Renta 4 | Awaiting to find out the date on which Sacyr (SCYR) will present its 2024 figures and hold its conference. Overweight, P.O. €4.29.
Results that we hope will continue to be in line with the group’s strategy. Single-digit declines expected in concession revenues, as, despite the fact that concessions are still on the rise, construction revenues are falling due to the completion of major projects in 2023. In the Engineering and Infrastructure area, we expect the good trend set in Q3 to continue in Q4, as a result of the weight of the portfolio’s own projects, which are expected to accelerate the level of revenue vs. H1. In addition, the A21 motorway in Italy will make its first quarterly contribution. As for the EBITDA of the concessions, as communicated in the May CMD, it is foreseeable that the situation of its financial assets will begin to normalise and show a slight decline, although operating cash generation should continue to show very high growth (conversion of EBITDA into cash could be around 90% according to our forecast against levels below 60% in 2023), thus allowing for significant investments. In construction, despite the strong quarter in terms of revenue, we expect margins to stabilise at around the 5% we saw in 9M. We believe the water business should continue to improve in terms of both revenue and EBITDA due to the characteristics of the projects in operation, although we expect margins to contract slightly after the good year 2023.
The net debt with recourse is estimated to be significantly reduced by 2023, with the possibility of working capital recovering in the fourth quarter, allowing it to be in line with the target of net debt with recourse/EBITDA with recourse + distributions at the end of the year below 1x, supported in turn by the dividends received from the concessions and the capital increase that took place in May.
Looking ahead to the results conference call, we will be keeping an eye out for any comments they may make on the next moves planned as part of their asset rotation strategy. We will see if there is any news on the processes of divesting the assets in Colombia, and regarding the creation of the Voreantis vehicle which will bring together the majority of its operating concessions and to which they wanted to give entry to a financial partner with a stake of no more than 49% in order to accelerate its growth strategy (although at the CMD they said they did not consider the operation to be launched before the end of 2025, with the closing and the corresponding collection foreseeably in 2026). In addition, we will see what visibility they give in terms of the award of new concession projects and what comments/forecasts they can give regarding the five projects awarded throughout 2024.
We reiterate overweight, and P.O. €4.29.
