Renta 4 | Ferrovial (FER) obtained a net profit of 268 million euros last year, which managed to settle in “black numbers” and thus reverse the losses with which it had closed 2018 and had been justifying over the first three quarters of 2019, thanks to the capital gains from the sale of the Ausol highway in Malaga.
Revenues increases in line with our expectations of +5.5% (+2.6% comparable), thanks to the recovery in the construction disvision which remains stable vs. 2018, and the increase in motorway traffic. EBITDA, which improves our estimates, is affected by the amount in Q1 of the 345 million euros provisionally recorded in the construction division for possible future losses on various projects in the United States. The capital gains generated by the sale of Ausol (475 million euros) and other assets offset the effect of the provision in construction and the sale of Broadspectrum, as well as other recorded impairments, generating a net profit of 268 million euros, above our expectations, as a result of higher profits for investors due to the improved performance of derivatives at Heathrow.
The net cash position rose sharply, +32%, improving our expectations due to a better performance of project dividends compared to estimates.
The company expects that in 2020 dividends from projects will continue to grow, both organically and through the first dividend payment from the LBJ, which is also expected to be refinanced during the year. In construction, they expect the EBIT margin to exceed 1% (in line with our expectations of 1.6%) and they expect to reach 3.5% in 2024. They remain committed to divestment in services and expect to reach country-by-country agreements.
The good performance of dividends from investors that significantly improve the net cash position, as well as a reasonable 2020 governance, could be positively reflected in the share price. We continue to believe that the sale of the services division should act as a catalyst, depending on the price at which this sale is finally closed. We reiterate. P. O. 30.90 euros,
