In 2015 the consolidation of a favourable economic environment has allowed the path of growth in activity to be followed in Spain, France and Chile, although the activity in heavy transport in Brazil was significantly reduced.
The Group continues to focus its efforts in very selective growth, in order to consolidate its position in companies it already has a stake in, as was the case in 2015 of taking control of Túnels and the purchase of minority stakes in I2000, and the agreement reached in January 2016 for the purchase of an additional 50% of Autopista Central, SA (Acsa) after which Abertis became the sole shareholder. Also Partícipes en Brasil is working on completing the acquisition of minority stakes in Arteris through a Takeover Bid.
Continuing with the strategy of focusing and optimization of the portfolio of assets, 66% of the share capital of Cellnex (formerly Abertis Telecom) was floated on the stock market in May 2015. In 2015 also the process of disposal of the airports business ended with the sale, at the end of April, of DCA, through which Abertis maintained a stake of 74.5% in MBJ Airports, Ltd. (Montego Bay, Jamaica) and 14.77% in SCL Terminal Aéreo Santiago, SA (Santiago de Chile).
The Abertis results for 2015 are affected by the incorporation of capital gains arising from the listing of 66% of Cellnex, which lifted the Group’s net profit to 1,880 million euro, an historic result. Stripping out exceptional results, as well as other effects and provisions, the like-for-like results for Abertis grew by 7%.
The attached P&L account presents at their net present value, revenue and expenditure for the construction or improvement of infrastructure carried out during the year (479 million euro in revenue and expenditure in 2015 and 689 million euro in 2014) which for the purposes of presentation in Abertis’ consolidated annual accounts are recorded separately in compliance with the provisions of IFRIC 12.
The revenues on transactions reached 4,378 million euro, which means a fall of 1.7% as against 2014, due principally, on the one hand, to the fact that the compensation for traffic guaranteed in the AP-7 agreement ceased to have an impact on the results for 2015 and, on the other hand, movements in the Brazilian real, with the average exchange rate showing a depreciation of 18% with respect to 2014. These negative impacts have been partially set off by good progress in activity and by the review of average tariffs in toll roads concessions; and the rise in exchange rates for the Chilean peso, American dollar and Argentine peso.
On a comparable base (that is, applying the same accounting treatment for the AP-7 during 2014 and at constant exchange rates) exploitation revenues was up by 5%, principally due to the positive performance of traffic during the year and the increase in tariffs.
The Group confirms the positive trend in traffic on its toll roads, which continues growing at a good rate in the company’s main markets. On toll roads as a whole, average daily traffic (ADT) has increased a 1.4% up to 21,976 vehicles. In Spain, the change of trend has been consolidated after seven consecutive quarters of growth. In 2015, traffic in Spain rose by 6.1%, the best figure for the last 15 years. There was a notably special impulse in heavy traffic, with growth of over 8%. Also, outside the Spanish market, there were important increases in Chile (+8.5%) and France (+1.8%), which continue developing above the company’s forecasts. On the other hand, a fall in the Brazilian GDP and industrial production has meant a reduction of 2.3% in traffic with respect to 2014.
The satellite telecommunications infrastructure sector also shows positive performance, as a consequence, principally, of increased capacity in orbital positions.
70% of Abertis’ revenues already comes from outside Spain. The French market is consolidated as the Group’s largest, contributing 37% of total revenues, followed by Spain, with 30%. Brazil, with 18% of the revenues and Chile, with 5%, complete the more relevant contributions.
EBITDA reached 2,692 million euro (-7.5%), although when discounting non-recurrent impacts, the like-for-like Ebitda grew by 5%.
The Group’s operating results have been helped by the introduction of a series of measures for improvements in efficiency and the optimization of the exploitation costs, on which the Group will continue working in coming years. In this sense, after the Efficiency plan 2011-2014 ended above initial expectations, the Group has been working on the new efficiency plan for the period 2015-2017, which must allows the improvements obtained up till now to be consolidated, while continuing with improvements in operating efficiency and the optimization of costs.
The provisions registered by the Group, on the one hand, for impairment of the balance on compensation for traffic guaranteed in the AP-7 agreement (859 million euro, without considering the tax effect) on which Abertis and the Ministry of Public Works have differences in interpretation and, on the other hand, the impairment in the net assets of Arteris (763 million euro) due to the worsening of the macroeconomic situation in Brazil, have had a negative impact on the operating result (EBIT). In comparable terms, the EBIT grew by 12%.
The net financial result was -1,116 million euro, of which -743 million euro are from the financial cost of debt, which means an average cost of 5.1%, and the rest (-372 million euro) reflects other impacts, such as provisions made for the part corresponding to the financial updating of the balance for the guaranteed traffic of the AP-7 agreement (-123 million euro), the provision to cover the possible risk of presentation of an enforceable claim by the rest of the banks of Alazor (-117 million euro), and the costs of rupture paid for the refinancing transactions carried out by the HIT group (-92 million euro).
Equity method companies
The negative contribution of companies recorded by the equity method is a consequence principally of the impairment occurring during the year in the stake hold in Autema for an amount of 73 million euro, as a consequence of the Catalan Government’s unilatera amendment of the concessional contract.
Corporate Tax amounted to 2 million euro, including the positive tax effect associated with the provisions registered during the year. The taxation rates in the main countries where Abertis operates are the following: Spain, 28% (against a previous rate of 30%); France, 38%; Brazil, 34%; and Chile, 22.5% (against a previous rate of 21%).
Result of discontinued operations
The contribution of discontinued operations includes, principally, the capital gain obtained from the Cellnex IPO (1,741 million euro for the sale of 66% of its share capital and 925 million euro of revalorization of the 34% stake retained in Cellnex), and the capital gain of 40 million euro obtained from the sale of DCA.
The consolidated result for 2015 attributable to shareholders reached 1,880 million euro, showing historic growth of 187% with respect to 2014. In comparable terms, the net profit was up by 7%.
In 2015, Abertis generated a gross cash flow (before investments and dividends) of 1,527 million euros.
The Group’s cash flow is sufficient to sustain the investment plan that the company is carrying out to improve the infrastructure of its assets and also to maintain one of its principal strategic pillars, shareholder return.
(*) 2014 re-expressed considering the impact of the classification of the terrestrial telecommunications business as a discontinued operation in application of IFRS 5.
Total assets at 31 December 2015 amounted to 25,739 million euro, showing a reduction of 7% on the year-end 2014 re-expressed, principally, by the impact of impairments during the year, the impact of depreciation in the Brazilian real at the year-end and the impact of purchasing own shares after the Takeover affecting 6.5% of the share capital.
Of the total assets, around 53% corresponds to tangible fixed assets and other intangibles (basically, concessions) in line with the nature of the Group’s business and related with the management of infrastructures, having fallen slightly during the year as a consequence of disposal and impairment.
Net consolidated assets reached 5,349 million euro, 10.7% below the figure for the year-end 2014 re-expressed, affected principally by the impact of purchasing own shares during the year (-1,062 million euro, basically associated with the Takeover affecting 6.5% of the Abertis share capital), negative movements in conversion differences due to depreciation in the Brazilian real and to minority shareholders return of contributions made.
In spite of the impact of the additional dividend for 2014 (-296 million euro), the interim dividend for 2015 (-311 million euro), and the purchase of own shares (-1,062 million euro), consolidated net assets without considering non-dominant stakes were seen as up by 3.6%, principally due to the resul generated in the year.
The Group’s total investments in 2015 amounted to 1,074 million euro. The greater part of this (91%) was for expansion, mainly to increase toll roads capacity (especially those in Brazil dependent on the Federal State and those in France), the purchase of an additional 50% (less 1 share) of I2000 and 15.01% of Túnels, and Hispasat investments in new satellites.
The most important operational investments were associated mainly with toll booth renewals and modernization of the existing network.
On 21 January 2016, Abertis completed a purchase agreement with Alberta Investment Management Corporation (AIMCo) for the acquisition of an additional 50% of the share capital of Autopista Central, SA (Acsa) for 948 million euro.