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The great builders leave the crisis thanks to its internationalization

The six quoted won 70% more, were revalued in stock and reduced their debt

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The great builders leave the crisis thanks to its internationalization

The great Spanish construction companies quoted lived in 2017 definitive year of its recovery after crisis, which sank its turnover and its profits due to fall of contracts in Spain. This obligation to go abroad has not only been a temporary solution to crisis but has become lung of its accounts and future of its profitability.

ACS, Acciona, FCC, OHL, Ferrovial and Sacyr recorded a joint net profit of 1.712 billion euros in 2017, 70% more than in previous year and increased ir turnover by 11.6%, up to 54.36 billion. This is best year that se companies live since financial crisis exploded, housing bubble punctured and public work collapsed. In fact, benefit of big Six was reduced by 50% in 2016.

Although greatest benefits were harvested by ACS (802 million euros), greatest improvement was experienced by FCC, which has finally closed with benefits (118 million) after five years in red numbers. The company mainly owned by Carlos Slim comes out of losses thanks to restructuring process, reduction of expenses and sale of subsidiary of Water manager.

OHL was only major builder that follows in red numbers (-12.1 million euros), although it managed to reduce m by more than 97% compared to 2016. Ferrovial won 454 million euros, which amounts to 20.7% more compared to 2016. Acciona, for its part, recorded a profit of 220 million euros, 37.5% less than previous year. And Sacyr scored a profit of 130.6 million in whole of 2017, a result above 120.2 million that it achieved in 2016.

It was not bad for builders in equity markets eir. With exception of Acciona which was left 2.1% of its value, all of m experienced a strong revaluation in bag in whole of 2017, from 6.2% that went up Sacyr, to 51% that increased price of OHL. FCC titles rose 14.2% and Ferrovial's 11.3%.

I-66 highway in Virginia from Ferrovial. Debt reduction

The six major builders took advantage of improving ir profitability to reduce ir debt. As of December 31, 2017, total financial liabilities of ACS, Acciona, FCC, OHL, Ferrovial and Sacyr amounted to 18,181,000,000 euros, 16.2% less than a year earlier. The greatest effort corresponded to OHL that lowered its debt to 1 billion, after lowering it by 65.6%, although when formalize sale of its subsidiary of Concessions will eliminate it completely. ACS has practically finished its liabilities over past year, after reducing its debt to a testimonial figure (153 million).

Internationalization is key to improving all ratios. Companies have diversified ir foreign markets, reducing ir presence in Latin America, in favor of new countries with greater legal certainty like United States and Australia embarked on important plans of renovation of infrastructures.

ACS has taken lead in this process thanks to projects through public private participation System (PPP), a formula that shares risks in financing, construction and exploitation of infrastructures, both transport and social ( Hospitals, schools or prisons) and that only in United States and Australia re are projects for 200 billion. In 2017, company headed by Florentino Pérez billed 38% of its sales in United States (13.3 billion), 20% of Australia (7 billion) and only 13% of Spain (4.4 billion).

Ferrovial also owes its full benefit to foreign contribution, such as airports in United Kingdom and motorways in United States and Canada, whose dividends reported 553 million.

That presence abroad will increase in next few years. Only in 2017, six major Spanish builders have won contracts abroad for more than 44 billion euros, of which almost half correspond to ACS.


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