OHL records 15.0% increase in net profit in the first nine months of 2011

November 14, 2011

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Sharp reduction in net recourse debt of the Group, down by 16.1% in just three months

The OHL Group recorded a 15.0% increase in net attributable profit in the first nine months of the year, reaching €138.7 million. This result was obtained following a 22.9% increase in EBITDA and 40.4% increase in EBIT, and a slight decrease of 1.6% in sales, which amounted to over €3.587 billion.

The 15% increase in attributable net profit occurred despite a significant increase in minority interests, which have gone from €35.9 million in the first nine months of 2010 to €92.2 million in the same period in 2011, mainly due to the IPO of OHL Mexico in November 2010.

The parameters of the income statement reflect the OHL’s activities in the third quarter followed a similar trend to that recorded during the first half. The main earnings driver was again the core concessions business, in which the Group has achieved growth of 14.9%, 27.3% and 46.3% in sales, EBITDA and EBIT, respectively. With this strong growth, the EBITDA and EBIT of the Concessions division now account for 76.2% and 82.3%, respectively, of the Group total.

Sales in the Construction Division registered a decline of 15.7% due to the completion of major projects and the postponement of the implementation of the large international projects awarded, together with the weakness of the sector in Spain. However, the higher margin on the works carried out has allowed the division’s EBITDA to expand by 5.1% over 2010.

Nonetheless, the most relevant aspect of the construction activity remains the favourable evolution of backlog, which totaled over €6.194 billion at the close of the third quarter, representing an increase of 22.7% over that existing at the same date in 2010. This important backlog is in addition to the two major awards in October: The Marmaray project, railway superstructure for the connection between Europe and Asia under the Bosphorus Strait in Istanbul (Turkey), and the second phase of the Haramain High Speed Rail (HHR) project, a high-speed line between the cities of Mecca and Medina in Saudi Arabia. These two contracts represent €1.239 billion in work for OHL and, together with the existing backlog at 30/9/11, ensure the growth of the activity in the future and strengthen the Group’s leading international position in large civil works contracts. International activity in the first nine months accounted for 69.5% of Group sales and 90.2% of EBITDA. Spain, with 30.5% of sales, Brazil, with 23.3%, Mexico, with 14.1%, and the U.S., with 10.7%, are the four countries that provide the Group with the highest revenues.

Net recourse debt falls by 16.1%

Along with this evolution of business, in the area of financial policy it is very important to note the sharp reduction in net recourse debt achieved by the Group, which has gone from 1.6646 billion at the close of the first half, to 1.3959 billion in the third quarter, representing a reduction of 16.1% in just three months.

This reduction was achieved thanks to the major non-recourse financing operations carried out by OHL Concesiones, amounting to €350 million, which has allowed the return of a significant portion of the intra-group financing received from the parent company.

This effort to reduce recourse debt will continue in coming months in order to achieve a ratio of net recourse debt over EBITDA of less than 3 times at the end of 2011.

Also, the ongoing negotiations for the planned divestment of non-strategic subsidiary OHL Medio Ambiente Inima could be finalized within a few weeks.

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