Release Date: November 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sacyr SA (FRA:VHM, Financial) reported a 65% growth in operating cash flow, reaching EUR805 million, driven by new concession projects.
- The company's EBITDA to cash conversion ratio improved significantly, reaching 85%, indicating strong financial robustness.
- Sacyr SA has a substantial concession backlog, which increased by 66% to EUR6.73 billion, supporting future growth.
- The company was awarded four new concessions in 2024, contributing to a record high backlog of EUR10 billion.
- Sacyr SA is making progress with Voreantis, aiming to go public in early 2025, which could attract new investors and enhance growth.
Negative Points
- Net debt increased by EUR191 million, primarily due to project financing, which could impact financial flexibility.
- The construction division saw a slight decline in revenue and EBITDA, reflecting a strategic shift towards concessions.
- There is uncertainty regarding the financial rebalancing of the Pedemontana project, which could affect future cash flows.
- Traffic volumes in Latin America have decreased, although the company claims this will not impact revenue due to contract structures.
- The company's share price does not reflect its true value, prompting considerations for a share buyback program.
Q & A Highlights
Q: Could you provide details on the potential share buyback program and its scope?
A: The buyback program will be similar to past initiatives in terms of type and amount and is expected to occur in the short term.
Q: How do you foresee the working capital evolving in Q4 and into 2025?
A: Q4 is typically the best performing quarter due to the seasonal nature of our business. We anticipate a significant improvement in working capital by December, positively impacting our accounts.
Q: Can you elaborate on the EBITDA performance and expectations for the coming quarters, especially regarding the concessions business?
A: EBITDA for concessions will decrease as projects are commissioned, with 80% of our concessions already operational. This results in lower EBITDA but higher cash flows, which is a key aspect of our business model.
Q: What is the current status and scope of Voreantis, especially concerning assets in Spain, Italy, Chile, and Colombia?
A: The scope of Voreantis is still being defined, and while we are considering including assets from these countries, the exact details are still a work in progress.
Q: How is the construction business performing, and what are the expectations for margins and revenue stability?
A: The construction business has shown improvement, with margins expected to reach nearly 5%. We aim for EUR2.2 billion in activity and a 5% margin, focusing on reducing risk and reinforcing our concession focus.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
