Financial Data and Key Metrics Changes - The company reported a net debt position of negative €223 million, excluding infrastructure project companies, which does not include proceeds from the divestment of Hydro [5] - Adjusted EBITDA for the construction segment was €191 million, up 4.2% year-over-year, with an adjusted EBIT margin of 3.5%, in line with long-term targets [18][19] - Operating cash flow was negative €104 million in the first half, compared to negative €53 million in the same period last year, primarily due to a lack of advanced payments [19][24] Business Line Data and Key Metrics Changes - Highways revenues grew by 14.9% in the first half on a like-for-like basis, with adjusted EBITDA improving by 17.1%, driven by strong performance from U.S. assets [7][8] - U.S. Highways represented 88% of total highways revenues and 97% of total adjusted EBITDA, with revenue growth of 15.9% and adjusted EBITDA growth of 14% [8] - The construction segment saw revenues reach €3,453 million, a 2.6% increase year-over-year on a like-for-like basis [18] Market Data and Key Metrics Changes - Traffic improved by 5.8% in the second quarter, driven by targeted rush hour promotions, although adverse weather and construction delays impacted performance [10] - At JFK Airport, the new Terminal 1 project is 72% complete, with construction on schedule and on budget [15] - Dalaman Airport in Turkey experienced a slight traffic decline of 0.3% in the first half, influenced by lower domestic passenger volumes [17] Company Strategy and Development Direction - The company continues to focus on growth investments, divestments, and shareholder distributions, with a healthy pipeline of U.S. highways assets [30] - The strategic horizon plan is being executed, with updates on progress expected [30] - The company is optimistic about future opportunities in Poland, particularly with European funds and potential reconstruction efforts in Ukraine [97] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth prospects of North American assets, driven by increased customer segmentation and local economic growth [30] - The company anticipates limited exposure to inflation and a healthy construction order book [30] - Management noted that the competitive environment for U.S. Managed Lanes remains similar to previous years, with expectations for continued success in upcoming bids [70] Other Important Information - The company completed the acquisition of a 5.06% stake in four zero seven ETR for CAD 1.99 billion, increasing its stake from 43.23% to 48.29% [6] - Dividends from North American highways totaled €240 million in the first half, compared to €339 million in the same period last year [9] - The company issued $1.4 billion in long-term green bonds, completing the refinancing of phase A for the NTO project [16] Q&A Session Summary Question: Insights on revenue growth in I-77 and I-66 - Management attributed revenue growth to economic activity and population growth in metropolitan areas, along with the ability to adjust toll rates based on customer value [37][40] Question: Earnings from ProBio Construction - Management noted that the decline in Q2 earnings was due to additional costs related to utilizations and IT systems, with a long-term EBIT margin target of 3.5% [44] Question: Upstream dividends and shareholder returns - Management indicated that dividends from infrastructure projects are tied to asset performance, with a target of €2.2 billion in dividends for the period 2024-2026 [54] Question: Schedule 22 provision and traffic trends - Management explained that the reduction in the Schedule 22 provision was based on updated traffic data and successful promotions attracting more users during peak times [68][80] Question: ETR dividend factors and capital structure - Management confirmed that there is potential for increased dividends from ETR, with room for adjustments in capital structure for I-66 and I-407 [110]
Ferrovial SE(FER) - 2025 Q2 - Earnings Call Transcript