Alexa

Ferrovial net profit falls 49 percent on debt service costs

Ferrovial net profit falls 49 percent on debt service costs

MADRID, Spain _ Spain's Grupo Ferrovial SA on Tuesday said its net profit for 2007 dropped 49 percent, hit by higher servicing costs on its euro30 billion (US$44.45 billion) debt.
Spain's second-largest construction company by market value behind Actividades de Construccion y Servicios SA said its net profit fell to euro733.7 million (US$1087.12 million) from euro1.43 billion a year earlier.
The result was below analysts' expectations of euro885.2 million (US$1311.6 million).
Still, Ferrovial's total revenue rose strongly 18 percent to euro14.63 billion (US$21.68 billion) in 2007, boosted by the incorporation of BAA. The company's stock closed up 8.6 percent at euro44.98 (US$66.65).
Ferrovial results mirror the mounting difficulties that some Spanish companies are facing with a drastic change in the economic cycle after expanding aggressively abroad through leveraged acquisitions.
In the summer of 2006, Ferrovial led a group of investors in the takeover of BAA, which is the world's largest airport operator and manages seven U.K. airports, including London's Heathrow and Gatwick airports. Since then, the company's shares have lost close to 28 percent, hit by difficulties to refinance debt used to buy BAA. Its planned asset-backed bond offering of about 10 billion pounds (US$20 billion; euro13.29 billion) has been delayed several times due to challenging market conditions.
Ferrovial said financing costs rose to euro1.90 billion (US$2.82 billion) from euro1.23 billion a year earlier. Its total debt stood at euro30.26 billion (US$44.84 billion)at the end of 2007.
BAA also generated euro216.8 million (US$321.23 million) in losses during 2007. The company expects BAA to generate euro300 million (US$444.51 million) in losses this year, on top of a potential negative accounting impact of euro1.2 billion (US$1.78 billion) from tax changes in the U.K.
Ferrovial has divested assets to lower financing costs linked to BAA's purchase. It last year sold its 20.9 percent stake in Sydney's airport to a group led by Macquarie Airports, resulting in a capital gain of about euro474.8 million (US$703.51 million).
Extraordinary gains were offset by other non-recurring items reported a year earlier, such as the sale of real-estate unit Ferrovial Inmobiliaria to Barcelona-based Promociones Habitat. The euro1.6 billion transaction took place in late 2006, just ahead of a slowdown in Spain's housing market, and generated some 770 million in capital gains.
Excluding one-off items, Ferrovial said 2007 profit would have risen more than 12 percent to euro362.4 million (US$536.97 million).


Updated : 2021-04-17 08:07 GMT+08:00