Ferrovial will distribute 1.7 billion in dividends and receive 2.2 billion from its infrastructure
Ferrovial estimates it will generate €2.2 billion from its infrastructure assets worldwide between 2024 and 2026. growing maturity of their projects. This positive development, among other things, will allow the group to distribute dividends to its shareholders amounting to approximately 1.7 billion euros over the next three years. However, the market took this statement negatively, and its shares immediately turned red. They fell more than 4% to close with a loss of 3.16% at €34.29 per share.
Ferrovial presented these 2024-2026 forecasts, which will inform its new strategic plan, at Nasdaq’s Capital Markets Day in New York, where global investment funds and analysts will detail their activities. .group and thus try to attract new investors, especially North Americans, in view of its next leap to Wall Street. The company that consolidates 80% of the value of its global assets in North Americaplans to begin trading on the New York Stock Exchange before April 1.
In his presentation, Ferrovial CEO Ignacio Madridejos said the company expects to receive this year saw the first dividends from I-66 in Virginia and I-77 in North Carolina.. These will be in addition to those the company already receives from its managed lanes (dynamic tolls) in Texas, where NTE 35W paid its first reward to shareholders last year. NTE and LBJ have done this before. Likewise, the company expects to receive its first dividend from NTO, the concessionaire of the new Terminal One at New York’s JFK Airport, before 2027.
Dividends from these assets and the planned expansion of its flagship project in the world, Highway 407 ETR in Toronto (Canada), as well as its airports, will allow Ferrovial increase revenue from its concessions to 2,200 million between 2024 and 2026.. To this it will add, in a more modest amount, dividends from its construction, energy and mobility businesses.
This 2.2 billion implies a strong acceleration over previous years. In its Horizon 2020-2024 plan, the company aimed to generate €4 billion from its overall business. However, the Covid-19 pandemic that emerged in the early months of 2020 led to the suspension or reduction of all infrastructure assets. Thus, from January 2020 to September 2023 (three years and nine months), this figure reached 1.779 million people. At the end of the last financial year, taking into account the announcements of 407 ETRs, among other things, it would have exceeded 2000 million.. As Madridejos emphasized, over the past 10 years this figure has grown to 4.8 billion.
Ferrovial excludes London Heathrow Airport, in which it has a 25% stake but which it has agreed to sell to France’s Ardian fund and Saudi Arabia’s sovereign wealth fund PIF, for more than 2.7 billion euros. New investors are expected to join Ardian and PIF in buying the 35% of Heathrow’s other shareholders, who have decided to follow Ferrovial’s lead in selling. In any case, the group led by Rafael del Pino and Ignacio Madridejos hopes that the deal will be completed and, as detailed in a presentation to investors this Thursday, sales proceeds “They will be used for investment and distribution to shareholders.”
Before the pandemic, Heathrow was Ferrovial’s second-largest dividend source. for 407 ETR, But the airport concessionaire has suspended remuneration to its shareholders since the first quarter of 2020 and has not yet established when it will resume them.
Increased resources from infrastructure will support Ferrovial’s commitment to tightening its dividend policy, which includes share repurchases. Madridejos emphasized that The group has delivered returns to its shareholders of 12% annually over the past 10 years. and emphasized the investment grade assigned to the company by rating agencies. The firm announced it would commit €1.7 billion over the next three years. The company has distributed $5 billion over the past decade.
“We want to grow in the United States,” Rafael del Pino, Ferrovial’s president, said at the group’s Capital Markets Day presentation in New York.
Ferrovial ended 2023 with a capitalization of approximately 27 billion euros. a level that fell to 25.4 billion yesterday. After the publication of the presentation for analysts and investors, its price began to fall and after 16:00 it lost more than 4%. The decline, which slowed towards the close of the session, was yet to lose 3.16%.
These are the two fundamental goals unveiled this Thursday that will be included in the new strategic plan for the period 2024-2026 developed by Ferrovial. plans to present in the coming weeksexpected to coincide with the release of fiscal 2023 results.
In addition to dividends from its infrastructure, Madridejos indicated that the group additional opportunities to increase your cash generation. Thus, he mentioned future dividends from new projects, improvements in construction activities and asset rotation, as in the case of Heathrow Airport, or minority stakes in many roads and parking lots in Spain, Canada and Ireland.
Del Pino, in his initial presentation to investors and analysts, emphasized that Ferrovial “has been operating in North America for almost 25 years” and emphasized that it is one of the “leading infrastructure and construction groups in the United States.” “We want to grow in the United States,” he stressed. In June, the company moved its headquarters to the Netherlands to begin trading on Euronext Amsterdam as a preliminary step to entering Wall Street. With this latest milestone, the Spanish-origin multinational aims to attract major North American infrastructure and pension funds that currently do not have Ferrovial on their radar. At the same time, he hopes to gain greater visibility in front of its development in the USA, first of all, and in reducing the costs of its financing.
The Highways division (Cintra) has an 81% weight in the company’s value, well ahead of airports with 10%, construction with 7% and energy with 2%.
Madridejos emphasized Ferrovial’s commitment to the highways business, which accounts for 81% of the company’s value, well ahead of airports with 10%, construction with 7% and energy with 2%. The CEO also emphasized that the average lifespan of its infrastructure project portfolio is 55 years, and downplayed high traffic growth expectations on its highways in the US and Canada. Moreover, he emphasized North America Growth Potential in terms of infrastructure due to latent investment needs, urban demographic growth and expected increase in airport traffic (+157% in 2040 compared to 2019).
The investment chapter will prioritize US highways. Number two Ferrovial has listed some of the major highway projects it is considering and plans to bid for in the coming years. The most advanced is the Georgian SR-400, whose proposals are expected in May. It similarly targets other initiatives in Georgia (I-285 East and I-285 West), Tennessee (Choise Lanes, I-24 and I-65), North Carolina (I-77 South) and Virginia (I- 495 Southside). ). In the road transport business, the company also highlighted growth opportunities in India, where it holds a minority stake in IRB.
In addition, the manager highly appreciated the opportunities that his participation in the development of the terminal opens up. ONE from New York’s John F. Kennedy Airport expand its presence in this business to other airports in the USA and Europe, mainly bilateral negotiations -That’s what he did to Carlisle at JFK-.
In addition, Madridejos announced the company’s interest in developing business in the field of energy transition. The company has just restructure the energy division to accelerate its development.
In the construction sector, Ferrovial confirmed its targets already set in the Horizon 24 Plan, according to which work for the group companies (Sintra, Airports and Energy) constitutes 25% of the portfolio and the profitability margin (operating result) of this area is 3.5. %, a percentage the company hopes to achieve in 2024 when problems on several roads in the United States are resolved.
In addition to Del Pino and Madridejos, the event was attended by the heads of the main enterprises Andres Sacristan from Sintra (toll roads), Luc Bugeja (airports) and Ignacio Gaston (construction), as well as the director of finance Ernesto López Mozo.