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Sacyr has posted strong earnings for H1 2023, with steady revenue and a 28% increase in EBITDA. This success stems from the company’s focus on the highly-profitable concession segment. Additionally, Sacyr’s strategy to eliminate its recourse net debt by 2023 is making headway. The recent decision to sell the bulk of its Services business is expected to bring in around €500 million in cash, helping to reduce the existing €627 million in recourse net debt.
Companies: Sacyr (SCYR:BME)Sacyr SA (SCYR:MCE)
AlphaValue
Sacyr has released FY22 earnings ahead of market expectations. Revenue increased by 25% due to the company’s ability to deliver new concession assets and its focus on low risk assets, and EBITDA increased by 63% to €1.5 billion. However, net debt was up by 21% while recourse net debt fell to €546 million, allowing the company to target a total reduction of recourse net debt to €0 by 2023.
Sacyr reported another set of good results with revenue up by 20% and EBITDA over-proportionally up by 32%. The company made a final exit from Repsol (+58m cash inflow) and is continuously improving its asset portfolio (targeting 1/3rd of the assets in North America and Australia).
Companies: Sacyr SA (SCYR:MCE)Sacyr SA (0OFU:LON)
Sacyr reported a good set of Q1 results, with revenue up by 13% and EBITDA over-proportionally up by 25%. The net result was down by 21% to €20m because Sacyr’s participation in Repsol is just in equity, and is no longer included in the P&L. The company is seeing cost inflation pressure in some of its projects but it continues to negotiateg with governments to get compensation for the additional costs.
Sacyr reported another set of good results with revenue up by 4% and EBITDA over-proportionally up by 16% due to the commissioning of some concession assets. It was able to reduce its recourse debt by €108m and has re-iterated its target to reduce debt by ~€300m by the end of this year, which will partially be achieved through the closing of its forward derivatives on Repsol in H2 21, amounting to 75.4m (5%) Repsol shares.
Sacyr reported a good set of Q1 results, with revenue up by 7% and EBITDA over-proportionally up by 17%. The company will continue to manage actively its exposure to Repsol via derivatives and has yet again stressed its willingness to reduce recourse debt. Pedamontana, Sacyr’s largest project, is expected to be completed by the end of this year and commissioned from next year.
Another good year for Sacyr. It managed to deliver growth despite the pandemic and demonstrated a successful hedging of its position in Repsol, resulting in positive net income despite a negative contribution from Repsol. However, its strong P&L was overshadowed by a weak balance sheet, with a 21% increase in net debt. Sacyr delivered on its Strategic Plan 2015-20 and has introduced a plan for 2021-25 with hard numbers, which shows management’s confidence in achieving the goals.
Sacyr published a good set of 9m results with revenues up by 5.6% and EBITDA by 7.2%. However, net profit was down due to the €85m in provisions for the Panama decision. It expects about half of the related cash out in FY21 and the rest over the next 3-4 years. Nevertheless, Sacyr and GUPC will continue pursuing their claims against ACP and Panama Estate in various international instances (ICC, UNCITRAL).
Companies: Sacyr SA
Unlike other concessionaires, Sacyr has posted a good set of results with revenues up by 3.5% and EBITDA up by 10% despite being affected by COVID-19. It has also reiterated that its position is well hedged in Repsol and Repsol’s plummeting share prices will have no impact on Sacyr’s cash flow. The only red flag we would like to raise is its increasing gearing ratio even if management is reducing the recourse debt.
Sacyr reported a good set of Q1 results, with the net income secured against Repsol’s contribution but squeezed by negative FX and provisions. While it was expected that the Services division would perform well, Concessions also managed to perform well due to the non-dependence on traffic. We will update our model but will stick to our Buy recommendation.
Another good year for Sacyr. It has managed to show double-digit top-line growth and significant bottom-line growth (ex Repsol). Its EBITDA exposure to Concession assets has increased to 80% and the EBITDA margin has improved by 200bp. The company’s backlog is at the same level as last year and management is positive about double-digit growth in 2020 as well. We will incorporate the Repsol impact and upgrade our outlook for 2020 based on 2019’s results.
The Chilean concessions asset have been partly sold with very good timing but also resulting in a new layer of complexity added to an already complex company. Following these results, we expect to increase our EBITDA, decrease our net profit and increase net debt and capex. Overall, we expect a positive impact on our target price in the vicinity of 5-10%.
Some investors may ask why there was little stock market reaction when the numbers were so good. The reason is pretty clear: the 10%+ increase in net debt compared to end of December 2018. Following this earnings release, we expect to increase our target price by some 5% and to maintain our Buy recommendation.
The concession division was at the heart of this CMD. Note that, in our NAV, excluding the Repsol stake, which is hedged by a complex collar, the concession division represents some 65% of our gross assets. Key takeaways are: Starting in 2021, Sacyr Concesiones’ equity investments are expected to be fully funded with the portfolio’s annual cash flows. Current portfolio valuation of concession assets is €1.8bn and should reach its maximum value of €2.7bn in 12 years.
The company registered an over-proportional increase in EBITDA compared to net debt growth, which is a positive and the key fact underlying our investment thesis. Following the good earnings release, we will review our model. In an initial assessment, we expect to keep our Buy recommendation with a higher target price.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Sacyr SA. We currently have 5 research reports from 2 professional analysts.
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