Spain’s Sacyr sees highways fueling double-digit core profit growth
MADRID, Nov 11 (Reuters) – Spanish construction company Sacyr (SCYR.MC) is confident its base revenue will grow by double digits in each of the next few years as it focuses on road projects where the terms of its concessions are inflation-linked, its chief financial officer said on Friday.
Sacyr posted a 47% rise in nine-month earnings before interest, tax, depreciation and amortization (EBITDA) to €924 million ($952 million), mainly benefiting from its post-commissioning concessions business of eight major transport projects this year.
“The group’s EBITDA growth will continue at very high rates over the next few years…always in the double digits,” chief financial officer Carlos Mijangos told Reuters at the company’s headquarters in Madrid.
Recently completed highways in several Latin American countries and Italy, along with three other transport projects to be ready by 2023, should provide the world’s fourth-largest transport concession group with stable cash flow for the next 25 years. .
Most of Sacyr’s concession contracts are linked to inflation and have a mechanism making them less dependent on traffic volumes.
DISPOSALS FOR 2023
The company, which also posted a 13% rise in nine-month net profit to 68 million euros, plans to launch the sale of 49% of its cleaning and recycling services business and seek a partner for its water subsidiary before the end of 2023. It plans to announce financial advisers for the disposal agreements early next week.
The assets have attracted interest from infrastructure funds, industrial companies and private companies, the executive said, with offers expected by next summer.
The divestiture plan would provide additional funds to accelerate the growth of its concession infrastructure business primarily in continental Europe, Britain, Australia and Canada.
It also hopes to reduce its net debt over the next two years, thereby minimizing its financial risks.
The CFO has ruled out a full exit from the water business as he seeks to capitalize on opportunities for new water supply units in Central Europe, the United States and Australia amid increasing drought.
($1 = 0.9707 euros)
Reporting by Corina Pons, editing by Andrei Khalip, Kirsten Donovan
Our standards: The Thomson Reuters Trust Principles.