M3 motorway partners see 12pc drop in share price
Ferrovial HQ in Madrid. Photo: PEDRO ARMESTRE/AFP/Getty Images
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 to investigate the matter, and to reveal the consequences of contractor liquidation, under the Public Private Partnership agreement."
- Pat Boyle
