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FCC Posts Rise in Profits During Q2
FCC’s environmental division reported €194.6 million in the first half ($223.0 million), a 7.3 percent decline year-on-year.
3 Min Read
FCC Group's attributable net profit increased by 64 percent in the second quarter of 2017 with respect to the first quarter of the year.
In the first half of the 2017, net profit amounted to €56.5 million ($66.8 million), a 3.1 percent increase year-on-year despite. This figure was obtained by incorporating income tax, income from discontinued operations and minority interests into income before taxes from continuing operations.
FCC Group revenues declined by 3.4 percent in the first half to €2,789.6 million ($3.3 billion). This was due to the deconsolidation of Giant (Cement business in the US) from November 2016 and to the euro's strength against most of the currencies in which the Group operates. Adjusting for both effects, FCC Group revenues have increased by 2.1 percent year-on-year in the first half of 2017.
In terms of its solid waste business lines, FCC was awarded a $32.5 million contract to collect and treat waste from the city of Rowlett, Texas, for a period of seven years, with the possibility of a three year extension. The contract includes managing the city's residential and commercial waste and will provide about 5,000 tons of waste per year for the group's recycling plant in Dallas, which was inaugurated this year. Including the contracts obtained in the cities of Garland and Mesquite in the first quarter, FCC’s Environment division added over $300 million to its backlog in the US in the first half of 2017.
In the first half of the year, the division also started up its ninth energy-from-waste plant, to serve Worcestershire and Herefordshire, in the United Kingdom. The complex was designed, developed and built by Mercia Waste Management, a company 50 percent owned by FCC. The plant will be able to process up to 200,000 tons of waste per year and has 15 MW installed capacity to generate electricity, which will be fed to the grid.
The Environment division now has nine plants for reusing and obtaining energy from municipal solid waste, making it a world leader in the end-to-end treatment of municipal waste.
Other highlights from the company’s financial results:
FCC Group EBITDA increased by 0.4 percent year-on-year, to €376 million ($444.3 million). Excluding the aforementioned deconsolidation and the adverse currency effect, EBITDA would have increased by 4.8 percent. This EBITDA performance reflects a policy of focusing on the most profitable operations, reducing structural costs (down 23 percent year-on-year), achieving synergies across the group, and enhancing productivity.
FCC’s environmental division reported €194.6 million in the first half ($223.0 million), a 7.3 percent decline year-on-year, mainly because of the depreciation of sterling.
EBIT amounted to €187 million ($221.0 million) in the first half of 2016, a 54 percent increase with respect to the €121.4 million ($143.5 million) reported in the same period of 2016.
After a recent debt restructuring, parent company gross debt has been cut by €1,624 million ($1.92 billion) in the last twelve months, from €3,671 million ($4.3 billion) at the end of June 2016 to €2,046 million ($2.42 billion) at the end of June 2017, a 44 percent decrease. At the same time, the debt maturity has been extended and interest rates have been cut.
Net income attributable to the majority shareholders was €56.5 million ($66.77 million), 3.1 percent more than in the first half of 2016. Net income in 2016 included haircuts on the Group's and Realia's debt, the special dividend in the energy business, and the sale of the Malaga Metro stake.
The Group booked positive underlying net income in the recent months, accumulating practically 15 consecutive months of profit and consolidating the cycle change at FCC.
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