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SACYR: 1Q’20 RESULTS AND CHANGE OF T.P. TO UNDER REVISION (ANÁLISIS BANCO SABADELL)

1Q'20 vs. 1Q'19 Results
Sales: € 985.39 M (+1.4% vs. +1.2% BS(e));
EBITDA: € 165.66 M (+15.8% vs. +3.8% BS(e));
Net Profit: € 32.17 M (-15.3% vs. +28.2% BS(e));

The results came in as expected in revenues, above in EBITDA and below in Net Profit. In general terms, we believe that these results, which were difficult to estimate due to the impact from Covid-19, the changes made in the scope of consolidation (with the sale of the Guadalmina motorway, 9 energetic plants, and several water concessions in Portugal), and the provisioning moves in Repsol, are not surprising and do not change our view on the stock.
In 1Q’20, growth in revenues and EBITDA slowed (from very high rates), but, in any case, this growth was much higher than that seen last year. By divisions, Concessions (47% of EBITDA) grew +8%, Engineering & Infrastructure (38% of EBITDA; now including the EPC business) grew +35%, and Valoriza (15% of EBITDA) grew +5%. 77% of EBITDA comes from concessional assets (in both the Concessions division and the Services & Infrastructure division), where we see a limited risk (no risk of claims).
The EBITDA margin has risen +210bps with substantial improvement in the Engineering & Infrastructure division (+3pp, thanks to the accounting of the concession part of the Pedemontana-Veneto motorway, which has higher margins). Net Profit is affected by the stake in Repsol (adjusting BV to € 9.66/sh.) and by a € 30 M provision made out of caution in view of the current situation.
We place our T.P. Under Revision (previously € 3.55/sh.) due to the fact that we will have to adjust to the new price scenario in Repsol and the current economic situation. We maintain our BUY recommendation.