Rising costs cut Ferrovial’s construction division’s profits in half
By Neil Gerrard01 March 2023
Rising costs have eaten into profits at Spanish infrastructure firm Ferrovial’s construction division.
The business saw its earnings before interest (EBIT) fall from €132 million in 2021 to €63 million in 2022.
Ferrovial blamed the impact of inflation on the prices of supplies and subcontracts. But it said price review formulas and a positive performance at its Polish construction business Budimex had partially offset the reduction.
Meanwhile its construction revenue increased by 2.2% in like-for-like terms to €6.5 billion, up from €6.1 billion the year before.
Ferrovial’s order book also stood at an all-time high, reaching €14.7 billion, up 18.7% on the year before. Civils work remained the largest segment of new orders (69%).
The business also holds €915 million of pre-awarded contracts not included in the figure.
During the year, Ferrovial won its largest project to date, a deal to design, build and finance a section of the Toronto subway in Canada.
The seven-year project, in joint venture with Vinci, is worth €4.4 billion.
The Ferrovial business as a whole increased like-for-like revenue by 4.2% in 2022 to €7.5 billion.
While its construction arm generated the bulk of that revenue, its toll roads business contributed €780m, airports €54m, and energy, infrastructure and mobility another €296 million.
In mid-2022, Ferrovial Airports bought a stake in JFK Airport New Terminal One in New York, USA. New Terminal One is the consortium appointed to design, build and operate the new terminal at the airport. The project will involve replacing terminals 1 and 2 and the former Terminal 3 of the airport. The project is due for completion by 2030, with a lease to operate it until 2060.
It also sold UK infrastructure services and engineering company Amey for €301 million, completing the divestment of the Ferrovial Services division.