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29 Jul 2016

Abertis reports 9% like-for-like increase net profit to €510Mn in first half

Abertis reports 9% like-for-like increase net profit to €510Mn in first half

  • Traffic grew in the main markets: Spain (+5.1%), France (+1.2%) and Chile (+4.6%).
  • EBITDA totalled €1,502Mn (+7% like-for-like) and revenue amounted to €2,243Mn (+5%).
  • The EBITDA margin improved to 67% on the back of efficiency plans.
  • Investment totalled €1,427Mn.
  • Noteworthy events include the outright acquisition of Autopista Central in Chile for €948Mn and the ten-year extension of Abertis' toll road concession in Puerto Rico.
  • The tender offer for the Brazilian subsidiary Arteris was also concluded.
  • In May Abertis completed a ten-year €1,150Mn bond issue with a coupon of 1.375%, the lowest ever for the company.
  • Road safety: Mortality (-9.7%) and accident (-4%) rates improved across the Group's toll roads, in particular in Brazil.
  • The Board concluded its reorganisation, resulting in a reduction in its size and a doubling of the number of independent directors.

Abertis' key figures improved in the first half of 2016, with growth in net profit (+9% like-for-like), EBITDA (+7% like-for-like) and revenue (+5%) in a period featuring a resilient recurring business, traffic increases and the addition of new assets to the consolidation scope following the acquisition of 50% of Autopista Central in Chile. 

Comparison of net profit between 2015 and 2016 is shaped by the capital gains from the listing of 66% of Cellnex Telecom in May 2015.

Consolidated figures in this period were affected by the negative exchange rate trends in Latin America (Brazil, Chile and Argentina). However, the increase in revenue helped to offset these effects and the Group ended the period with reported revenues of €2,243Mn, up 5% year on year.

Traffic continued to grow in the main markets. In Spain, the uptrend continued with traffic advancing by 5.1% compared with the same period of 2015. In international markets especially noteworthy growth was posted in Chile (+4.6%), France (+1.2%) and Puerto Rico (+0.7%).

With respect to road safety, the Group as a whole delivered improvements in accident (-4%) and mortality (-9.7%) rates, driven above all by the Brazilian market, where the number of deaths on the road decreased by 13%.

As for progress on the Strategic Plan, following the acquisition in January of 50% of Autopista Central, in May Abertis announced an agreement to acquire 51.4% of A4 Holding, which manages the A4 (Brescia-Padova) and A31 (Vicenza-Piovene-Rochette) toll roads. This transaction is expected to be concluded in the second half of the year.

The company is also pushing ahead with its plans to extend its concessions. It is currently negotiating in Chile and Argentina similar agreements to that reached in April in Puerto Rico to extend the concession periods for the PR-22 and PR-5 toll roads by ten years.

Income statement

Revenue in the first half totalled €2,243Mn, up 5% year on year, thanks to the increase in traffic and the inclusion in the consolidation scope of Autopista Central in Chile.

EBITDA totalled €1,502Mn (+10%), thanks, among other factors, to the strong operating performance. Excluding extraordinary effects, EBITDA increased by 7%.

The EBITDA margin improved to 67% in the period thanks to the progress of efficiency plans and the reduction in operating expenses.

Net profit increased to €510Mn (+9% like-for-like) in the first six months.                     

Business trends in the main markets

The international business accounted for around 70% of revenue in the first half.

France is the largest contributor to the Group's revenue (35% of the total) and EBITDA.  Abertis' French subsidiary, Sanef, reported 1.2% traffic growth in the period, with average daily traffic (ADT) of 23,284 vehicles.

Spain is the market with the largest growth in traffic (+5.1%), with an ADT of 18,064 vehicles. It accounts for 27% of consolidated revenue.

Chile increased its relative weight in the Group after acquiring 100% control of Autopista Central and is now the Group's third largest EBITDA contributor (11% of the total). ADT in the country stood at 25,638 vehicles, an increase of 4.6%.

Brazil provides 10% of total EBITDA. Political and economic instability in the country continue to hamper traffic growth, in particular in the heavy vehicle segment. ADT at Arteris, Abertis' subsidiary in Brasil, was 17,576 vehicles, 3.3% lower than last year.

In May the takeover bid for Arteris went ahead and was accepted by 96% of minority shareholders. Partícipes de Brasil II, controlled by Abertis and Brookfield, spent around €133Mn on 52.4 million shares in Arteris, which was delisted after the offer was approved by over two thirds of minority shareholders as stipulated in the prospectus.

Group capex

The Group's investments in the period amounted to €1,427Mn, of which €382Mn corresponded to growth and €29Mn to operational capex. The main growth projects in the period related to improvements and lane expansions on toll roads in Brazil (€195Mn) and the outlay of €99Mn for the extension of the concession in Puerto Rico. 

Also, the acquisition of a 50% stake in Autopista Central in Chile for €948Mn accounted for the investment.

Efficient debt management

Owing to the inclusion of Autopista Central in the consolidation scope, Abertis' net debt totalled €14,157Mn in the first half compared with €12,554Mn at the end of 2015. However, the net debt/EBITDA ratio decreased from 4.7x (December 2015) to 4.6x (June 2016).

Of total debt, 63% is secured by the company's own projects (i.e. non-recourse). The percentage of debt at fixed rates rose to 90% and average maturity is 5.8 years.

In May, Abertis completed a ten-year €1,150Mn bond issue (maturing in May 2026) with a fixed annual coupon of 1.375%, the lowest ever for the company.

Corporate governance

Throughout the first half of 2016, Abertis restructured and simplified its governing bodies in keeping with its commitment to business transparency and in accordance with sound international corporate governance practices.

Since 2009, the number of Board members has been cut from 21 to 15 while the proportion of independent directors has doubled from 20% to 40% of the total and the number of female directors has increased from one to six. This means that 40% of the total are now women following the appointment in June of Marina Serrano y Sandrine Lagumina.

The changes to the Board of Directors have been replicated in the Group's other governing bodies, such as the Executive and other committees, which have been streamlined and include a larger number of independent members.

On 27 July, the Board accepted the resignation of Tomás García Madrid, representing OHL Emisiones SAU, following the recent reduction in the Grupo Villar Mir's stake in Abertis. Following this resignation, the Board has 14 directors (7 representing substantial shareholders, 6 independent directors and 1 executive director).