Intermoney | ACS (ACS) (Buy, Target Price €46/share) has confirmed in a conference held in New York that the Group will record an accounting loss of €860 million derived from the execution by the State of Texas, which will pay about $1,750 million, while the book enterprise value of the infrastructure was estimated at about €3,000 million, according to the newspaper Expansión.
The Group, however, expects the final year-end impact on its accounts to be much lower, as it will be offset by capital gains from the purchase of Thiess and reversal of derivatives. SH-288 was owned 43% by ACS, through Iridium, and 57% by Abertis.
ACS had already reported at the end of August the de facto expropriation of SH-288 by the state of Texas. The concession contract already contemplated this possibility, so that, given the good progress of the infrastructure, the Group’s negotiating power was practically nil. It is not all bad news for ACS in concessions in the US, as the Group has recently been awarded the SR-400 in the state of Georgia, which will involve an investment of $4,000 million, and from which it expects to generate a return of 15%. The expropriation of SH-288 does not imply a change in our OP, as the valuation of this infrastructure was included within Iridium, for which we have an equity value of €1,300m, assuming a book value ratio of 1.3x.
