Irish Independent: M3 motorway partners see 12pc drop in share price

Nicolas Villen Jimenez, chief financial officer of Grupo Ferrovial SA, poses at his office in Madrid on May 28, 2007. Photographer: Daniel Sanchez/Bloomberg News

M3 motorway partners see 12pc drop in share price

Irish Independent - Tuesday September 02 2008

THE Spanish construction giant Ferrovial Group , a partner in the construction of the controversial M3 motorway, saw its shares fall 12pc yesterday , after it reported a 25pc drop in earnings for the first half of 2008. While the group's cash flow remained healthy at more than €1bn over the period, it said earnings before interest and tax fell 25pc to €691m.

Ferrovial reported that Ireland was among the best performing areas for the group internationally. While traffic volumes on its toll roads grew by 8pc, revenues from this source were up a significant 13.5pc over the period, although the company declines to give an exact figure for those revenues. Despite the economic slowdown affecting some countries, the toll road business, including holding companies, expanded revenue by 7.3pc to €444.6m in the first half of 2008. "The results were affected by exchange rates and an up-tick in costs, together with a slowdown in traffic on some routes," said Luis Padron, an analyst at Fortis Bank . "Still, that was compensated by higher tolls and there were no great surprises overall."

Ferrovial ended the period heavily in debt -- net financial debt with recourse to the parent company was €2.201bn at the end of the half year. Tara Watch, the group which has opposed the building of the M3 close to the national monument at Tara, said the debt burdens under which construction firms such as Ferrovial are operating, as well as declining toll revenues worldwide, posed a serious problem for the Government.

Downturn

Vincent Salafia of Tara Watch said: "The global financial downturn has hit construction companies hard , and the increase in gasoline prices has also reduced toll revenues worldwide. These two factors are combining to create an ominous environment for the M3 contract, the National Roads Programme under the National Development Plan , and Transport 21 . We are calling on the Minister for Transport, Noel Dempsey, to investigate the matter, and to reveal the consequences of contractor liquidation, under the Public Private Partnership agreement."

Related articles:

- Bloomberg: Ferrovial Declines After Posting Quarterly Loss on Heathrow

- Wall Street Journal: Debt Costs Help Slash Net at Spain's Ferrovial

- Financial Times: Ferrovial profits dive as strong euro and rising costs add to woes

- Peninsula Star On-line: Ferrovial announces profit collapse

Email Ferrovial Shareholder Relations: accionistas@ferrovial.es

Downgrade for builders as concern over debts grows



Irish Independent - Wednesday July 23 2008

Hochtief , Germany's largest construction company, and other European builders were downgraded by Merrill Lynch on concern debt-financed acquisitions will add extra strain to their finances as economies deteriorate.

Merrill cut its recommendation on Hochtief, Bilfinger Berger and Ferrovial of Spain to "neutral" from "buy", according to analyst Luis Prieto. Merrill lowered Eiffage and Fomento de Construcciones y Contratas to "underperform'' from "neutral" and kept "buy" ratings on ACS and Vinci.

"The fact that contractors have not been stress-tested by previous economic downturns in their current configuration makes us adopt a very conservative approach," Mr Prieto said in a note.

"Negative sentiment" surrounds European builders' shares," added Mr Prieto. Attempts to diversify have exposed European contractors to additional risk. (© Bloomberg )

Motorists can be a driving force

Letter to the Editor - Irish Independent - Tuesday September 02 2008

I CANNOT for the life of me understand why Irish motorists take so much crap from the National Roads Authority and the Government. Here we are again with another stealth tax that the already hard-done by Irish motorists have to pay. What is wrong with you motorists? Do you not realise that you have an ace in your hands that, if used properly, could see the M50 tolls removed permanently?

A few years ago I was in Alicante, Spain. A new motorway had just been opened up and toll booths had been placed on the motorway. The Spanish motorists did not use the motorway; they did not want to pay the tolls and the government for the region had to remove the tolls and the motorway is now free to use. Can the Irish motorists not do the same? We know that Irish motorists using the M50 have paid for it many times over and now are being ripped off again with an increase in the toll charges.

Irish motorists, lend me your ears. Awaken in yourselves the passion and drive of our forefathers and unite as one to boycott the M50 motorway. Bring this rip-off to a close once and for all. I feel very strongly about this.

TONY LEGGETT
CO LIMERICK

write to independent.letters@unison.independent.ie