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SACYR: 9M’19 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'19 vs. 3Q'18 Results
Sales: € 1.023 Bn (+13.8% vs. +13.3% BS(e));
EBITDA: € 177.0 M (+31.2% vs. +19.2% BS(e));
Net Profit: € 42.0 M (+15.3% vs. +19.7% BS(e));
9M'19 vs. 9M'18 Results
Sales: € 3.032 Bn (+12.2% vs. +12.0% BS(e));
EBITDA: € 492.0 M (+31.6% vs. +27.3% BS(e));
Net Profit: € 122.0 M (+12.2% vs. +13.6% BS(e));
The company has released positive and better than expected 3Q results, with EBITDA growing by +32% on the quarter on a standalone basis (+19% BS(e)) due to a positive business performance in general and incorporation into the scope of consolidation of new assets from the Concessions division (46% of EBITDA; +20% growth) and especially Engineering & Ifras (33% of EBITDA; +76% growth). Valoriza (17% of EBITDA) grew by +24%. As expected, Industrial (4% of EBITDA) is the only division whose contribution to EBITDA decreased as of 9M’19 (-25%, due to the funding of large projects in the Crude Oil and Gas division’s portfolio).
The EBITDA margin on the consolidated level improved by +240bps to 16.2%. We highlight the growth of +340bps registered in the Engineering & Ifras division, with a significant contribution from Superstrada Pedemontana Veneto (which has been transferred to this division for legal/accounting reasons during the construction phase).
Net Profit came in below our estimates due to the fluctuation of the value of financial instruments (Repsol’s derivative) and higher taxes. Although the share price has risen by +57% thus far in 2019, we believe there is still upside potential, and thus, we reiterate our BUY recommendation. BUY. Target Price: € 3.55/sh (upside 35.91%)