EUR 100.00 For Business Accounts Only

SACYR: 9M’20 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'20 vs. 3Q'19 Results:
Sales: € 1.124 Bn (+9.9% vs. 0.0% BS(e));
EBITDA: € 179.0 M (+1.1% vs. +0.9% BS(e));
Net Profit: € -23.0 M (€ 42.0 M in 9M'19 vs. € 29.88 M BS(e));
9M'20 vs. 9M'19 Results:
Sales: € 3.203 Bn (+5.6% vs. +2.3% BS(e));
EBITDA: € 527.0 M (+7.1% vs. +7.0% BS(e));
Net Profit: € 47.0 M (-61.5% vs. -18.1% BS(e));
The results are solid, and in line with our estimates. In 9M’20 we have seen a slowdown in EBITDA growth (from high levels) due to asset sales (Guadalmina Motorway in Spain and other concession assets in Portugal) that distort the comparison with the same period last year. Thus, revenues and consolidated EBITDA grew +6% and +7%, respectively in 9M’20 (+10% and +1% in Q3), but if we adjust growth for the aforementioned asset sales, revenues and EBITDA would have grown +10% and +15%, respectively, in 9M’20.
Breakdown by divisions: Concessions (49% of 9M’20 EBITDA) grew +12% in EBITDA. The increase is explained by a reporting change, as this division now also includes the water concessions that were previously in Valoriza. Adjusted for this effect, EBITDA would grow by +6%. The sale of Guadalmina toll road also has a negative impact on the quarter. Engineering & Infras (39% EBITDA, now including the EPC business) grew by +11% with an improvement of margin of +0.2pp, while Valoriza (12% EBITDA) dropped -23% due to a consolidation scope effect and the reporting change in the water concessions mentioned. Adjusted for this effect, Valoriza’s EBITDA would have remained stable. 78% of EBITDA is generated by concession assets (those included in the concessions division and in Services and Infras), mostly without risk of demand.
The EBITDA margin as of 9M’20 increased by +30bps thanks to the better performances of both the Concessions division and Engineering & Infras. Net Profit was impacted by Repsol’s stake (adjusted book value of € 6.72/sh.; with no impact on cash levels) and provisions (€ 85 M in Panama), which we play down.
We do not expect this set of results to have a significant impact, although we believe they are solid and reflect that the company remains on the path to growth, driven by the Concessions business. BUY. T.P. € 2.03/sh. (upside +33.55%).