Intermoney | The company (Hold, PO €32) announced its 1H24 results yesterday after the close of trading in New York, and will hold a conference call today at 3pm. The key figures of the results, together with our forecasts, are shown in the attached table. Overall, EBITDA rose +50% to €603m at June 24, vs. +40% IMVe, which showed the contribution of new toll road assets, with lower growth than expected, but confirmed the recovery in margins in Construction in Q2, especially in Ferrovial Construction.
Ferrovial reported in H1 its net income figure of €414m, compared to our estimates of €151m, which included, among other extraordinary items, €166m of accounting capital gains from IRB (Indian concessionaire). We will revise our estimates after these figures, in which there is an upward bias in Construction, which we already raised in the Q1 results preview by an average of +6% during the period 24e-26e, both in Toll Roads and Construction, implying for the moment at consolidated level a CAGR in this variable of +13%.
Ferrovial’s revenues grew +8% in the first half (+5% MoMVe);margins remain high at Budimex, and are recovering at Ferrovial Construction. In this quarter Ferrovial reports only the full income statement. Group revenues rose by +8% to €4,267m in the first half, ahead of MCIe (+5%). Construction, which contributes more than 80% of this line, slightly accelerated its growth to +3% (+7% in Q2), a figure still affected by the fall in Budimex in Q1 (-15%), which Ferrovial explains by the completion of several projects, not offset by the initiation of others. The backlog in 1H24 was +4% higher than in 1H23 to close to €16,000m.
Construction EBITDA almost tripled in 1H24 to €184m, compared to €138m IMVe, (+58% to €68m) was in line with IMVe (€138m), with favourable performances by units:
1) Ferrovial Construction, which confirmed its positive margins in H1 (3.1%), and especially 4.0% in Q2, vs. a figure close to 1% expected by IMVe, showing a strong recovery from -2.8% at June 23. EBITDA as at June was +53 M€ vs. -52 M€ last year; while.
2) Budimex accelerated its margins, including 9.2% as of June, compared to 7.8% a year ago. Construction EBIT margin targets in 2024 now seem within reach, as the June figure of 3.2% is not too far from the Group’s target of 3.5% for 2024e as a whole, up from 1.0% a year ago.
FER’s consolidated EBITDA +50% v. +40% IMVe. Autopistas EBITDA increased by +19% vs. +23% IMVe, due to maturing traffic in the US. Ferrovial increased its consolidated EBITDA by +50% to €603m (€560m IMVe). In addition to its contribution to the Group’s revenue growth, the biggest impact of Toll Roads is always at EBITDA level (+19% to €428m in H1 24), slightly below our estimate of €444m.
The figures show a slightly higher than expected easing of growth in the US, which can be explained by the maturing process of the projects, together with the deconsolidation of the Azores concession in Portugal. Points that we consider important include:
1) I-66, consolidated since 2H23, contributed €81m versus €73m IMVe.
2) Another relevant point was on the 35W, where the effect of the entry into service of the I-66 section in June last year had a significant impact on the I-66.
3) in June last year had an effect on EBITDA in line with expectations (€117m vs. €119m IMVe). The rest of the assets in the US were slightly below IMVe, resulting in a moderation of EBITDA growth compared to 2023.
Net profit more than tripled, affected by favourable adjustments. Ferrovial reported on this occasion the full income statement, where the main novelty was the capital gain of +€166 million from the sale of 5% of the Indian concessionaire IRB, which we had not included. After better than expected financial results, including dividends from investees, FER’s net profit to June, €414m, far exceeded IMVe (€151m).
