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February 28, 2019
In 2018, Madrid, Spain-based FCC Group obtained a net attributable profit totaling €251.6 million, which is a 113.2 percent increase compared to the €118 million obtained in 2017. The company reports this was due to the good performance of operating activities, the reduction in financial expenses and the larger contribution from investee and associated companies.
FCC Group revenues in 2018 rose by 3.2 percent compared to last year and amounted to €5,989.8 million. This improvement is largely due to the development of the environmental (3.2 percent) and water (8.7 percent) areas, accompanied by more demand in the cement (9.5 percent) area. There was a slight contraction in the construction area, particularly internationally, due to the impact of the depreciation of certain currencies against the euro. Accordingly, adjusted by the effect of the exchange rate in the group's various international business areas, consolidated revenue in constant currency increased by 4.4 percent during the period.
Here are some key highlights from the group’s earnings in 2018:
Gross operating profits (EBITDA) obtained by the Citizens Services company amounted to €861.2 million at the end of 2018. This represents 5.6 percent growth over the preceding year due to the increase in the revenue from the group's business areas, the operational actions taken to increase efficiency, new synergies and the diverse measures addressing increases in productivity.
The performance of the environmental area in terms of the EBITDA growth in the business areas is notable due to its large contribution to the group, and it reflected 3.7 percent growth to €441.4 million. The cement area is also notable with a 22.7 percent increase to €70.9 million, supported by the improvement of the business in Spain. The water area recognized €247.5 million, 2.5 percent more than last year, and construction attained €65 million, 7.6 percent less than last year due to the evolution of the work in progress.
Debt is another notable aspect of 2018. The group reduced its net consolidated financial debt during the year by 24.8 percent compared to December 2017, primarily as a result of the September 2018 sale of a minority interest in the lead company in the water area for €1,024 million.
2018 milestones include:
FCC Medio Ambiente makes advances in the launch of several waste treatment and reduction plants. Last December, the subsidiary of FCC Medio Ambiente in the United Kingdom commenced the testing of the thermal plant in Edinburgh and Midlothian, Scotland. Involving an investment exceeding £140 million and a 25-year operating concession, the plant will treat more than 150,000 tonnes per year of waste and will produce electricity to supply more than 32,000 homes. It is expected to enter into full operation over the course of 2019.
During the fourth quarter of 2018, a consortium led by FCC Medio Ambiente successfully bid for the second phase of the Environmental Complex in Guipúzcoa. This 20-year contract covers the construction, launch and operation of a facility with a cost exceeding €32 million and an estimated revenue portfolio of €92 million. The facility is expected to begin operating during the second half of this year.
FCC Construcción ends 2018 with a 5 percent year-on-year increase in its project portfolio. The volume of the group's construction contracts throughout 2018 exceeded €2,000 million, which allowed the portfolio to grow by 5 percent to €4,516.4 million at December 2018. This is the first year in which an increase has been seen since 2014, and it was particularly supported by the contracts awarded for unique buildings and industrial construction projects.
In November, FCC Environmental Services (environmental services subsidiary in the United States) obtained three new contracts in Texas (Garland and Lewisville) that bring it to a total of 10 in the state and its portfolio to more than $550 million in the U.S. at the end of the year.
The sale of a 49 percent minority stake in the parent company of the water area, FCC Aqualia, to fund manager IFM for €1,024 million was completed in September. The disposal proceeds were mostly used to pay down financial debt at the group parent by more than €800 million and, coupled with the new funding raised, repay FCC, S.A.'s previous syndicated loan. The remaining resources from the sale are earmarked for differing corporate purposes.
Over the past four years, FCC Medio Ambiente has led a consortium that has developed a platform for versatile and efficient environmental service vehicles that combine 100 percent electric operation with an auxiliary natural gas system. This bus provides a solution that can be adapted to several types of needs, with more than 50 percent energy savings compared to conventional vehicles and the elimination of their polluting emissions.
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