Revenue: EUR9.5 billion, a 6.7% year-over-year increase on a like-for-like basis. Adjusted EBITDA: EUR1.3 billion, a 38.9% year-over-year increase on a like-for-like basis. Adjusted EBIT Margin: 3.9%, surpassing the target of 3.5%. Ex-Infrastructure Net Debt: Minus EUR1.8 billion. Dividends from Projects: EUR947 million, including first distributions from I-66 and I-77. Divestments: EUR2.6 billion, including the sale of a 19.75% stake in Heathrow Airport for EUR2 billion. Investments: EUR1.6 billion, including a 24% stake in IRB Infrastructure Trust for EUR710 million. Total Shareholder Return: 25.7% in 2024. Toll Roads Revenue Growth: 19.6% like-for-like increase. Construction Revenue: EUR7,234 million, a 3.8% increase on a like-for-like basis. Construction Order Book: EUR16.8 billion, with almost 50% from North America. Operating Cash Flow: EUR291 million. Shareholder Distributions: EUR831 million, including EUR271 million from the 2023 program.

Warning! GuruFocus has detected 6 Warning Signs with FER.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Ferrovial SE (NASDAQ:FER) delivered solid growth across all business divisions in 2024, with significant revenue increases in toll roads and construction. The company achieved a record high construction order book of EUR16.8 billion, with almost 50% coming from North America. Ferrovial SE (NASDAQ:FER) successfully divested a 19.75% stake in Heathrow Airport for EUR2 billion, aligning with its strategy of rotating mature assets. The company commenced trading on the Nasdaq, marking a crucial step in its increased focus on North America. Ferrovial SE (NASDAQ:FER) reported a strong ex-infrastructure net debt position of minus EUR1.8 billion, reflecting robust financial health.

Negative Points

Traffic on the NTE toll road decreased by 2.2% due to capacity improvement construction works. The I-77 toll road's revenue per transaction was impacted by a temporary subsidy of toll rates following Hurricane Helene. The company faces potential risks from tariffs under the US administration, which could impact economic growth in Canada and the US. Ferrovial SE (NASDAQ:FER) has a cautious approach to shareholder remuneration, with only a 2% year-on-year growth in ordinary shareholder remuneration for 2025. The construction division's growth is heavily reliant on the US market, particularly Texas, which may pose a risk if market conditions change.

Q & A Highlights

Q: What is the current status of Ferrovial's investments in US infrastructure projects, particularly in airport terminals? A: Ignacio Madridejos, CEO, stated that while the primary focus remains on North American toll roads, Ferrovial is exploring opportunities in airports and other infrastructure. However, there are no specific opportunities to announce at this time. The company is also looking at solar projects in Texas and digital infrastructure, though these are less mature opportunities.

Story Continues

Q: Could the announced additional buyback program be extended to next year if the investment pipeline allows? A: Ernesto Mozo, CFO, confirmed that the buyback program could be extended based on investment opportunities. The company aims to avoid sitting on cash and will consider additional remuneration or investment based on attractive opportunities.

Q: Does the guidance for higher earnings in 2025 for the 407 ETR include Schedule 22 payments? A: Ignacio Madridejos, CEO, explained that while the management of 407 ETR is optimistic about new tariffs and promotions, Ferrovial does not provide specific guidance on Schedule 22 payments. The impact of tariff increases on traffic is still being assessed.

Q: What is driving Ferrovial's conservative approach to the balance sheet, and are there specific opportunities influencing this strategy? A: Ignacio Madridejos, CEO, mentioned that the focus is on North American toll roads, airports, energy, and data centers. The company is maintaining flexibility to capitalize on these opportunities, which influences their approach to share buybacks and dividends.

Q: Can you provide an update on the progress and expected opening date for the New Terminal One (NTO) at JFK Airport? A: Ignacio Madridejos, CEO, stated that contracts have been signed with 10 airlines, and the opening is scheduled for June 2026. The project is on schedule, but the final year involves complex system integrations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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