FCC plans said to bear fruit
By Sandy Guthrie02 March 2015
Spanish contractor FCC has reported an annual increase of 12.1% in its EBITDA (earnings before interest, taxes, depreciation and amortization), claiming that its Strategic Plan launched during the second quarter of 2013, was beginning to bear fruit.
The group’s EBITDA in 2014 totalled €804 million. It said that among the contributions to the growth in EBITDA was cement subsidiary Cementos Portland Valderrivas. A €104 million end-of-year result was double that of 2013.
FCC said the figures were also helped by a recovery of the market in Spain that became visible in the third quarter of last year and was seen to continue during the early months of 2015.
It said the improvement in financial debt was one of the highlights of the 2014 results. At the end of the year, after the capital increase carried out in December, the group’s debt stood at €5.02 billion – a decrease of 15.9% compared to the amount on the books at the end of 2013.
Turnover reached €6.33 billion, a drop of 6.2% over the previous year which was said to be largely attributable to the contraction that is still occurring in demand for construction in Spain, and to the more selective approach to growth exercised by FCC Construction in overseas markets.
It said that revenue from FCC Construction shrank by 20.1% year-on-year, as a result of the continuing downturn in recent years of public investment in infrastructure in Spain.
This was highlighted by the fact that the Spanish market accounted for 80% of the drop, with only 20% from projects in other countries around the world. On the international front, more selective objectives have been set, said FCC, “focusing on optimising profitability and the generation of cash rather than simply expanding business”.
It said a strong 90.3% growth in construction revenue was seen in the Middle East and North Africa thanks to work starting on the Riyadh Metro. In contrast, revenues in Latin America decreased by 27.1%, mainly because of the completion of other projects, such as the Metro Line 1 and road realignment in Panama City. The construction of the Lima Metro in Peru is scheduled to start in the second quarter of 2015.
In November 2014, the company concluded negotiations between the controlling shareholder (B1998) and Control Empresarial de Capitales SA de CV (CEC), controlled by the Slim family. Subsequently, CEC bought a total of 66,794,810 newly-issued shares in FCC, representing 25.6% of FCC stock after the capital increase.
Following that operation and B1998’s recent reduction in its shareholding, the structure of major shareholders in FCC shows CEC with 25.6%, B1998 with 22.4%, and 5.7% held by BGI (funds linked to Microsoft chief Bill Gates).