Ferrovial profits up 21% but firm faces problems in Britain

Spanish infrastructure company Ferrovial, which owns a 25% stake in Heathrow Airport Holdings, has announced that its pre-tax profit rose 21% in 2017 to €454m.

It said the increase was due to its infrastructure assets and its international subsidiaries Budimex and Broadspectrum.

The firm currently employs almost 100,000 staff and had a total revenue of €12.1bn last year.

Some 77% of Ferrovial’s total revenue was earned on international contracts, however the firm suffered a €54m loss on motorway improvement works in Scotland.

Ferrovial subsidiary Amey also had problems in the UK, and is currently involved in legal battles with Birmingham council over the quality of road repairs, undertaken as part of a 25-year contract. This is presently with the UK Supreme Court.

Ferrovial warned that Brexit is leading public sector clients to tighten their belts, and that this had already affected its business. It added that it needed to win more "investment and maintenance tenders in the medium-term".

Despite this, Heathrow and other UK airports reported significant growth in revenues and earnings for Ferrovial.

The firm say that the US, Australia and Canada are in need of infrastructure upgrades, which may benefit it.

Ferrovial sold off international assets to increase dividends, including selling 3.9% of Polish subsidiary Budimex for €59m, while still being the majority shareholder with 55.1%.

Dividends were also bolstered by the sale of 51% of the Norte Litoral toll road and 49% of the Algarve toll road.

Ferrovial has a backlog of €32bn, 80% of which is located outside Spain and has consolidated net debt of €3.4bn, a 19% reduction from 2016.

Overall the firm’s services division increased by 16.3% over the year.

Image courtesy of Ferrovial

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