Sacyr increased its EBITDA by 16% in the first half of 2021, to total 402 million euros, thanks to its good business development and the company’s strong focus on concessions.
Indeed, concession assets, with limited demand risk, accounted for 82% of this EBITDA, five percentage points higher than in the same half year of 2020.
Group operating cash flow grew by 29% to 282 million euros. This growth was achieved in a challenging environment due to the Covid-19 crisis. Turnover grew by 4% to 2,164 million euros between January and June, and profitability (margin on EBITDA) climbed to 18.6%, significantly higher than the same value in the first half of 2020 (16.7%).
Net profit reached 40 million euros, compared to 70 million in the first half of 2020, as extraordinary results were recorded due to the sale of the Guadalmedina highway in the previous year. Discounting this effect, profit grew by 233% (from 12 million to 40 million).
The future revenue backlog ended the first half of the year at 45,091 million euros, 15% higher than at the end of 2020, due to the incorporation of new construction and concession projects. Of this backlog, 80% is concession assets, which contain latent EBITDA of over 22,500 million euros to come to fruition in the future.
Sacyr won significant contracts in its strategic markets between January and June. That was the case for the A3 and A21 highways in Italy; the RSC-287 highway in Rio Grande do Sul (Brazil); the first two construction projects in Canada; and the four new road contracts in Florida and Texas (USA).
Reduction in net recourse debt
Sacyr has set recourse debt reduction as a strategic line within its Strategic Plan 2021-2025. During the second quarter of the year, the company reduced its net recourse debt by 108 million euros to 883 million at the end of June. The generation of operating cash for activities with recourse prior to investment was 63 million euros, a very significant milestone for this objective in the half year.
The company continues to work on various operations to reduce debt further during the year. Sacyr used two innovative financing instruments linked to sustainability targets in the first half of the year.
The first was green financing of up to 160 million euros (120 million already drawn and 40 million as previously awarded projects come into operation) in Valoriza Servicios Medioambientales services subsidiary. This financing is directly linked to achievement of sustainable agenda-related targets and the fulfilment of green KPIs.
The second novel instrument is the first social bond issued in Latin America linked to an infrastructure project. The bond issue, for US$209 million, refinanced the Montes de María road (Colombia).
The group’s net debt, mainly associated with projects, stood at 5,679 million at the end of June.
Stake in Repsol
Part of the derivatives Sacyr has contracted to cover its 8% stake in Repsol are set to expire in the second half of 2021. The company will not renew these derivatives, corresponding to 75.4 million shares. This operation will not affect Repsol’s share price as it is not a market transaction.
Its stake in the energy company will go from 8% to 3% at the end of the year in this way. This operation will enable Sacyr to simplify the group’s balance sheet and concentrate its resources on its strategic plan and its focus on concessions.
Attractive shareholder compensation
Shareholder compensation is one of the main points of the Strategic Plan to 2025. Sacyr has made two scrip dividend payments worth 0.096 euros per share this year, representing a dividend yield of 4.6%, meeting the objective and commitment acquired with the market.