group. Nevertheless, given that the inflation forecast for 2015 in Mexico is 3.2 % (compared to 4.1 % in 2014), this effect will tend to decline substantially in the course of the current financial year.

In the period referenced, Engineering and Construction obtained growth figures in sales and EBITDA of +23.4 % and +36.1 %, respectively, derived from the good performance of the three activities comprising the area: construction, industrial and services.

The growth in construction sales has been driven by the good performance of the Group’s international operations, particularly in the United States and Canada, whose sales increased 11.7 %, as well as by the recovery of Spain which has grown +10.5 % with respect to the same period in the previous year. The current backlog, worth 7.8 billion euros, is balanced and represents 33 months of sales. The 82.4 % is located in home markets and only 25 % is concentrated in major projects (with amounts greater than 300 million euros).

It is important to note the good performance of the industrial business whose sales placed at 89.4 million euros in the first quarter of 2015, more than three times the figure obtained in the same period during the previous financial year.

A significant development in the financial sphere was the issue of Eurobonds completed in March in the amount of 325 million euros, with an issue coupon accruing 5.50 % fixed interest and maturing in 2023. The funds obtained were used in April for the early redemption of the 425-million-euro issue, with a coupon at 8.75 % fixed interest and maturing in 2018. With this, the weighted average cost of the Eurobonds has decreased by 120 basis points (from 7.03 % to 5.83 %) and the maturity profile has been extended, with the first scheduled for 2020.

Strategic Plan 2015-2020

In March of this year the OHL Group presented its Strategic Plan 2015-2020. The main lines of action are: to ensure cash generation and guarantee the self-sufficiency and sustainability of each division, displacing the center of gravity and the engine driving the future growth of the company to the eight home markets in which it operates: the USA, Canada, Mexico, Peru, Colombia, Chile, the Czech Republic and Spain.

The Strategic Plan includes the target of keeping its maximum recourse leveraging ratio under 3x, combining the growth of all of its business lines with sustainable cash generation in each of the divisions, while keeping within a framework of financial discipline.