Ferrovial SA’s Earnings Call Highlights Robust Growth

Ferrovial SA ((ES:FER)) has held its Q3 earnings call. Read on for the main highlights of the call.

Ferrovial SA’s recent earnings call painted a picture of robust growth and strategic resilience, despite facing some operational challenges. The company reported strong performance in its highway sector and the 407 ETR, contributing to a solid cash position. However, it also acknowledged challenges such as a decline in traffic in certain areas and increased operational costs.

Strong Highway Revenue Growth

Ferrovial’s U.S. highway revenue demonstrated impressive growth, increasing by 16.4% like-for-like in the first nine months of the year. This growth was accompanied by a nearly 15.1% rise in adjusted EBITDA, showcasing the company’s successful expansion and operational efficiency in this sector.

407 ETR Performance

The 407 ETR asset was a standout performer, with traffic growth of 9.4% in Q3 leading to an 18.6% increase in revenue and a 20.1% surge in EBITDA. The company expects total dividends for the year to rise by 36% from 2024, reflecting the asset’s strong financial contribution.

Construction Division Profitability

Ferrovial’s construction division maintained solid profitability, with an adjusted EBIT margin of 3.7% for the first nine months and a 4.2% margin in Q3. This indicates effective cost management and project execution within the division.

Net Cash Position

The company reported a net cash position of EUR 706 million at the end of Q3, highlighting strong cash generation and disciplined investment strategies. This financial stability provides a solid foundation for future growth initiatives.

Order Book Growth

Ferrovial’s construction order book grew to EUR 17.2 billion, marking a 9.1% increase like-for-like compared to December 2024. This growth underscores the company’s ability to secure new projects and expand its market presence.

Traffic Decline in NTE

Traffic in the NTE corridor declined by 3.7% in Q3 and 4.4% in the first nine months, primarily due to capacity improvement construction works. This temporary setback is expected to resolve as projects are completed.

Dalaman Airport Traffic Decline

Traffic at Dalaman Airport declined by 1.5% in the first nine months, affected by geopolitical situations in the Middle East. This highlights the external challenges impacting Ferrovial’s airport operations.

Challenges in Operational Costs

The company faced increased costs related to bidding and IT systems in the construction division, which could potentially impact future margins. Addressing these cost challenges will be crucial for maintaining profitability.

Forward-Looking Guidance

Ferrovial provided a comprehensive overview of its financial performance, emphasizing strong metrics across various divisions. The company highlighted significant cash inflows from dividends and asset sales, along with robust growth in its U.S. highways segment. The 407 ETR asset’s traffic increase and revenue growth further underscore Ferrovial’s strategic focus on North American assets, indicating continued financial resilience.

In summary, Ferrovial SA’s earnings call reflected a positive sentiment with strong growth in key areas like highways and the 407 ETR, despite facing some operational challenges. The company’s strategic focus on North American assets and disciplined financial management positions it well for future growth. Investors and stakeholders can remain optimistic about Ferrovial’s ability to navigate challenges and capitalize on opportunities in the coming quarters.