The OHL Group records an 11.3% increase in net profit in the first quarter of 2011

The OHL Group’s first-quarter performance continued the trend of significant growth in operating margins and profit recorded in recent years. Over the same period last year, Group EBITDA and EBIT rose 29% and 41.3%, respectively, allowing net profit to do likewise with an increase of 11.3%, reaching €37.3 million.

This earnings growth was obtained based on sales of €1.003 billion, a 6.5% decrease over the same year-earlier period. Excluding the impact of IFRIC 12 accounting interpretations (relating to construction activity by third parties for the concession companies), the decline in sales was 1.9%.

The general sales trend is the result of a 15.3% decline in construction revenue, while total revenue for the concession companies expanded by 6.7% (33.1% without IFRIC 12). Domestic construction recorded a decline of 17.8% in sales due to the continued weakness in the economy in general and the construction industry in particular. International construction, meanwhile, registered a 13.3% decline due to the completion of major contracts in 2010, mostly in Mexico, and to the fact that, according to the established schedule, works have not yet begun on major contracts awarded in recent months.

The notable growth in EBITDA and EBIT is due, once again, to the strong boost provided by the Concessions activity. EBITDA and EBIT is the Concessions division jumped 35.9% and 40.8%, respectively, thanks, primarily to good trend in traffic levels and toll rates on the toll roads operated. The division’s contribution to Group EBITDA increased to 81.3%.

Construction activity recorded EBITDA growth of 6.3%, driven by improved margins in international activities.

Brazil, with 40.7%, and Mexico, with 39.2%, were the largest contributors to Group EBITDA in the first quarter. The U.S., with 4.1%, Chile, with 3.6%, and Qatar, with 2.5%, also surpassed Spain, which contributed 2.4%.

Short-term backlog (basically works contracts) also registered a significant upswing, expanding 35.4% to stand at €7.182 billion at the close of the first quarter.

International orders stand out, with short-term backlog totaling €4.380 billion, an increase of 85.3% over same-year earlier figure and of 38.9% over the 2010 close. This strong growth has been possible thanks to major contracts awarded in the late 2010 and early 2011, including the construction of a hospital in Montreal (Canada), the construction of a viaduct in Kuwait, the upgrading of several sections of the E30 railway line in Poland, the extension of the subway systems in Toronto (Canada) and New York (USA), and the main civil works for the Hydroelectric Project in El Quimbo (Colombia).

Long-term backlog (mainly Concessions) grew by 18.6% over the same year-earlier figure, reaching the significant amount of €77,391 billion.

In March of this year, OHL held a new €425 million corporate bond issue in Europe, maturing in 2018, to refinance the May 2012 maturities still outstanding from the 2007 issue. This issue demonstrates the Group’s prestige among the international investment community and significantly improves the debt maturity profile, eliminating refinancing needs.

OHL Group january – march 2011