ACS obtains a net profit of 576 million euros through September
The ACS Group’s net attributable profit in the first nine months of 2023 amounted to 576 million euros, 19.9% more than the previous year, due to the good operating and financial performance of Construction, highlighting Hochtief’s growing activity in North America, and Concessions, where Abertis’ contribution amounted to 153 million euros. Earnings per share (EPS) grew by 24.1% to 2.22 euros.
All activities had a good operating performance, growing by 19.7% to 505 million euros, supported by the result of Construction and the higher contribution of Abertis. Specifically:
The net profit of the Construction area grew by 21.5% to EUR 309 million.
The Concessions’ activity increased its results to 173 million euros, with Abertis contributing 153 million euros and Iridium 20 million euros.
The Services area developed by Clece posted a net profit of 22 million euros, up 4.6% on the previous year.
Operating results
The operating results of the activities have shown a good performance in all business segments. The Group’s gross operating profit (EBITDA) reached 1,425 million euros, 12.8% more than the previous year.
EBIT amounted to 972 million euros, 15.8% more than the previous year.
International diversification of the ACS Group
ACS Group sales in the first nine months of the year reached 26,395 million euros, up 7.6% on the previous year, with all activities showing a solid performance; adjusted for exchange rates, sales grew by 11.4%.
The geographic distribution of the Group’s sales is as follows:
Backlog at September 2023 stood at EUR 74,909 million, growing by 8.6% from December 2022 (+9.4% adjusted for exchange rate) thanks to the volume of awards recorded in the first nine months of the year reaching EUR 34,747 million.
Construction
Construction sales amounted to 24,638 million euros, up 7.4% year-on-year, thanks to the good performance of activities at both Dragados and Hochtief.
Activity in North America showed a solid recovery, with sales reaching 16,103 million euros, 7.0% more than the previous year (10.1% adjusted for exchange rates) and representing 66% of sales.
Meanwhile, sales in Asia Pacific amounted to 5,892 million euros, a growth of 11.3% despite the negative impact of the depreciation of the Australian dollar. Europe showed a stable evolution with a growth of 3.1% to reach 2,407 million euros.
International sales amounted to 23,567 million euros, a figure which represents 96% of the total turnover of the Construction activity, with North America and Australia being the most important markets. Sales in Spain represent 4% of the total.
The construction backlog at September 2023 amounted to EUR 72,313 million, 94% international, up 6.7% year-on-year and 9.4% higher than in December 2022.
Operating results showed a good performance in the period, with net operating profit (EBIT) in Construction growing by 7.8% to € 685 million.
The Construction activity obtained a net profit of 309 million euros, 21.5% more than the previous year, thanks to the good operating performance of the different areas, especially North America, which offset the lower contribution of Asia Pacific affected by the exchange rate impact, and to the reduction of minority interests in Hochtief.
ACS Group Concessions
Concessions had a net profit of 173 million euros, compared to 145 million euros the previous year, with Abertis contributing 153 million euros in the period.
Last July, as part of the strategic collaboration agreement for Abertis signed between the ACS Group and Mundys with the main objective of strengthening its global leadership in transport infrastructure concessions, the ACS Group agreed to transfer a 57% stake in the SH288 highway in Houston to Abertis for 1,532 million dollars.
SH-288 is one of the longest concessions in North America, expiring in 45 years, and has a very attractive growth potential due to its location in an area of rapid economic expansion, with a higher than expected number of new commercial developments.
Abertis
The traffic growth trend is consolidating, exceeding pre-pandemic levels in practically all the countries in which Abertis is present, with an annual increase in ADT of 3.2%. This recovery in average daily traffic, as well as the contribution of the new concessions acquired, raised sales to 4,199 million euros (+10.5%) and EBITDA to 2,940 million euros (+12.4%), offsetting the exit from the perimeter of concessions in Chile. Abertis’ net profit before amortisation of the PPA (Price Purchase Allocation) amounted to 618 million euros, up 22%. Abertis increased its contribution to ACS’s net profit by 35% with 153 million euros, 40 million euros more than the previous year.
153 million, 40 million more than in the previous period.
Iridium
Iridium, the Group’s concession development company, obtained a net profit of 20 million euros. Iridium currently has a portfolio of 48 assets, including motorway concessions, railways and other social facilities, with an invested capital of 2,000 million euros by ACS, including 100% of SH 288, the partial sale of which to Abertis is expected to close in December 2023.
Services (CLECE)
The Citizen Services area posted sales of 1,434 million euros, up 5.6% year-on-year, maintaining operating margins compared to the comparable period, now normalised after the impact of the pandemic.
Net profit amounted to EUR 22 million, up 4.6% year-on-year. The current backlog of services amounted to EUR 2,596 million, equivalent to 16 months of activity. Recent contracts awarded in the quarter include the cleaning service for barracks, bases and hospitals of the Spanish Ministry of Defence and the extension of the surveillance and security service for the Health Departments of the Generalitat Valenciana.
Financial Situation of the ACS Group
Net Debt amounted to 590 million euros at 30 September 2023, increasing by 302 million euros in the last twelve months, mainly due to the increase in the stake in Hochtief, of 6%, for 331 million euros.
